Determining the law applicable to disputes arising out of employment relationships performed abroad has frequently been the subject of higher court decisions in recent years1. In this context, the country in which the employee actually performs the work, whether the parties have made a choice of law, and whether the employment contract is more closely connected with another country have been central to the assessments made by the higher courts. The decision of the General Assembly of Civil Chambers of the Turkish Court of Cassation (“General Assembly”) dated 11 February 2026, (Case Number:2025/3, Decision Number 2026/58) concerns a dispute in which these factors were considered together and in particular, sheds light on the concept of the law more closely connected with the employment contract
In the dispute underlying the decision, the employee spent the entire term of his employment contract in the Russian Federation. Nevertheless, taking into account the parties’ places of residence, the social security system to which the employee was subject, the place of payment of the employee’s salary and other facts connecting the employment relationship with Türkiye, the General Assembly concluded that Turkish law should apply. Accordingly, the conclusion reached in the decision was based on the specific facts established in the case file concerning the employment relationship with Türkiye 2.
Background of the Dispute
The claimant employee alleged that he had worked in the defendant company’s overseas projects between 2002 and 2013 as a telephone and switchboard operator and administrative secretary that his employment contract had been terminated without just cause, and that he had not been compensated for overtime work. On this basis, he claimed compensation and other employment-related receivables. The defendant employer, on the other hand, argued that foreign law should apply on the ground that the employment had been performed abroad3.
The Court of First Instance partially upheld the claim. On appeal, the 51st Civil Chamber of the Istanbul Regional Appellate Court noted that the case file contained no employment contract providing for the application of Russian law. Taking into account that both the employee and the employer were Turkish, that the parties’ places of residence and the employer’s administrative headquarters were located in Türkiye and that the employee was subject to the Turkish social security system, the Regional Appellate Court concluded that Turkish law should apply4.
However, the 9th Civil Chamber of the Court of Cassation quashed the decision. It held that the employee had actually performed his work in the Russian Federation between 22 March 2002 and 29 April 2013 and that Russia was therefore the employee’s habitual place of work. In the absence of a choice of law for the relevant employment period, the 9th Civil Chamber concluded that Russian law should apply as the law of the habitual place of work and that the employee’s claims for compensation and other employment-related receivables should be assessed after the content of Russian law had been established.
Regional Appellate Court maintained its previous decision, taking the view that Turkish law was more closely connected with the employment contract. The matter was subsequently referred to the General Assembly5.
Law of the Habitual Place of Work and the More Closely Connected Law
Under Article 27/1 of Law No. 5718 on Private International Law and International Civil Procedure (“PILA”), the parties to an employment contract containing a foreign element may choose the law applicable to their contract. However, the minimum protection that the employee would enjoy under the mandatory provisions of the law of the habitual place of work remains preserved. Where the parties have not made a choice of law, Article 27/2 provides, as a general rule, that the law of the place where the employee habitually performs the work shall apply. The habitual place of work is the place where the employee actually and predominantly performs the work. As the employee had performed the entirety of his work in Russia in the dispute under review, Russia was considered to be his habitual place of work.
However, as also noted by the General Assembly, the determination of the habitual place of work does not, in itself, conclude the applicable-law analysis in every case. Former Article 27/4 of PILA, which was applicable to the dispute, provided that where, having regard to all the circumstances of the case, another law was more closely connected with the employment contract, that law could be applied instead of the law of the habitual place of work6. Accordingly, in disputes of this nature, all facts relevant to determining whether the employment relationship is more closely connected with another country must be examined.
In the present case, the General Assembly did not limit its assessment solely to the parties’ nationality. In addition to the fact that both the employee and the employer were Turkish nationals, it took into account that the parties’ places of residence, the place where their social and legal relationships were concentrated, the social security system to which the employee was subject and the place of payment of the employee’s salary were all in Türkiye. The General Assembly further noted that the employee’s salary had been paid into a bank account in Türkiye and that there was no agreement or other evidence between the parties determining the applicable law. Taking all these facts into account, the General Assembly concluded that, although the work had been performed in Russia, Turkish law was more closely connected with the employment contract 7.
The Constitutional Court Decision and The Amendment of 4 June 2025
In its reasoning, the General Assembly also referred to the Constitutional Court’s decision dated 5 November 2024 (Case Number: 2023/158, Decision Number: 2024/187), as well as the subsequent amendment to Article 27 of PILA.
The Constitutional Court annulled Article 27/1 of PILA on the ground that, under the version of Article 27 in force prior to 4 June 2025, where the parties had made a choice of law, there was no possibility of applying the law more closely connected with the employment contract. The Constitutional Court found this restriction incompatible with Article 49 of the Constitution, which regulates the right to work and the State’s obligation to protect employees8.
Following the annulment decision, the first and fourth paragraphs of Article 27 were amended by Law No. 7550 dated 4 June 2025. Under the amended Article 27/4, the law more closely connected with the employment contract may also be applied where the parties have made a choice of law.
