COVER PAGE

The main rules regulating employment relationships in Turkey are the laws. While the key areas are regulated by law, the executive body carries out practical measures to implement the laws. The executive body exercises this authority through regulations, legislation and Council of Ministers’’ decisions.

While judicial opinions, the constitution, and international agreements are also sources of employment law, employment agreements, internal regulations, and workplace practices can be named as private sources.

This guide covers the basic issues regulating employment relationships, taking Employment Law number 4857 (the “Employment Law”) as the basis.

  1. ESTABLISHING EMPLOYMENT RELATIONS AND EMPLOYMENT AGREEMENTS
  1. Definition of Employment Agreement

Article 8 of the Employment Law defines an employment agreement as an agreement formed between two parties whereby one party (the employee) undertakes to perform work in subordination to the other party (the employer) who undertakes to pay the remuneration.

According to this provision, in order to be valid, the employment agreement should include the following elements:

  • The performance of work
  • The payment
  • The employee’s dependency on the employer

The work to be performed could be any activity of a real person, whether physical, intellectual, technical, artistic, scientific, or otherwise. 

The payment must be made in exchange for such performance / service of the employee. Even though payment is essential, the Court of Appeal states that the amount to be paid does not have to be specified under the employment agreement. In other words, unpaid work will not constitute a valid employment agreement; however, the agreement will still be regarded as valid even if it does not include the amount to be paid. In later cases, the employer is obliged to pay an amount based on that paid to preexisting employees.

As stated above, the employee must depend on the employer. The employee works within the workplace of the employer (or where the employer instructs and/or allows) and under their supervision. The employee is also obliged to comply with the employer’s instructions. These are some of the key elements regarding the dependency of the employee.  It must also be noted that the level of the dependency principle may vary for each agreement and employee and should be evaluated independently.

  1. Entering into the Employment Agreement

Requirements of the Agreements

Principally, in accordance with article 8 of the Employment Law, there is no special requirement for an employment agreement unless otherwise specified. The employee and the employer may agree upon the terms and conditions of the work either verbally or in writing.

However, if the duration of the employment agreement has been determined as one year or longer, the contract will then have to be in written form. Additionally, article 11 of the Employment Law states that all “definite term employment agreements” must be in written form, regardless of their duration.

Furthermore, the Law on Compulsory Use of Turkish Language states that all employment agreements must be made in the Turkish language if they are executed by and between Turkish citizens and companies incorporated under Turkish law. Therefore, written employment agreements should be drafted either solely in Turkish or as dual column. For dual column agreements, the Turkish version will prevail in the event of any inconsistencies with translated versions.

Invalidity of the Contract

Although employment agreements are subject to the freedom of contract principle, there are three main reasons they can be deemed invalid. Article 27 of the Turkish Code of Obligations sets forth these reasons as:

Unlawfulness

If an employment agreement is against the law, the prohibitive provisions of law, public order or personal rights, it will be deemed invalid. To give an example, if an employment agreement is drafted in another language rather than Turkish, parties will then have the right to claim its invalidity.

Immorality

If either the execution, commitment, or purpose of the employment agreement is immoral, it will be deemed invalid.

Impossibility

If the subject of an employment agreement is objectively impossible for everyone at the time, such agreement will be deemed invalid.

There are no clear provisions in the Employment Law regarding whether the agreement will be deemed invalid retrospectively from its beginning or after its invalidity has been claimed. The Court of Appeal has stated that employment agreements will mainly be deemed invalid prospectively. However, it must be emphasized that if the employment agreement constitutes a serious violation of law or morality, or disrupts the public order, then it will be deemed invalid with effect from the start.  Counterfeiting and smuggling are examples of such acts.

On the other hand, if a party deliberately enters into an agreement in bad faith, knowing that the agreement is invalid due to any of the above reasons, such party can no longer claim invalidity.

Trial Period

Parties to the employment agreement may agree upon a trial period in order to evaluate each other. The employer may want to inspect the employee’s manner of work, while the employee may want to evaluate the workplace and conditions. The great majority of employment agreements in Turkey include such provisions even though it is not mandatory to do so.

Trial periods cannot be longer than two months as per article 15 of the Employment Law. However, for collective employment agreements, this period can be extended up to four months. If parties decide upon a longer trial period, such a provision shall be deemed partially invalid and the period will be executed as two months.

Within such a trial period, parties may terminate the agreement without any obligations or granting any notice. However, employers will still be obliged to pay employees’ wages for the days they worked.

Lastly, the calculation of the rights of the employee regarding seniority must include the trial period. For example, the trial period must be taken into account when calculating the employee’s severance payment or annual leave.

 

  1. Types of Individual Agreements

 

There are many types of employment agreements which parties may agree upon freely in accordance with their needs, within the legal boundaries.

 

The main types are:

 

  1. Fixed–Indefinite Term Agreements

A fixed-term agreement is an agreement between an employee and an employer, where the parties mutually agree upon a certain expiration time.

 

To enter into a fixed-term employment agreement, the practical conditions of the work must be suitable as per article 11 of the Employment Law and the agreement must be in written form. Otherwise, the agreement will be considered as an indefinite-term employment agreement,

even if the parties decide upon a certain period of time.

 

Specifically, fixed-term employment agreements can be executed (i) if the work subject to the agreement has a definite term, (ii) if the work requires the completion of a definite task (such as a project), or (iii) if the work is in connection with the launch of a  new project.

 

An indefinite-term employment agreement can be regarded as the most commonly used type. A fixed-term employment agreement is an exception, since the former provides better protection for employees.

