General Information
Under Turkish law, labour legislation is applicable to almost all employees, regardless of the size of the employer for which they work. The most signiicant piece of labour legislation in Turkey is the Labour Law. Other signiicant pieces of legislation relating to employment matters are as follows:
· the provisions of Article 14 of the Law No. 1475 which govern severance payments,
· the Labour Health and Safety Law, and
· Trade Union and Collective Bargaining Agreements.
Moreover, the Turkish Code of Obligation includes a chapter on employment agreements, which will be applicable in cases where the above-mentioned legislation does not address the matter in question.
Employment Agreement
Employment agreements are treated diferently than other private agreements under Turkish law. The main objective of employment agreements is to protect the employee and maintain a social balance between the employee and the employer. In order to ensure that these objectives are met, the legal rights and beneits granted to employees under the Labour Law are mandatory and cannot be excluded or altered contractually to the detriment of the employee. However, contractual arrangements which enhance the legal rights and beneits granted to employees under the Labour Law are permitted.
It is mandatory to execute a written agreement should the term of the employment relationship be for one or more years. Except where a contract has not been executed, the employer shall, no later than two months after employment begins, provide a written document containing general and special terms relating to working conditions, daily or weekly working hours, remuneration and supplementary salaries, payment terms, and provisions that both the employer and the employee are required to fulil upon termination of the agreement. Otherwise, a monetary ine may be imposed on the employer for each employee working without a written agreement.
If employment agreements are not in writing, they are still valid; however, the employee may demand from the employer a document bearing his signature and stating the general and, if any, special terms of employment at any time.
a) Definite – Indefinite Term Employment Agreements
Under Turkish law, employment agreements can be made for a fixed or indeinite term.
An employment agreement between an employer and employee will be deemed to be for a ixed term if it is concluded in writing and any one of the following conditions exists:
· if it is concluded for a deinite term work,
· if its term depends on an objective condition such as completion of a certain task, or
· if its term is subject to the completion of a certain aim.
A fixed-term employment agreement cannot be renewed more than once, save where there is a material reason which justiies renewal.
If an employment agreement does not meet the above conditions, it will be considered an indeinite term employment agreement.
b) Part-time – Full time Employment Agreements
Employment agreements can stipulate whether an employee works on a part-time or full-time basis.
If the weekly working hours of the employee are considerably lower than those of a full-time employee, the employment agreement is deemed to be a part-time employment agreement. Part-time employment can be for an indeinite term or fixed-term if the fixed term employment conditions referred to in section a above are met.
c) Outsourcing
Under Turkish law, sub-contractor employees can only be employed for auxiliary works (e.g. security, cleaning and catering and other works that need technologic expertise) which are not part of the core business of the employer. Otherwise, sub-contractor employees that are employed to perform services which are part of the employer’s core business activities may be regarded as employees of the employer. In this case, the sub-contractor employees would be entitled to the same employment beneits as the other employees of the employer and could apply to the labour courts to claim this right.
Obligation Of Employing Disabled Personnel
With a view to support the participation of disabled people in the labour market, Turkish law requires that employers employing fifty or more people in one workplace must hire a certain number of disabled personnel. Accordingly, the number of disabled employees to be hired under this framework should be equal to 3 % of the total employees hired by the employer in a given city. The law also requires that an administrative ine shall be imposed on the employer or the representative of the employer, who is in breach of these rules. Such ine is calculated for each disabled employee that the employer has failed to employ per month.
General Terms Of Employment
a) Remuneration
Payment of salary is the main obligation of the employer under Turkish law. The employee’s main salary has to be monetary and cannot be paid in kind. The net salary does not include premiums, bonuses, social beneits and other side beneits to be provided to the employee. The salary amount can be freely determined under the employment agreement. However, the salary amount cannot be less than the minimum salary determined by the Minimum Wage Determination Commission in every two years at the latest.
b) Working Time
· Probation Period
Agreeing on a probation period is permissible under Turkish law. The probation period cannot exceed 2 months but can be extended to up to 4 months by a collective labour agreement. Within the probation period both parties may terminate the employment agreement without serving a termination notice and without any compensation.
· Standart Working Hours
The working hours of the employee are the times when the employee dedicates his/her work to the employer within or outside the workplace; whether working physically or not. Working hours cannot be more than 45 hours per week.
· Overtime Work
Legal overtime is calculated as the number of hours worked beyond the employee’s normal working day. Overtime hours may not exceed a maximum of 270 hours/90 days per year (and working over 11 hours per day is not permitted). If an employee works overtime, the employer is required to pay the employee an additional 50% of his/her daily salary for weekdays or 100% on Sundays and holidays. Alternatively, the employee may beneit from additional vacation time in lieu of overtime payment. In such case, every hour worked is equal to 1 ½ hours of vacation time.
Overtime work is conditional upon the consent of the employee. If the employer fails to obtain such consent, the Labour Law provides for a monetary fine.
· Balancing Schemes
With a view to providing lexible working hours for employees, standard weekly working hours can be distributed unequally to the days of the week provided that the working hours do not exceed 11 hours per day. Implementation of a balancing scheme is conditional upon the consent of the employee.
