ARTICLE
25 October 2024

Employment Contracts Of Turkish Workers Employed Abroad And Applicable Law

KC
Kilinc Law & Consulting

Contributor

Kilinç Law & Consulting established by Levent Lezgin Kilinç currently operates in Istanbul, Izmir and London. Our firm, provides services to clients in a wide range of complex matters including Project Finance, Corporate Law, M&A, Energy Law, Dispute Resolution, Maritime Law, IP Law, International Transactions as well as Litigation of the disputes.
In a world that is globalizing day by day, the trend of working abroad continues to increase. As a result, disputes arise in terms of the rights of workers working abroad and the law to be applied for the protection.
Turkey Employment and HR

INTRODUCTION

In a world that is globalizing day by day, the trend of working abroad continues to increase. As a result, disputes arise in terms of the rights of workers working abroad and the law to be applied for the protection of these rights. The rights of workers employed abroad should be examined in terms of Law No. 5718 the Law on Private International Law and Procedural Law ("PILPL") and Labor Law No. 4857 ("Labor Law").

A. APPLICABLE LAW FOR EMPLOYMENT CONTRACTS

Article 27 of the PILPL entitled "Employment Contracts": "Employment contracts shall be governed by the law chosen by the parties, without prejudice to the minimum protection that the employee shall have under the mandatory provisions of the law of his habitual place of work. (2) If the parties have not chosen the law, the employment contract shall be governed by the law of the habitual place of work of the employee. If the worker temporarily performs his/her work in another country, this workplace shall not be deemed to be the habitual place of work. (3) If the worker does not habitually perform his/her work in a particular country but continuously performs his/her work in more than one country, the employment contract shall be governed by the law of the country in which the employer has its principal place of business. (4) However, if, according to all the circumstances of the case, there is a law more closely related to the employment contract, this law may be applied to the contract instead of the provisions of the second and third paragraphs". In other words, the PILPL allows the employee and the employer to choose the applicable law. However, it is not possible to choose a national law that contradicts the mandatory provisions of the law of the habitual place of work.

In determining the applicable law for employment contracts, we must first explain the concept of "habitual workplace". In its decision dated 18.05.2021 and numbered 2021/5056 E. and 2021/9195 K., the 9th Civil Chamber of the Court of Cassation defined the concept of habitual workplace as follows: "A habitual workplace is the workplace where the work is predominantly performed in terms of time and content. In other words, the habitual workplace is the place where the worker performs his/her work. The manner and currency in which the wages of the worker are paid is not decisive for the determination of the habitual workplace. If the worker temporarily performs his/her work in another country, for example, if he/she is assigned abroad for assembly work, this workplace will not be considered as the usual workplace. The duration of the temporary work should be determined by the judge according to the characteristics of each case. If the worker is hired only to work in a foreign country, or if the employer does not intend to take back the worker sent to a foreign country to work, or if the worker does not intend to return, the place where the worker sent to a foreign country actually works becomes the habitual workplace." In summary, the habitual workplace is the place where the performance of work is predominantly performed.

The first limitation imposed on the right to choose the law granted to the contracting parties by Article 27/1 of the PILPL is the minimum protection norms based on the law of the country where the habitual place of work is located. With this provision, the legislator has carried the principle of "protection of the worker", which is dominant in labor law, to the binding rules and prevented the elimination of the minimum rights provided by the law of the country where the worker works, by choosing the law of another country. Therefore, it is necessary to accurately determine which country the worker's habitual place of work belongs to and what the minimum protection norms of that country cover. For example, this regulation prevents the determination of the applicable law as country y, which has less worker-protective regulations, simply because the minimum rights of a worker whose habitual place of work is x are less guaranteed.