 

Furthermore, fixed-term employment agreements cannot be renewed without a valid reason. If the parties renew the agreement without objective reasons justifying the renewal, the agreement will be deemed as an indefinite-term employment agreement from the very beginning. 

 

The employer should comply with the equal treatment principle for employees subjected to different agreements, in line with article 5 and article 12 of the Employment Law. However, the employer has the right to treat employees differently due to valid reasons such as seniority, qualifications or the nature of the work.

 

If employer violates the equal treatment principle without a valid reason, employees can claim compensation for unlawful deprivation of rights and request equality in working conditions with other employees i.e. indefinite term employees.

  1. Part-Time–Full-Time Agreements

It is possible for the parties to enter into an employment agreement for part-time jobs. Article 13 of the Employment Law states that if the employee’s weekly working hours are significantly lower than the exemplary full-time employee, the employment agreement will be regarded as a part-time employment agreement.

 

It has been determined within article 6 of the Working Hours By-Law with Regard to the Law that working up to two-thirds of an exemplary full-time job will be deemed as part-time.

 

Similar to fixed-term employment agreements, the employer is again under the obligation to treat part-time employees and full-time employees equally and cannot treat employees differently without a valid reason. Employees again have the right to claim rights and wages that they were deprived of. Additionally, part-time employment agreements may also be determined for a definite or an indefinite term.

 

 

 

 

  1. Continuous–Discontinuous Agreements

 

As per article 10 of the Employment Law, works completed within 30 days are regarded as discontinuous, while works lasting more than 30 days are defined as continuous.

 

However, the time that the work will take is calculated objectively and based on its nature. Therefore, if a work that can be completed within 10 days takes two months, it would still be regarded as

discontinuous. Similarly, if a work that can only be completed in two months, is completed within 10 days with extra hours and shifts, it would still be deemed continuous.

 

  1. Other Sources of Employment Relations

 

Employment Law sources are categorized as follows:

           

  1. Internal Regulations of the Company

 

These regulations are issued solely by the employer, without consulting or negotiating with the employee. Therefore, for internal regulations to be valid, the employee must clearly be informed about these rules while the agreement is being drafted, and must accept and approve them.

 

Additionally, internal regulations cannot be immoral, or be against good faith or aggravate the position and/or obligations of the employee.

Even if regulations are binding and valid, substantial provisions cannot be altered to the detriment of the employee, without prior written notice.

 

  1. Workplace Practices

 

Certain repeated actions by employers may constitute a workplace practice. To give an example, if the employer provides travel expenses or bonuses or other additional social benefits, even though they are not specified in the employment agreement or internal regulations, these actions will constitute a workplace practice.

 

However, the employer should provide such benefits to all employees, or a part of them, for an action to become a workplace practice. If these benefits are provided to a certain employee, then it cannot be regarded as a workplace practice and the employer would not be obliged to provide these to other employees.

 

Abandoning such a practice may be regarded as a material change. In such a case, workplace practices cannot be discontinued without prior written notice to the employee, and the employee’s written consent must also be obtained.

 

  1. Instructions of the Employer

 

Provided that they are not against the Employment Law or the employment agreement, the employer has the right to give instructions in order to carry out the work and to regulate employees’ behavior.

 

In parallel, the employee is obliged to comply with valid instructions of the employer.

 

  1. REGULATION OF WORKING CONDITIONS

 

  1. Payment

 

Article 32 of the Employment Law states that the employer shall pay employees on a monthly basis, at least. The payment period can be reduced to a week under collective bargaining and employment agreements.

 

In the monthly payment system, employees get paid collectively once a month. The payment amount is calculated by collecting the hours and days in which the employee has worked and/or is considered to have worked.

 

The payment shall only be made in the form of money and cannot be made by a bill to order (bond), coupon, or a bill claiming to represent the currency of the country or by any other instrument.

 

Pursuant to article 32 of the Employment Law, the payment shall be made in the Turkish currency, in principle. If parties agree on payment in a foreign currency, it can be paid in Turkish Lira according to the exchange rate on the date of payment.

 

As per article 401 of the Turkish Code of Obligations, the employer is obliged to pay the employee the amount determined in the agreement. If the agreement does not include such a provision, the employer is obliged to make an equivalent payment that cannot be less than the national minimum wage.

 

  1. National Minimum Wage

 

Under article 39 of the Employment Law, the relevant commission of the Ministry of Labor and Social Security determines and revises the minimum wage twice a year.

 

The national minimum wage applies to all employees except those working in the coal and lignite mining sectors. In these sectors, the minimum wage must be at least twice the regular minimum wage determined by the commission.

 

The gross minimum monthly wage in force until 31 December 2020 is TRY 2,943.

 

  1. Deductions of Fines from Payment

 

As per article 38 of the Employment Law, no employer may impose a fine on an employee’s payment for reasons other than those indicated in the collective agreement or the employment contract. The employee must be notified at once of any payment deductions as fines, as well as the reason for them.

 

Deductions made in this way must not exceed three days’ payment in any one month, or in the case of piece work or the amount of work to be done, the wages earned by the employee in two days.

 

These deductions shall be credited within one month to the account of the Ministry of Labor and Social Security in a bank established in Turkey and must be designated by the Ministry for use in the training of and social services for employees. Every employer must maintain a separate account in his establishment showing such deductions. It is against the law to deduct money from the fee and deposit it in the employer’s account.

 

In accordance with article 102 of the Employment Law, employers who unlawfully impose a penalty shall be penalized with an administrative fine of TRY 1050.51 for 2020.

