Edition 55: 9 November 2017
Editorial Team:
Orçun Çetinkaya, LL.M., Ezgi Baklacı, LL.M., and Pelin Oğuzer, LL.M.
Turkey Adopts Mandatory Mediation for Employment Disputes

Turkey recently adopted a long-awaited mandatory mediation mechanism for certain employment disputes. From 1 January 2018, parties must have attempted mediation before they will be able to pursue an employment dispute via the Turkish court system. The mandatory mediation mechanism is unique to the Turkish legal system.

The Labour Courts Law (“Law”) was published in Official Gazette number 30221 on 25 October 2017.

From the beginning of 2018, the following employment disputes will be subject to mandatory mediation:

– Employer or employee indemnity claims arising from labour contracts.

– Reemployment.

However, the mechanism will not apply to material and immaterial compensation claims or relevant declaratory and recourse actions which arise from occupational accidents and diseases.

Timelines 

Under the Law, either party can apply to a mediator and making a mediation application will suspend any statute of limitations or lapse of time until the mediator’s final minutes are prepared.

If the parties cannot agree on an acceptable mediator, the mediation bureau will appoint one from the mediator list.

The mediator must complete the mediation proceedings within three weeks, with the possibility of a one-week extension. The mediator’s final minutes must be drafted within four weeks of the first application.

Mediator minutes 

Mediators must immediately send their final minutes to the mediation bureau, stating the mediation’s outcome as either:

– Failed to reach to the parties.

– No meeting occurred since the parties were not present.

– The parties did or did not make an agreement.

The mediator’s final minutes are significant during any subsequent lawsuit because the court will apply legal expenses to the party which failed to attend the initial mediation meeting, irrespective of whether that party justifies its claim in the court. The court also cannot rule the legal counsel’s fee in favour of this party.

If both parties failed to attend the initial meeting, legal expenses will be applied according to their own expenses.

If parties submit a petition to initiate an employment lawsuit without including mediator minutes, the petition will be automatically dismissed on procedural grounds. The parties receive two weeks from this time to apply to a mediator.

Mediator fees 

If parties reach an agreement during mediation, the parties will equally share the mediator’s fee.

The Ministry of Justice will pay the mediator’s fee if:

– The mediator fails to reach the parties.

– No meeting occurred due to the absence of both parties.

– The parties state that mediation will not provide any agreement within two hours of meetings.

Please see this link for full text of the Law (only available in Turkish).

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Turkey Announces Rules and Processes for Deleting, Destroying and Anonymizing Personal Data

The Turkish Data Protection Authority has announced rules for deleting, destroying and anonymizing personal data, which will apply from 1 January 2018. These include details of obligations, procedures and time periods which will apply to data controllers (more).

The Regulation on Deletion, Destruction and Anonymization of Personal Data (“Regulation”) was published in Official Gazette number 30224 on 28 October 2017.

Data controllers which are subject to registry obligations must prepare a Personal Data Retention and Destruction Policy, which satisfies the minimum content and thresholds outlined in the Regulation.

The Regulation introduces definitions for “deletion”, “destruction” and “anonymization” within the concept of personal data legislation.

Data controllers must delete, destroy or anonymize personal data if the reasons for processing personal data cease to exist. Data controllers are entitled to choose whether to delete, destroy or anonymize personal data (unless the Data Protection Board decides otherwise).

Data controllers which are subject to registry obligations must introduce a data destruction scheme, where the frequency of destruction cycles is no longer than six months. If the reasons for processing personal data cease to exist, the data must be deleted in the next destruction cycle.

Other data controllers (which are not subject to the registration requirement) must delete, destroy or anonymize the personal data within three months from the date the processing reasons cease to exist.

Data controllers must respond to data subject requests about deleting, destroying or anonymizing personal data within 30 days.

Please see this link for the full text of the Regulation (only in Turkish)

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Turkey Updates Consumer Rights in the Electronic Communication Sector

Turkey’s Information and Communication Technologies Authority has updated consumer rights in the electronic communication sector. Changes apply to execution of subscription agreements, invoicing periods, service disconnection-reconnection operations, as well as timeline targets for subscriber transfers.

The Regulation Regarding Consumer Rights in the Electronic Communication Sector (“Regulation”) was published in Official Gazette number 30224 on 28 October 2017.

From 28 October 2017 onward, operators are permitted to execute subscription agreements in electronic environments.

Changes under the Regulation which will apply from 28 April 2018 include:

– Operators will be permitted to execute subscription agreements via physical signatures as well as secure e-signature.

– Operator will be prohibited from charging subscribers for any un-requested and/or un-confirmed service.

– If a service fee amount which occurred during an invoicing period is less than a certain threshold, it will be permitted to be invoiced in the next invoicing period, unless this restricts the benefits of the consumer.

– If services are suspended/limited due to non-payment of invoices, operators will be permitted to charge an additional fee for service disconnection-reconnection operations for the first disconnection-reconnection operation in each calendar year.

– 90% of subscriber transfer requests in a calendar year will be required to have been completed within seven days. The other 10% must be completed within ten days.

Please see this link for full text of the Regulation (only available in Turkish).

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Turkey Announces Central Budget Guidelines and Priorities for 2018-2020

Turkey’s Ministry of Development has published details, guidelines and policies for the central government’s budget allocation during 2018-2020. Among other things, these identify budget and investment priorities for the period, as well as preferred financing mechanisms.