Pursuant to Articles 2/1 and 27/2 of the PILPL, in disputes arising out of employment contracts that have a foreign element and where there is no choice of law, as explained above, the habitual place of work must be determined and the law of the country where this workplace is located must be applied. Since the law of the habitual place of work is considered to be the law of the country where the worker actually and predominantly works, the judge may prefer Turkish law in the application of this law only in the presence of a clear violation of public order or directly applicable rules pursuant to Articles 5 and 6 of the PILPL. In order to make a public order intervention, the law of the habitual place of business must first be determined, the relevant rule must be applied to the dispute and the result must clearly violate the Turkish public order. If there is a directly applicable rule, this rule shall be applied to the dispute without the need to determine the competent foreign law. However, for this to happen, the rule in question must be a "directly applicable rule" in Turkish law. In both cases, the fact that the parties are Turkish or the mandatory nature of the labor law alone does not constitute a sufficient justification. In this regard, the decision of the Grand General Assembly of the Court of Cassation Unification of Jurisprudence dated 10.02.2012 and numbered 2010/1 E. and 2012/1 K. states that:

"According to Article 5 of the Law on Private International Law and Procedural Law, if the provision of the competent foreign law applicable to a particular case is clearly contrary to Turkish public order, this provision shall not be applied; Turkish law shall be applied in cases deemed necessary. Public order intervention is limited and exceptional. The circumstances requiring a breach of Turkish public order will mostly be considered in the case of a clear violation of a mandatory provision. However, it is not possible to say that every violation of a mandatory provision or every foreign decision that violates a mandatory provision is contrary to the Turkish public order. For example, although the provisions regarding notice pay, severance pay, annual leave, overtime, week and general holiday receivables are mandatory in terms of our domestic law, the different regulations of foreign law regarding them will not cause public order intervention pursuant to Article 5 of the Law on Private International Law and Procedural Law without evaluating the situation arising in the concrete dispute solely due to their differences. Likewise, the fact that the foreign law to be applied provides less protection to the worker than Turkish law is not a sufficient reason for public order intervention by itself. The understanding of public order in conflict of laws law is different and narrower than the understanding of public order in domestic law. A rule of foreign law may be contrary to our public order if it is contrary to the fundamental values of Turkish law, Turkish common sense of decency and morality, the basic understanding of justice and legal policy on which Turkish laws are based, the fundamental rights and freedoms enshrined in the Constitution, the common and accepted principles of law valid in the international arena, bilateral agreements, the understanding of morality and justice common to developed societies, the level of civilization, political and economic regime. For example, it is contrary to public order if foreign law permits the employment of minors or racial discrimination in wages and other benefits."

As can be understood from this decision, Turkish law will not be applied only in cases where labor rights provide less protection than Turkish law in terms of the applicable law. Therefore, Turkish law can only be applied in the presence of matters that are indisputably contrary to public order.

Pursuant to paragraph 4 of Article 27 of the PILPL, when the parties do not make a choice of law in the employment contract, the judge is authorized to apply the more closely related law instead of the law of the habitual place of business. This discretion is both for the determination of the more closely related law and for the application of that law. In other words, the judge may either determine the more closely related law or choose to apply the law of the habitual establishment despite the existence of such law. The critical point here is the correct determination of the more closely related law. Pursuant to paragraph 4 of Article 27 of the PILPL, the judge must determine this law by evaluating all the facts and circumstances.

The reason why the legislator gives the judge discretionary power to apply the more closely related law instead of the law of the habitual place of work is to ensure the application of this law in case there is a legal order that protects the interests of the employee more. However, in determining the applicable law, it should be noted that this law should be more closely related to the employment contract in dispute than the law of the habitual place of work. For example, factors such as the social environment of the employee being in Turkey, being included in the social security system of Turkey, the wages being paid in Turkey and in Turkish Lira, the employer being Turkish, the employment contract being drafted on the basis of Turkish law, referring to a previous employment contract subject to Turkish law or the employment contract being written in Turkish may be considered as factors indicating that the employment contract is in a close relationship with Turkish law.

As a result, even if the applicable law for the employment contracts of the workers working abroad has been agreed by the parties, Turkish law will be applied in the event that there are matters that actually contradict the public order in terms of Turkish law. However, if the provisions of the law of the country agreed by the parties do not contradict the public order and at the same time meet the minimum norms of the habitual workplace, the law of the agreed country may be applied. In contracts where the applicable law is not chosen by the parties, the judge has the discretion to apply the more closely related law. Depending on the characteristics of the concrete case, the judge may apply the more closely related law or apply the law of the habitual place of business.