 

  1. Social Rights and Side Benefits of Employees

 

Salary, social security contributions, paid annual leave, paid sick leave, general health insurance contribution, weekends, public holidays, official holiday salaries, overtime payments, maternity leave and paternity leave pay are the main mandatory benefits. The employer may also provide employees with some additional voluntary benefits.

 

  1. Informing the Social Security Institution

 

Under the social security laws, each employee is insured from the first day of work. The employer must inform the Social Security Institution about each employee that works in its workplace.

 

  1. Restrictions on Working Hours

 

The working hours include not only the period in which the worker is actively working but also the period from the moment the worker goes under the order and instruction of the employer until the end of the shift.

 

 

The weekly working hours are fixed as 45 hours, and unless otherwise agreed, this period shall be applied equally across the working days of the week. The parties may determine daily working hours for each day, not exceeding the weekly working hours. However, according to the law, the daily working hours cannot exceed 11 hours.

 

  1. Short Work

 

The general rule of working hours in the Employment Law aims to protect the employee’s health and ensure the quality of work. Carrying out overtime work in workplaces where short work is compulsory is forbidden, as is employing these workers in any job after their daily working time.

 

 

  1. Periods Considered as Working Time

 

Article 66 of the Employment Law stipulates that some of the time spent at work will be counted as daily working time.

 

The following periods shall be considered as the employee’s daily working hours:

  • The time required for employees employed in mines, stone quarries or any other underground or underwater work to descend into the pit or workings or to the actual workplace and to return to the surface,
  • Travelling time, if the employee is sent by the employer to a place outside the establishment,
  • The time during which the employee has no work to perform pending the arrival of new work but remains at the employer’s disposal,
  • The time during which the employee who ought to be performing work within the scope of his duties in the establishment is sent on an errand for his/her employer or is employed in the employer’s household or office, instead of performing his/her own duties,
  • The time allowed for a female employee who is a nursing mother to enable her to feed her child,
  • The time necessary for the normal and regular transportation of groups of employees engaged in the construction, maintenance, repair and alteration of railways, roads and bridges to and from a workplace at a distance from their place of residence.
  • Time for transportation to and from the establishment which is not a requirement of the activity but is provided by the employer solely as a form of amenity shall not be regarded as part of the statutory working time.

 

  1. Overtime

 

As per article 41 of the Employment Law, overtime is defined as the time which exceeds 45 hours per week, under the circumstances stipulated under the law.

 

As per article 63 of the Employment Law, weekly working hours can be distributed over the working days in a week by the mutual agreement of the parties, provided that a maximum of 11 hours per working day is not exceeded. In this manner, the weekly average working time of the employee within a period of two months cannot exceed the regular weekly working time. The reference period can be increased up to four months under collective bargaining agreements. Provided that the average working hours of the employee do not exceed regular weekly working hours, even though they may exceed 45 hours during some weeks, it is not considered to be overtime, if the two-month reference applies in accordance with article 63.

 

Extra wages for each overtime hour shall be paid as 50% more than the regular working hour salary.

 

If the weekly working hours are determined to be less than 45 hours in the employment agreement, working hours which exceed the applied average time within the abovementioned conditions, up to 45 hours, are considered to be overtime work. Extra wages for each overtime work hour shall be paid as 25% more than the regular working hour salary.

 

Employees who do overtime are entitled to take free time of 1.5 hours for each hour of overtime, instead of receiving increased wages as explained above. The employees should use this free time during their working hours within a six-month

period and without any deductions from their salary.

 

The written consent of employees must be obtained each January if they are asked to do overtime. In accordance with article 102/c of the Law, employers may be subject to an administrative fine amounting to TRY 417 for each employee where there is no approval for overtime work.

 

It can be agreed under an employment agreement that the wages for overtime of up to 270 hours in one year are included in the employee’s salary. For any hours exceeding this limit, the employer is obliged to make an overtime payment to the employee. If the employer does not pay the employee’s wage for the excess hours, there is the risk that the employee may claim compensation from the employer for exceeding hours within five years starting from the relevant overtime work.

 

Per article 102 of the Employment Law, the employer shall be fined an administrative fine of TRY 511.16 as of 2020 for each employee who has not been paid overtime, who has not been granted the free time he deserved within six months, and who has worked extra hours without his approval.

 

  1. Compulsory Overtime Work

 

In cases where time worked has been considerably lower than the normal working time or where operations are stopped entirely for reasons of suspending work due to force majeure or on days before

or after national and public holidays or where the employee is granted time off upon his request, the employer may call upon compensatory work within two months in order to compensate for the time lost due to unworked periods. Such work shall not be considered overtime work or work at extra hours.

 

Compensatory work shall not exceed three hours daily and must not exceed the maximum daily working time in any case. Compensatory work shall not be carried out on holidays.

 

  1. Night Shift

 

Night work, as stated in article 69 of the Law, starts at 20.00 at the latest and lasts until 06.00 at the earliest and for a maximum of 11 hours. Women cannot be employed for more than 7.5 hours on night shifts, but over 7.5 hours of night work may be carried out provided that the written consent of the worker is obtained in work performed in tourism, private security, and health services. Female employees under the age of 18 cannot be employed in night shifts in industrial works.

 

 

An employer who employs workers in contravention of their working time and who makes the employee work more than seven and a half hours at night shall be charged an administrative fine of TRY 2,810.76 for 2020.