The Ministry of Development published the following documents in the Official Gazette number 30201 on 5 October 2017:

– Circular on the Preparation of Investment Program for the Period 2018-2020

– Budget Call for the Period 2018-2020

– Budget Preparation Guide for the Period 2018-2020

– High Planning Council Decision numbered 2017/32, dated 21 September 2017

Notable points for budget expenditures and revenues during 2018-2020 include:

– The Public-Private Partnership (PPP) model will be used in financing public investments, in addition to budget resources.

– Priority will be given mainly to investments in:

– Split roads.

– Port railway investments.

– Agricultural production.

– Mining and raw material exploration.

– E-government infrastructure.

– Research and development to increase technological capacity and capability

– Disaster preparedness

– Education-health, aimed at improving human capital.

– Technical studies will be carried out to reduce the average completion period of public investments.

– Investments which will save money in current expenditures will be given priority.

– To increase productivity of agricultural subsidies, basin-based production and income-oriented policies will be followed, considering climate, soil structure, vegetation pattern and existing water assets.

– To encourage investments, Treasury real estate will be sold under favourable conditions.

– Public immovables will continue to be used to encourage investments, particularly agriculture, animal husbandry, forestry, energy, tourism, urban transformation and renewal of housing stock.

– Public revenue policy will be carried out in a way that will:

– Increase international competitiveness.

– Promote employment and investments.

– Expand the tax base.

– Minimise the informal economy.

– Contribute to Turkey becoming a regional and global financial centre.

– Domestic savings will be encouraged.

– Work will continue on tax policies to:

– Save energy consumption.

– Fight climate change and environmental pollution.

– Work will continue to combat informality, in order to prevent unfair competition and increase public revenues. In particular:

– Expand the tax base.

– Increase cooperation and data sharing between institutions.

– Ensure all sectors fight against informality.

– Work will continue to ensure transition to the formal economy, including:

– Preparing the Action Plan Against Informality.

– Increasing voluntary compliance.

– Eliminating legislative gaps.

– Strengthening audit capacity.

– Increasing awareness.

– Developing capacity for sharing and analysis.

Please see the full text of the relevant documents (only available in Turkish):

Circular on the Preparation of Investment Program for the Period 2018-2020.

Budget Call for the Period 2018-2020 and Budget Preparation Guide for the Period 2018-2020.

High Planning Council Decision numbered 2017/32, dated 21 September 2017.

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Turkish Constitutional Court: Confiscating LPG’s Replacement Value Breaches Constitutional Property Rights

The Turkish Constitutional Court recently considered the legal basis for confiscating LPG from a gas station. It held that since the act in question was not a crime, confiscation under the Turkish Penal Code is not possible. Therefore, the Constitutional Court held that confiscating the LPG’s “replacement value” had violated the applicant’s constitutional property rights (Article 35).

In the case at hand, the Energy Market Regulatory Authority discovered LPG at a gas station which breached technical regulations. A First Instance Court subsequently ruled to confiscate the “replacement value” of the incompatible LPG.

The Constitutional Court decided that this decision is unconstitutional on the basis that the relevant legislation only permits confiscation of the incompatible LPG itself, rather than replacement value (Article 17, Law on LPG Markets numbered 5307).

The Constitutional Court ruled that the lower court misjudged the case by basing its decision on a Turkish Penal Code provision that allows confiscation of crime-related property. The Constitutional Court held that since the matter in dispute was not a crime, neither the LPG nor its replacement value can be confiscated pursuant to Turkish Penal Code.

Please see this link for the full text of the Constitutional Court’s decision dated 20 September 2017, numbered 2014/13677, published in Official Gazette number 30221 on 25 October 2017 (only available in Turkish).

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Turkish Constitutional Court: Suspending Statute of Limitations during Tax Valuation Commission Deliberations is Constitutional

The Turkish Constitutional Court recently held that suspending the statute of limitations while the Tax Valuation Commission deliberates is constitutional, provided certainty and proportionality principles are respected. The Court ruled that this did not impose an excessive and unbearable burden on taxpayers and maintained a fair balance between public interests and protecting individual property rights.

In 2009, the Constitutional Court set aside Article 114(2) of the Tax Procedural Law. It held that the unlimited duration of suspensions for the statute of limitations during Valuation Commission deliberations caused uncertainty.

In July 2010, legislators subsequently introduced a one year cap for such suspensions in terms of calculating the statute of limitations. A transitional mechanism applied a time bar for tax periods before 1 January 2005, where taxes were submitted to the Valuation Commission before 8 July 2010 but not assessed and notified by 31 December 2012.

In the case at hand, the Constitutional Court considered circumstances where the statute of limitations had been suspended for 1 year, 2 months and 28 days, while the Tax Valuation Commission considered taxable basis.

The Constitutional Court rejected the applicant’s claim that the transitional mechanism’s retroactive effect leads to uncertainty in taxation and violates his individual property rights.

The Court ruled that suspending the statute of limitations while the Valuation Commission deliberates does not violate the Constitution, provided that legality (certainty) and proportionality principles are respected. The court held that the transitional mechanism complies with these principles.

Please see this link for the full text of the Constitutional Court decision dated 20 October 2017 and numbered 2014/109 which was published in the Official Gazette number 30221 on 25 October 2017 (only available in Turkish).

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