However, the General Assembly stated that, since the employment relationship pre-dated the legislative amendment, the dispute had to be resolved under the version of Article 27 of PILA in force prior to the amendment. As the parties had made no choice of law in the present case, the former provision already permitted the application of the law more closely connected with the employment contract. The General Assembly therefore concluded that Turkish law should apply without relying on the 2025 amendment.
Relationship With Previous Case Law
The exception concerning the law more closely connected with the employment contract was not addressed by the General Assembly for the first time in this decision. In its previous decisions, the General Assembly had also examined whether an employment contract was more closely connected with the law of another country and whether that connection required the application of that law instead of the law of the employee’s habitual place of work.
For example, in its decision dated 11 December 2024 (Case Number: 2024/3, Decision Number: 2024/650), the General Assembly considered an employment period in Kazakhstan in which the parties had made no choice of law. It found that the employee had actually performed his work in Kazakhstan and that his salary had been paid in USD. The decision contained no finding that the salary had been paid into a bank account in Türkiye.
The General Assembly held that the fact that both the employee and the employer were Turkish was not, in itself, sufficient to conclude that Turkish law was more closely connected with the employment contract. Accordingly, it concluded that Kazakh law, as the law of the employee’s habitual place of work, should apply to the relevant employment period9.
By contrast, in its decision dated 11 February 2026, the General Assembly did not consider the parties’ Turkish nationality to be the only connecting factor with Türkiye. It also took into account the parties’ places of residence, the social security system to which the employee was subject and the place where the employee’s salary was paid. On this basis, it concluded that Turkish law should apply.
Accordingly, the different conclusions reached in these two decisions demonstrate the significance of the specific connecting factors established in each case when determining whether an employment contract is more closely connected with a law other than the law of the habitual place of work.
Conclusion and Assessment
In its decision dated 11 February 2026, the General Assembly unanimously upheld the decision of the Istanbul Regional Appellate Court to maintain its previous ruling as regards the application of Turkish law. However, it did not make a final determination on the amount of the employee’s claims or on the defendant’s other grounds of appeal. These issues were referred to the 9th Civil Chamber of the Court of Cassation for further examination.
The General Assembly concluded that Turkish law was more closely connected with the employment contract by assessing together the facts connecting the employment contract with Türkiye in the specific circumstances of the case. However, this conclusion should not be generalised to mean that Turkish law applies to every employment contract where the habitual place of work is abroad and both parties are Turkish nationals, or that the parties’ Turkish nationality is, in itself, sufficient to make Turkish law the law more closely connected with the employment contract. Under the General Assembly’s approach, the law applicable to each dispute must be determined in light of the circumstances of the particular case, taking into account any choice of law and the facts connecting the employment contract with other countries.
Footnotes
1. See, for example, the decisions of the General Assembly of Civil Chambers dated 11.12.2024, Case No. 2024/3, Decision No. 2024/650; Case No. 2024/4, Decision No. 2024/652; Case No. 2024/5, Decision No. 2024/653; Case No. 2024/32, Decision No. 2024/654; Case No. 2024/498, Decision No. 2024/656; Case No. 2024/133, Decision No. 2024/655; dated 24.05.2023, Case No. 2023/196, Decision No. 2023/520; Case No. 2023/198, Decision No. 2023/526; Case No. 2023/308, Decision No. 2023/521; and dated 10.05.2023, Case No. 2022/872, Decision No. 2023/432; Case No. 2022/873, Decision No. 2023/424; and Case No. 2022/892, Decision No. 2023/425.
2. Turkish Court of Cassation, General Assembly of Civil Chambers, Case No:.2025/3, Decision No:.2026/58, Date: 11.02.2026 pp. 11–13 / paras. 31–36.
3. Turkish Court of Cassation, General Assembly of Civil Chambers, Case No:2025/3, Decision No:.2026/58, Date: 11.02.2026, p. 1 / sections titled “Claim” and “Defence”.
4. Turkish Court of Cassation, General Assembly of Civil Chambers, Case No:2025/3, Decision No:.2026/58, Date: 11.02.2026 p. 2 / section titled “Appeal – Reasoning and Conclusion”.
5. Turkish Court of Cassation, 9th Civil Chamber, Case No: 2023/19384, Decision No: 2024/2163, Date:14.02.2024 for the grounds for quashing and the proceedings following the Regional Appellate court’s decision to maintain its previous ruling, see Turkish Court of Cassation, General Assembly of Civil Chambers, Case No: 2025/3, Decision No: 2026/58, Date: 11.02.2026, pp. 2–6.
6. Article 27/2 of Law No. 5718 on Private International Law and International Civil Procedure (“PILA”) and Article 27/4 as in force prior to its amendment by Law No. 7550
7. Turkish Court of Cassation, General Assembly of Civil Chambers, Case No: 2025/3, Decision No: 2026/58, Date: 11.02.2026, pp. 12–13 / paras. 32–35.
8. Turkish Constitutional Court, Case No: 2023/158, Decision No: 2024/187, Date: 05.11.2024 pp. 5–6 / paras. 27–35.
9. Turkish Court of Cassation, General Assembly of Civil Chambers, Case No: 2024/3, Decision No:2024/650, Date: 11.12.2024, pp. 15–16 / paras. 49–51
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