 

  1. Resting Periods

 

  1. Rest Breaks

    While the duration varies depending on the worked hours, each employee is entitled to a rest break. According to article 68 of the Law, the length of the rest breaks is calculated in accordance with the length of work. The resting break periods are as follows:

     

    • Up to four hours: 15 minutes
    • Up to and including 7.5 hours: 30 minutes
    • More than 7.5 hours: one hour

     

    According to article 104 of the Law, an employer who does not apply the interim rest in accordance with the provisions of the Law shall be penalized with an administrative fine of TRY 2,810.76 for 2020.

     

    1. Weekend Break

     

    Having worked for 45 hours per week, each employee becomes entitled to a continuous 24-hour weekend break. Employers are not allowed to make a deduction from employees’ salaries for this weekend break. For this day off, employees are paid a wage equal to the daily wage by the employer.

     

    1. National Holidays

     

     

    National holidays in Turkey are:

     

     

    • New Year’s Day (1 January).
    • National Sovereignty and Children’s Day (23 April).
    • Labor Day (1 May).
    • Youth and Sports Day (19 May).
    • Victory Day (30 August).
    • Republic Day (afternoon of 28 October and 29 October).
      • Feast of Ramadan (3.5 days) and
      • Feast of Sacrifice (4.5 days).

       

      The minimum paid annual leave entitlements do not include national holidays.

       

       

      In principle, employees do not have to work on national holidays and they receive full wages on such holidays. However, if employees do work on national holidays, they will be entitled to receive additional payments for each day.

       

      Whether employees will work on public holidays or not is determined by the employment contract. Unless there is a clause in the contract, the employee’s consent is required for working on public holidays.

       

      1. Annual Paid Leave

       

      According to Article 53 of the Law, after working for at least one year, employees become entitled to paid annual leave. Depending on the length of employment, the length of the paid annual leave varies. The Law states the minimum holiday entitlement for employees as follows:

       

      • One to five years of employment (including the fifth year): 14 days per year.
      • More than five years to 15 years of employment: 20 days per year.
      • More than 15 years of employment: 26 days per year.

       

      Employees under the age of 18 or above the age of 50 are entitled to

      These holiday entitlements can be extended through employment contracts or collective bargaining agreements.

       

      To be granted paid annual leave, the required working period of one year includes the probationary period.

       

      1. Other Types of Leave

       

      In accordance with the Employment Law, other types of leave are:

       

      • Marriage Leave: 3 days, in the event of an employee’s marriage,

       

      • Bereavement Leave: 3 days, in the event of the death of an employee’s mother, father, spouse, brother or sister, or child,

       

      • Adoption Leave: 3 days, in the event of an employee’s adoption of a child,

       

       

      • Paternity Leave: 5 days, in the event of an employee’s spouse giving birth,

       

      • Disabled Child Leave: up to 10 days in a year to escort the treatment of a child where employed parents have a child with at least 70% disability or chronic disease approved by a medical report. However, only one of the parents can take this leave, and there can be no interruption to the leave nor can it be used in segments.

       

      Payments for the above-mentioned types of leave are made by the employer.

      In case of injury or illness, employees become entitled to time off for sick leave. By documenting their illnesses or injuries with a medical report, employees will be entitled to time off during the period of rest recommended in the report. However, if the employee’s illness or injury exceeds the valid notice period mentioned in the report by six weeks, the employer has the right to terminate the employment agreement with immediate effect by paying the employee’s severance payment on the grounds that the employee’s sickness cannot be cured.

       

      1. Occupational Health and Safety

       

      The health and safety obligations of employers are regulated under the Occupational Health and Safety Law. The Occupational Health and Safety Law requires occupational health and safety services to be provided by appropriately qualified individuals.

       

      Pursuant to the Occupational Health and Safety Law, some of the general responsibilities of employers are:

       

      • Working to avoid occupational hazards,

       

      • Informing and training employees about the risks and occupational health and safety issues which exist in their workplace in particular,

       

      • Providing employees with the necessary tools and equipment,

       

      • Adopting health and safety measures to meet changing workplace conditions,
        • Monitoring whether employees abide by occupational health and safety measures,

         

        • Ensuring the suitability of an employee in terms of health and safety before assigning them to a particular task or duty,

         

        • Employing an on-site doctor and occupational safety specialist at the workplace under the Occupational Health and Safety Law (applicable for entities having fewer than 50 employees as of 1 July 2020).

         

        In addition to the general requirements above, some further measures may be required from employers depending on the hazard class of the workplace.

         

        1. Obligation to Employ Disabled Persons and Ex-Convicts

         

        As per Article 30 of the Law, in establishments employing 50 or more employees, employers are obliged to employ disabled personnel at a ratio of 3% of the total personnel and ex-convicts at a ratio of 2%. 

         

        As per Article 101 of the Law, employers who fail to fulfill this obligation shall pay to the Turkish Labor Institution a monthly penalty of TRY 3.250 for each unemployed disabled employee.

         

         

        1. Other Special Conditions

         

        1. Maternity Rights

         

        Maternity rights are determined under article 74 of the Law. According to this article, pregnant employees can take fully paid leave for:

        • Eight weeks before confinement
        • Eight weeks after confinement

         

        Pregnant employees and their spouses will be entitled to nursing benefits under certain premium conditions.

         

        1. MATERIAL CHANGES TO THE EMPLOYMENT CONDITIONS

         

        1. Types of Material Changes

         

        There are many types of changes to be made. It must be separately determined whether each change constitutes a material change, depending on the situation. However, some of the main types of material changes are as follows:

         

         

        • Payment
        • Nature of the Work
        • Workplace
        • Working Hours

         

        1. Procedure to Apply Material Changes

         

        As briefly mentioned above, article 22 of the Law states that working conditions arising out of the employment agreement, internal regulations or workplace practices may be changed only if the employees are notified in writing prior to the change.

