1. Legal Background

Article 29 of the Turkish Labour Law numbered 4857 which came into effect on 10 June 2003 ("TLL") sets forth the legal provisions regarding collective redundancy. The provisions regarding collective redundancies set forth in the TLL has been adopted within the framework of Article 13 and 14 of the Convention No. 158 concerning Termination of Employment at the initiative of Employer ("Convention No. 158"), which Turkey is a party to. Moreover, the TLL has legal provisions regarding collective redundancy which are similar to the provisions of 1975 European Union Directive 75/129/EEC on the approximation of the laws of Member States relating to collective redundancies, amended by Directive 92/56/EEC of 1992 ("EU Directive"). However, there are also major discrepancies between the two legislation which has been referred to herein below.

2. Scope of Collective Redundancy under Turkish Law

2.1. Thresholds for the Number of Redundant Workers

Article 29 of the TLL adopts the thresholds stated below for the number of employees to be dismissed for collective redundancies which are similar with the thresholds set forth in Article 1.a. (i) of the EU legislation. Accordingly, under the TLL, dismissals of:

  • at least 10 workers in establishments normally employing more than 20 and less than 101 workers,
  • at least 10 % of the number of workers in establishments normally employing at least 101 but less than 301 workers,
  • at least 30 in establishments normally employing 301 workers or more, either on the same or different dates, over a period of 30 days, in accordance with the notice periods set out in Article 17 of the TLL, are considered collective redundancy.

2.2. Valid Reasons for the Collective Redundancy

Collective redundancy can take place as a result of economical, technological, structural and similar requirements of the workplace or work which are specifically set out under Article 29 as legal ground of collective redundancy.

2.3. Obligatory Notifications and Consultations

Should an employer contemplate collective redundancy; he should notify the situation in writing to the (i) representative of the labour union, (ii) relevant district directorate and (iii) Employment Institution of Turkey at least 30 days in advance. However, if a workplace is closed and business activities are definitely and permanently terminated, the employer is required to notify the situation only to the relevant district directorate and the Employment Institution of Turkey.

In the abovementioned notifications, it is obligatory to inform (i) the reason/s of collective redundancy, (ii) the number of redundant workers and the categories of workers and (iii) the time period in which collective redundancy shall take place.

Following the notifications, consultations should be carried out between the employer and the labour union representative in order to discuss the options for preventing collective redundancy, reducing the number of workers to be dismissed or minimizing the adverse effects of collective redundancy on workers. At the end of the consultations, a document shall be drawn up in order to show that consultations have been carried out. However, it is not requirement that a conclusion or a joint resolution is adopted at the end of such consultations.

Notice of termination shall be effective one month after the employer notifies the collective redundancy to the regional directorate. Accordingly, notice periods determined in the TLL which vary depending on the years of service of workers, shall commence one month after the employer makes abovementioned notifications. Alternatively, employers are entitled to make advance payment to the workers in lieu of notice periods in order to immediately terminate employment agreements at the end of one month period starting from the notifications.

3. Consequences of the Incompliance with the Termination Procedure

According to Article 100 of the TLL employers or employers' representatives are subject to an administrative fine of TRY 450.- (four hundred and fifty Turkish Liras) for each worker whose employment agreement is terminated in contradiction with the termination procedure laid down in the TLL for collective redundancies. Administrative fine is not the only consequence of such incompliance. In addition to the imposed administrative fine, termination of employment agreements shall be invalid if the employers do not fulfil their obligations regarding the termination procedure. In such case employees are entitled to file a law suit against the employer within the prescription period for reinstatement of employment based on the invalidity of the termination of employment.

4. Obligation of the Reinstatement of Employment Relation

If the employers are contemplating in recruiting workers within six months after the collective redundancy becomes definite and if the tasks requiring qualifications which are the same as the qualifications of workers dismissed through the collective redundancy, then they should initially invite the dismissed workers having appropriate qualifications to take up employment again.

5. Discrepancies between the TLL and the EU Directive

According to Article 1 of the EU Directive, dismissals of at least 20 workers over a period of 90 days, regardless of the number of workers normally employed in the establishments in question are considered to be subject to collective redundancy, whereas there is not such a threshold laid down in the TLL.

As for the obligatory consultations, the EU Directive requires employers to begin consultations with the workers' representatives in good time with a view to reaching an agreement whereas the TLL requires employers to begin consultation only with labour union's representatives. There is not workers' representatives' body adopted in the TLL for the obligatory consultations regarding the collective redundancies. Therefore, under Turkish Law, consultations cannot be carried out if there is no labour union authorized to execute collective bargaining agreement at the workplace in question.

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.