B. APPLICABLE LAW FOR EMPLOYEE CLAIMS

In terms of the labor receivables of Turkish workers working abroad, if the applicable law is Turkish law, severance pay, notice pay and other employee claims shall be determined in accordance with the principles set forth in the Labor Law. If the applicable law is the law of a foreign country, the principles of the law of the foreign country will be applied. In this case, if the lawsuit is filed in the Turkish courts, the judge may appoint an expert witness regarding the law to be applied in terms of employee claims. Because the 9th Civil Chamber of the Court of Cassation, in its decision dated 18.05.2021 and numbered 2021/5056 E. and 2021/9195 K.:

"It is apparent from the provisions of the foreign employment contract signed between the plaintiff and the defendant employers regarding the rights and obligations of the parties in the employment relationship regarding the termination, working time, overtime, week holiday and general holiday wage receivables, it is stated that the legislation of the country of work will be applied, and in Article 16 of the contract, it is stated that the legislation of the country of work is valid in the matters specified in the contract articles, and in this way, the parties have made a choice of law agreement. The plaintiff worked at the workplace of the defendants in Russia within the scope of the employment contract during the working period related to the receivables subject to the claim, and in this case, it is fixed that the habitual workplace is Russia, where the employee actually performs his work.

Considering all these issues, since there is a choice of law agreement between the parties within the scope of Article 27/1 of the Law on Private International Law and Procedural Law , Russian Law should be applied to the dispute. As it is understood from the information and documents in the file, Russian Law is also the law of the habitual place of business. As such, it is necessary to evaluate the dispute subject to the lawsuit by obtaining a report from an expert specialized in Russian Law, if necessary, and to make a decision according to the result by evaluating the evidence in the file together. Without considering these material and legal facts, the written decision was erroneous and required reversal."

in the event that the law of a foreign country is taken as the basis in an employment contract where the applicable law is determined, a report should be obtained from an expert witness specialized in that country. The point to be understood here is that in cases where the applicable law is determined as a foreign country, a judgment should be made in accordance with the provisions of the Labor Law specified in the legislation of the foreign country. However, the public order intervention mentioned under A. is reserved here as well. Finally, it should be noted that if the wage paid to the employee is in a foreign currency, a lawsuit can be filed in foreign currency and the foreign currency amount on the date of actual payment can be requested.

C. THE COMPETENT COURT FOR THE LAWSUITS TO BE BROUGHT BY WORKERS WORKING ABROAD

In determining the competent court, it is necessary to examine the rules of private international law, and in this context, Articles 44 and 40 of the PILPL will be decisive. This is because Article 40 of the PILPL stipulates that "the international jurisdiction of Turkish courts shall be determined by the rules of jurisdiction in terms of venue of domestic law." While Article 44 reads as follows: "In disputes arising out of an individual employment contract or an employment relationship, the court of the place in Turkey where the workplace where the employee performs his/her work on a regular basis is located shall have jurisdiction. In cases brought by the employee against the employer, the Turkish courts where the employer's domicile, the employee's domicile or habitual residence is located shall also have jurisdiction." As can be understood from this article, in disputes arising out of an individual employment contract or employment relationship, if the workplace of the employee is located in Turkey, the court of that place is competent. In addition, in cases brought by the employee against the employer, the Turkish courts where the employer's domicile, the employee's domicile or habitual residence is located are also competent.

As can be understood from these regulations, the courts of the place of residence of the employee and the employer, as well as the courts of the place where the employee resides for the purpose of permanent residence, are also deemed competent. Thus, it is possible to choose between the courts where the employee and the employer are domiciled and the courts where the employee's habitual residence is located.

D. CONCLUSION

The principles regarding the applicable law for Turkish workers working abroad are regulated in the Law on Civil Procedure. In this regard, the Labor Law will also be applicable. In this case, in accordance with the legislation and the jurisprudence of the Court of Cassation, if the applicable law has not been determined by the parties in the employment contract, the habitual place of work and the discretionary power of the judge to determine the close relationship will have to be evaluated separately for each concrete case. In terms of employee claims, an assessment will be made according to the will of the parties and the choice of law they want to be applied, without prejudice to the public order limitation.

REFERENCES

SÜZEK, Sarper (2021)., Labor Law, 21. Edition, Beta Basim, İstanbul.

ŞANLI, Cemal/ESEN, Emre/ATAMAN-FİGANMEŞE, İnci (2013)., Private International Law, Beta Beta Basim, İstanbul.

BAYCIK, Gaye (2023)., "The Difference Between the Decisions of the Court of Appeal and the Court of Cassation Regarding the Foreign Service Contract", Ankara University Journal of Social Sciences 2023, N.14, p.55-69.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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