         

        Furthermore, employees of the company should be notified in writing and asked to respond within six business days as to whether or not they object to the changes. If they do not respond, employees will be deemed not to have accepted such alterations.

        The Court of Appeal[1] has also stated that, while employees can give their written consent to the employer, the parties may also prepare and sign a new employment agreement. Such a new agreement will also be regarded as the written consent of the employee.

         

        1. If the Employee Objects to Material Changes

         

        Changes which are not accepted by the employees in written form within 6 business days following the written notification of the employer shall not bind the employee. Therefore, the employee cannot be forced to act in accordance with the changes that have been made.

         

        For example, if the employer decides to decrease the salaries to the detriment of employees and the employees do not give their written consent to this change, the employer cannot pay decreased/changed salaries to employees.

         

        It must also be stated that, if the changes are made to the detriment of employees without their written consent, employees will have the right to immediately terminate the employment agreement and claim severance payment.

         

        However; if an employee does accept the material change, the employer will have the right to terminate the employment agreement at the end of the statutory notice period by making severance payments and paying other receivables to the employee.

        [1] 9th Chamber of the Court of Appeal, file numbered 2017/12121 E., 2019/11461 K. and dated 20.05.2019

        The Court of Appeal[1] has stated that if an employee does accept the material change, this does not provide any grounds for an immediate rightful termination by the employer. As stated above, the employee must wait until the end of the notice period and must make a severance payment.

         

        Furthermore, any provision within the employment agreement which allows the employer to solely apply material changes shall be deemed to be invalid.

         

        1. CHANGES TO EMPLOYER AND WORKPLACE

         

        Changes to the employer under Turkish law may occur either (i) in the manner of an automatic transfer or (ii) by individual transfer of each employment agreement

         

         

        1. Automatic Transfer of Employment

         

         

        There are two possibilities which would allow the automatic transfer of the employment contracts under Turkish law:

         

        1. Workplace Transfer

         

        Workplace transfer is deemed to take place when a workplace (such as a factory) is transferred to another person or entity with all rights and obligations (including the employees). In accordance with Article 6 of the Law, if the transaction involving the transfer of a business constitutes the “transfer of the workplace” of the employer wholly or partially to a third party, all employment agreements effective with respect to that workplace at the transfer date shall be deemed to be transferred to the

        [1] 22nd Chamber of the Court of Appeal, file numbered 2017/22056 E., 2019/10532 K. and dated 14.05.2019

        transferee with all rights and obligations without the consent of the employees.

         

        The former employer remains jointly liable with the new employer for two years from the transfer event to the transferred employee for obligations which were materialized before the transfer and which are due and repayable on the date of the transfer. In practice, the existence of a workplace transfer which enables automatic transfer of employees is not usually easily determinable and employers prefer to obtain employee approval in a workplace transfer.

         

        1. Merger and Demerger

         

        Merger and demerger under Turkish Commercial Code is another method of automatic transfer of employment agreements, if the employee does not object to the transfer of the employment contract.

         

        Article 178 of the Turkish Commercial Code regulates certain rights of employees to be transferred during a merger or full or partial demerger.

         

         

        All rights and liabilities arising from employment agreements shall be deemed to be transferred as per Article 178 of the Turkish Commercial Code. However, if an employee objects to the transfer of the employment agreement within the scope of a merger or demerger, then the employment agreement shall be deemed to be terminated at the end of the “statutory notice period”.

         

        Article 178/3 of the Turkish Commercial Code states that the former employer and the new employer shall be jointly and

        severally liable for the receivables of employees that have become due before the merger has taken place and those which will become due until the date the employment agreement expires under ordinary circumstances or when it is terminated due to the employee’s objection.

         

        In a nutshell, as per Article 178 of the Turkish Commercial Code:

         

        • Employees will not have the right to object to the transaction, but they may object to the transfer of their individual employment agreement,
        • The employee’s objection will also terminate the employment agreement at the end of the statutory notice period,
        • The former employer and the new employer will be jointly and severally liable for the receivables of employees.

         

        It must also be mentioned that in practice most employers in Turkey prefer to obtain consent of employees before the completion of the transaction, to have a better understanding of employment-related obligations. 

         

        1. Individual Transfer of Employment

         

        Transfer of an employment relationship to another employer as a whole is a concept very commonly applied by group companies when restructuring the group. Although the concept is commonly applied, the legal basis for the transfer of an employment agreement is relatively new. The rules pertaining to transfer of employment agreements are stipulated under the Turkish Code of Obligations.  In line with Article 429 of Turkish Code of Obligations:

         

        the transfer of an employment agreement to another employer

        • requires the written consent of the employee;
        • the transferee becomes the new employer under the existing employment agreement together with all rights and obligations;

         

        • the starting date of the employee with the former employer is taken into account when calculating the rights of the employee based on the term of employment.

         

        Please note that change of the employer as a result of the transfer is considered as a “substantial change in the employment relationship” under the Employment Law. Accordingly, substantial changes that are not accepted by the employee in written form within six working days following the written notification of the employer regarding such a change shall not bind the employee. Therefore, clear consent of the employee in written form shall be obtained in an employee transfer.

         

        Given this position, the common method applied in the market is to execute a full tripartite agreement, between the employee, new employer and former employer, which includes the written consent of the employee to the change of their employer. With such an agreement, all rights and obligations of the employee under the employment agreement are transferred to the new employer and the new employer is responsible for all employment-related rights as of the date of the transfer. A transfer made with this agreement shall not lead to the termination of the employment agreement; the employment agreement and all rights and obligations continue without interruption.

         

        Separately, even where the transfer is made intra-group, the financial burden of the transfer of the employees shall be adequately transferred between group

        companies, to avoid complications in the process. Within this scope, the exact number of days worked by each employee, unused vacation times, overtime amounts (if any) and all other employment-related information must be gathered by the parties prior to the transaction.

         

         

        1. Requirements as to Change of Workplace

         

        Unless there is a change in employer, any change in the place of employment which is made to an address within 30 km radius in the same city can be realized by the employer without the consent of the employee, in line with the court precedent regarding change of workplace. However, any relocations beyond this distance and to any other city will require the written consent of the employee. It is possible to obtain this consent in advance in the employment agreement, which would allow the employer to proceed with the relocations without any further consent needed.

         

         

        1. TERMINATION OF EMPLOYMENT AGREEMENT

         

        1. Types of Termination

         

        1. Termination by Notice

         

        According to Article 17 of the Employment Law, both the employer and the employee can terminate an employment agreement which has been signed for an indefinite period through giving notice. The terminating party must comply with the termination procedure explained in Article 17 of the Employment Law.

         

        Firstly, the terminating party must send the termination to the other party. The notice must be definite and clear. It must

        be understood from the notice of termination that the employment relationship will expire. In addition, a conditional notice of termination is deemed to be invalid by the Court of Cassation.

         

        The employer can terminate the contract without any reason if the employee is not subject to any employment security protection. Otherwise, the cause of termination must be stated.

         

        When terminating the contract by notice, the employer and the employee shall comply with the statutory termination periods in Article 17 of the Employment Law. The statutory notice periods[1] are as follows:

         

        • With regard to an employee whose employment period is less than 6 months – 2 weeks
        • With regard to an employee whose employment period is between 6 months and 1.5 years – 4 weeks
        • With regard to an employee whose employment period is between 1.5 and 3 years – 6 weeks
        • With regard to an employee whose employment period is more than 3 years – 8 weeks.

         

        The termination notice period starts from the moment that the declaration of will regarding the termination reaches the other party. The employment period starts from the first day of the work and ends when the declaration of will regarding the termination reaches the other party.

         

        Pursuant to Article 17/3 of the Employment Law, these periods are in most cases compulsory. Therefore, the

        [1] These periods might be set longer in individual employment agreements or collective labor agreements.

        parties cannot decrease or fully cancel these periods, but they can enter into a written contract to extend these periods. However, the employer can terminate the contract without complying with the notice periods specified in Article 17 by paying the wages corresponding to the notice period.

         

        During the period of notice, the parties will still be under the obligation to fulfill their obligations to each other. If one of the parties fails to fulfill its obligations and if the conditions are met, the other party can terminate the contract on grounds of just cause.

         

         

        During the period of notice, the employer has to give the employee at least two hours per day to allow the employee to seek new employment. The employer still has to pay the wages for these hours whilst the employee seeks a new employment instead of working. The employee can take these hours together, but they must do so on the days immediately preceding the day on which the employment ceases and must inform the employer in advance. If the employee uses more time than the hours allowed, the employer can terminate the contract on the grounds of just cause, pursuant to Article 25/II of the Employment Law due to the absence of the employee. If the employer forces the employee to work during the time to be allowed for seeking new employment, pursuant to Article 27/3 of the Employment Law, the employer must pay twice the amount of wages the employee is entitled to for this period, in addition to the amount the employee will receive corresponding to the permission period in which the employee does not work. Finally, if this right is not granted to the employee, the employee can

        immediately terminate the employment agreement on grounds of just cause.

         

        If one of the parties fails to comply with the termination periods, the employment agreement will still be deemed to be terminated. However, in such a situation, the other party will have the right to claim notice pay. It is important to underline that not only the employee, but also the employer, can request notice payment. Additionally, even if the employee does not have any loss, he/she can claim the notice payment and severance payment.

         

        If the employee finds a new employment without following the procedure, the new employer will also be responsible to the former employer in the following cases;

         

        • If the new employer has caused the employee to act in this manner,

         

        • If the new employer has employed the employee while being aware of the employee’s actions, or

         

        • If the new employer has continued to employ the employee after becoming aware of the employee’s actions.

         

        1. Termination On Grounds of Just Cause

         

        Articles 24 and 25 of the Employment Law specify the situations which result in the immediate termination of the employment contract by the employee and the employer, on grounds of just cause. These situations are limited in number.

      • The Employee’s Right of Termination on Grounds of Just Cause:

         

        In accordance with Article 24 of the Employment Law, the employee is entitled to terminate the employment agreement, whether it is an agreement for a definite or an indefinite period, before it expires or without having to comply with the notice periods, in the following cases:

         

        1. Health Reasons

         

        1. If the performance of the work stipulated under the employment contract endangers the employee’s health or life;

         

        1. If the employer or another employee, who is constantly near the employee and with whom he is in direct contact, gets infected with a contagious disease or a disease which is not in connection with the work.

         

        1. Situations against moral and goodwill principles, or other similar behavior

         

        1. If the employer has misled the employee while entering into the employment agreement, by stating incorrect employment conditions or by giving false information or by making false statements concerning any essential point of the contract;

         

        1. If the employer speaks or acts against the honor or reputation of the employee or a member of the employee’s family, or if he/she harasses the employee sexually;

         

        If the employer assaults or threatens the employee or a member of his/her family, or encourages or provokes them to commit an illegal action, or commits an offence against the

        1. employee or a member of his/her family which is punishable with imprisonment, or asserts or accuses the employee in matters affecting his/her honor with serious and groundless accusations;

         

        1. If the employee is sexually harassed by another employee or by third persons in the workplace and the employer does not take adequate measures despite being informed of such conduct;

         

        1. If the employer fails to calculate or pay the wages in accordance with the Employment Law or the terms of the contract;

         

        1. If, in cases where wages have been fixed at a piece or task rate, the employer assigns the employee fewer pieces or a smaller task than was stipulated and fails to compensate this deficit or fails to implement the conditions of employment.

         

         

        1. Force majeure

         

        If the work within the workplace of the employee gets suspended for more than one week due to force majeure

         

        Employer’s Right of Termination on Grounds of Just Cause:

         

        In accordance with Article 25 of the Employment Law, the employer can immediately terminate the employment agreement, whether it is an agreement for a definite or an indefinite period, before it expires or without having to comply with the notice periods, in the following cases:

         

        1. Health Reasons
          1. If the employee gets infected with a disease or becomes disabled due to his/her own deliberate actions, loose living or addiction to alcohol, and as a result does not show up to work for three successive days or for more than five working days in a month.

           

          1. If the Health Committee determines that the employee’s disease is incurable and that it may cause harm if the employee continues working

           

           

          Excluding the reasons stated under subparagraph (a), in cases regarding the employee’s illness, accident, birth and pregnancy, the employer’s right to immediate termination will begin when such circumstances exceed the notice periods set forth in Article 17 by six weeks. In cases of pregnancy, the period mentioned above shall begin at the end of the period stipulated in Article 74. No wages are to be paid for the period during which the employee fails to report to work due to the suspension of his/her contract.

           

          1. Situations against moral and goodwill principles, or other similar behavior

           

          1. If the employee has misled the employer when entering into the employment agreement, by falsely claiming that he/she possesses the qualifications or requirements which constitute an essential feature of the contract, or by giving false information or making false statements;

           

          If the employee speaks or acts against the honour or reputation of the employer or a member of the employer’s family, or asserts or

          1. accuses the employer in matters affecting his/her honor with groundless accusations;

           

          1. If the employee sexually harasses another employee of the employer;

           

          1. If the employee bullies the employer, a member of the employer’s family or a fellow employee, or shows up to work drunk or under the influence of drugs, or abuses such substances at work;

           

          1. If the employee commits a dishonest act against the employer by performing acts such as breach of trust, theft or disclosure of the employer’s professional secrets;

           

          1. If the employee commits an offence on the premises of the undertaking which is punishable with imprisonment for at least seven days and which cannot be postponed;

           

          1. If the employee does not show up to work for two consecutive days, or twice in one month on the working day following a rest day or on three working days in a month, without the employer’s permission or a valid reason;

           

          1. If the employee refuses, after being warned, to perform his/her duties;

           

           

          1. If either willfully or through negligence, the employee endangers the work safety, or damages machinery, equipment or other articles or materials in his/her care, whether these are the employer’s property or not, and if such damage cannot be compensated by 30 days of the employee’s salary.
          1. Force majeure:

           

          If the work within the workplace of the employee is suspended for more than one week due to force majeure

           

          1. If the employee’s absence from work exceeds the notice periods after being taken into custody or arrested.

           

          General Rules Regarding Termination by Just Cause

           

          Employment agreements with definite and indefinite periods will be immediately terminated if the parties terminate such agreements with just cause. Both the employer and the employee can terminate the employment agreement on grounds of just cause. The reasons of just cause are limited and are listed in the Employment Law for both parties.

           

          The party terminating the contract on the grounds of just cause must clearly state the will to terminate. The cause of termination must also be stated clearly, due to the fact that the terminating party will have the burden of proof in the event of a future dispute.

           

          The employer cannot use the right to termination with just cause without a disciplinary board decision, if the workplace has a Disciplinary Board. The members of the Disciplinary Board shall be selected fairly and impartially. In accordance with the Court of Cassation decisions, termination without any Disciplinary Board decision shall not be deemed as termination with just cause; however, such a termination can be deemed as a termination with valid reasons.

           

          The right to terminate the employment agreement with just cause must be used either within six working days of the date of discovery or within one year following

          the incident. These periods are final terms.

           

          • Consequences of Termination by The Employer

           

          The employee will be under the obligation to pay severance pay while terminating the employment agreement with just cause, except for situations which are against moral and goodwill principles. If the employer fails to prove the just cause, the employer will be obliged to pay notice pay in addition to severance pay. The employer is also under the obligation to pay any unpaid salaries and unused annual leave in any case, even if the employment agreement is terminated with just cause.

           

          Employment security rules apply to employment agreements with indefinite periods. In this case, the employee can claim re-employment by stating that the termination is unjust and invalid. If the court accepts the employee’s claims, and the employee is not re-engaged in work by the employer, the employer will be obliged to pay compensation of not less than four months’ wages and not more than eight months’ wages. Additionally, the employer will be obliged to pay the employee four months’ wages for the time which the employee has not worked.

           

          If the employment agreements of employees who do not benefit from the employment security provisions and work under indefinite term contracts are terminated with abuse of the right to termination, the employee will have the right to claim “bad faith

          compensation” amounting to three times the wages for the period of notice. Bad faith compensation is a completely different compensation from notice pay, and the payment of notice pay does not abolish the right to claim bad faith compensation.

           

          • Consequences of Termination by The Employee with Just Cause

           

          If the employee proves that he/she has terminated the employment agreement with just cause, he/she will only be entitled to receive severance pay. The employee will not have the right to claim notice pay or to file a re-employment lawsuit but will still have the right to demand unpaid salaries and unused annual leave.

           

          1. Termination with Valid Reason

           

          In order for the employee to benefit from employment security provisions, these conditions must be met at the same time:

           

          • The employee must be working in a workplace which has more than 30 employees.

           

          • The employee’s length of service must be at least 6 months.

           

          • The employee must not be the employer’s representative or assistant authorized to manage the entire enterprise, or the employers’ representative managing the entire establishment who is also authorized to recruit and to terminate employees.

          If the above-mentioned conditions are met, the employee will have the right to file a re-employment lawsuit.

           

          Valid reasons are explained in Article 17 of the Employment Law. These reasons are connected with the capacity or actions of the employee and the requirements of the business, workplace and work.

           

          • Reasons in connection with the capacity or actions of the employee

           

           

          These are situations which disrupt the usual order of the workplace, prevent the performance of the work or adversely affect the harmony in the workplace. However, such reasons are not deemed as serious as the reasons for termination with just cause.

           

          • The requirements of the business, workplace and work

           

           

          These are situations not related to the employee’s personality, but are in connection with economic reasons, technological advancements or re-organization.

           

          Even if these reasons exist, termination of an employment agreement must be the last resort. The employer shall firstly inform the employee regarding the poor performance and give the employee a chance to improve or enforce lighter sanctions. However, if it has become impossible for the employer to continue with the employment relation despite the precautions, then the employer may terminate the employment agreement with a valid reason.

          During the termination with a valid reason, the notice of termination must be in written form and the termination reason must clearly be stated. The Court of Cassation ruled that a termination notice sent after the termination will be invalid. Therefore, written notification must be made during termination.

           

          In addition to the above, if the employer wants to terminate the employment agreement on grounds of capacity or the actions of the employee, the employee’s statement must be obtained. Although the statement is not required to be in written form, obtaining a written statement will be useful in the event of a possible future dispute.

           

           

           

          Pursuant to Article 18 of the Employment Law, the employee may first apply to the mediator and if the parties cannot reach an agreement, the employee can challenge the existence of a valid reason and initiate a lawsuit for re-employment.

           

          If the court accepts the employee’s claims, the employer must either re-employ the employee or pay compensation of not less than four months’ wages and not more than eight months’ wages. Additionally, the employer will be obliged to pay the employee four months’ wages for the time which the employee has not worked.

           

          1. Termination by Means of Mutual Agreement

           

          The employment agreement will be reciprocally terminated if the parties enter into a mutual termination agreement. Although the mutual agreement is not regulated under the Employment Law, it is constructed under the provisions regulating freedom of contract pursuant to the Turkish Code of Obligations, and this view has been

          approved by the Court of Cassation. In this regard, if the wills of both of the parties match, the employment agreement can be terminated mutually under conditions set within the mutual termination agreement.

           

          If the employment agreement is to be terminated by means of a mutual agreement, the employment security provisions will not be applied, and thus the Court of Cassation requires a reasonable benefit for the employee. The reasonable benefit must be determined specifically for each situation depending on its nature.

           

          If there is any doubt regarding the termination by means of a mutual agreement, the assessment will be made in favor of the employee.

           

          If there are no reasonable benefits in favor of the employee, the termination by means of mutual agreement will be deemed as invalid and the employee will have the right to initiate a re-employment lawsuit.

           

          1. Collective Dismissal

           

          Pursuant to Article 29 of the Employment Law, a collective dismissal takes place when an employer terminates the employment contracts of:

           

          • At least 10 employees if there are between 20 and 100 employees in total.
          • At least 10% of the employees if there are between 101 and 300 employees in total
          • At least 30 employees if there are more than 301 employees in total.

           

          The terminations of employment agreements must result from economic, technological, structural or similar requirements regarding the enterprise, business or work, and must

          be performed on the same date or on different days within the same month.

           

          The employer has liabilities when implementing collective dismissal. First, the employer must notify the trade union representatives, the Provincial Directorate of Social Security Institution and the Turkish Employment Agency in writing at least 30 days in advance. Such notification must include the reasons for collective dismissal, the number and group of workers which are to be affected and the date of termination proceedings.

           

          The employer must notify each employee individually regarding the termination of their employment agreements in accordance with Article 17 of the Employment Law. The notice periods will start 30 days after the Provincial Directorate of Social Security Institution has been notified. Afterwards, the employer may either terminate the employment agreements by complying with the notice periods determined in Article 17 of the Employment Law or terminate the employment agreement immediately by paying the notice pay corresponding to the notice periods.

           

          In accordance with Article 29/4 of the Employment Law, the employer is obliged to hold a meeting with trade union representatives in order to discuss the subjects explained below:

           

          • Preventing the collective dismissal,
          • Decreasing the number of employees that are to be dismissed or
          • Minimizing the termination’s negative impacts on workers.

           

          If the employer wants to engage employees regarding similar jobs within six months following the finalization of the collective

          dismissal, the employer must firstly re-employ the redundant employees.

           

          If the workplace is to be completely shut down and all operations will definitely be ceased, the employer will only be under the obligation to notify the Provincial Directorate of Social Security Institution and the Turkish Employment Agency at least 30 days in advance. In this regard, the employer is not under an obligation to notify the trade union and is not required to hold a meeting with them.

           

          If the employer does not comply with the rules of collective termination, it will be obliged to pay an administrative fine of TRY 1,050 for each employee, for the year 2020. The employer’s payment of this penalty does not affect the validity of the terminations. Employees’ rights regarding terminations are reserved and they can file lawsuits based on such rights.