· Working on Weekends and Public Holidays
Work is generally prohibited on public holidays unless it is agreed otherwise under the employment agreement. Those required to work during a public holiday are entitled to extra salary equivalent to the portion of their monthly salaries corresponding to the duration of the public holiday.
c) Annual Paid Leave
Under Turkish law, the minimum paid vacations to be provided to employees vary in accordance with the duration of the employee’s employment as follows:
In addition to paid vacations and public holidays, employees are granted paid leave in certain cases. For example, employees are granted 3 days’ paid leave upon the event of (i) their marriage, or (ii) the death of one of their close relatives (mother, father, spouse, sibling or child)
d) Restrictive Covenants
· Non-disclosure
Under Turkish law, the employee has a non-disclosure obligation which is considered part of the employees’ loyalty obligation towards his/her employer. Accordingly, the employee may not disclose, or use for his/her own beneit, any secret that he/shelearns during his/her employment. A breach of such obligation would permit the employer to rightfully terminate the employee’s employment
agreement. The scope of the non-disclosure obligation of the employee is deined by law in a limited way as keeping the secrets of the employer and not beneitting from such secrets. Such obligation can also be detailed in the employment agreement or in a separate non-disclosure agreement.
· Non-competition
The employee and employer are free to negotiate a prohibition on working for the employer’s competitors after termination of employment, and to provide a penalty in case of breach. However, under Turkish law, non-compete obligations are subject to certain limitations in order not to unduly restrict the economic status and the earning power of the employee. Therefore, a non-compete clause is valid only if the employee has had access to some customerrelated or industry-related information that he/she could not have independently acquired. Moreover, the non-compete provision must have a reasonable duration, which should not exceed 2 years. The applicable territory must also be well deined.
Termination Of Employment
a) Overview
Turkish law distinguishes among (i) termination without cause, (ii) termination for valid cause, (iii) termination for just cause, and (iv) collective dismissal. An employment agreement can be terminated (i) by the employer without any cause or for valid cause, or (ii) by either the employer or the employee for just cause, or (iii) by mutual agreement between the employer and the employee.
b) Notice Periods
Notice periods shall be calculated in accordance with the duration of the employee’s service as set forth below (unless a longer notice period is provided for in the individual or collective employment agreement):
c) Employment Protection
The provisions under the Labour Law relating to the termination of employment contracts are mandatory provisions and it is not possible to include any provisions in the employment agreements which are more detrimental to the employees’ rights in this respect. Turkish law provides employees with extensive protection against unilateral termination of the employment agreement by the employer. Therefore, any termination in contradiction of these provisions shall be deemed invalid and employers shall be obliged to pay compensation to the employees.
In this respect, the employer must have a valid cause to terminate the employment agreement if:
– the employer is employing thirty or more employees,
– the employee has been employed for at least 6 months, and
– the employment agreement has an indeinite term.
If the foregoing conditions exist, the employer may not terminate an employment agreement without a valid cause which must relate to the competence or behaviour of the employee or the special conditions of the enterprise, workplace or work. The Labour Law does not speciically list what constitutes a valid cause for termination.
If a valid cause exists, the employer shall serve a written termination notice on the employee by observing the notice periods above. The reason for termination must be included in the notice. Upon termination, the employer shall pay all monetary rights and entitlements that the employee has earned during the term of his/ her employment (e.g. salary, vacation payments, notice payment, severance indemniication).
d) Immediate Termination without Notice
In the event the employer wishes to immediately terminate an employee’s employment, it can do so by paying the relevant notice payment in lieu of waiting until the end of the notice period. Notice payment is equivalent to the monthly salary (unless a higher notice payment is provided for in the individual or collective employment agreement) of the employee corresponding to the relevant notice period.
Moreover, pursuant to Articles 24 and 25 of Labour Law, both the employer and the employee are entitled to terminate an employment agreement for a just cause.
In case of a termination of the employment agreement for just cause, neither the employer nor the employee is required to observe notice periods and can terminate immediately by serving a written notiication to the other party. However, the employer is required to pay the severance indemniication, save where termination is based on the non-ethical conduct of the employee.
e) Collective Dismissal/Collective Redundancies
Collective dismissal will be deemed to have occurred if the following numbers of employees’ employment has been terminated:
In case of collective dismissal, compelling reasons such as technological or organisational reasons relating to the enterprise, workplace or work must exist. In the event the employer wishes to recruit new personnel within six months following the date of collective dismissal, it must preferably recruit the former personnel whose qualiications match those the employer then seeks to employ. In case of a collective dismissal, the employer is also required to give notice to the relevant regional directorate of Social Security Institution 30 days prior to the collective dismissal.
f) Severance Payment
Severance payment is a type of tax-free compensation payable upon termination of the employment to employees who have at least 1 year of service, save where termination has occurred due to an unethical conduct or resignation of the employee.
Severance indemniication shall be calculated by multiplying the total sum of the employee’s last monthly salary by the number of years he/she has worked in the same workplace. There is a ceiling in the determination of the employee’s last 30 days salary, which is determined each year by the Ministry of Family, Labour and Social Services (currently TRY 8.284,51 TL to be applied for the second half of 2021).
g) Transfers Of Undertakings
In case of a transfer of the whole or a part of the business from an employer to another, on the date of transfer, all employment agreements with all of their rights and obligations in that workplace or in the part thereof shall be transferred from the transfer or employer to the transferee employer. Transfer of undertakings only covers the transfer of the whole or part of the business enterprise of the company and does not indicate the transfers of shares or stakes within a company.
Transfer of undertakings does not require the consent of the employee, nor can the employee terminate his /her employment agreement on the grounds of such transfer. On the other hand, upon the transfer, the transferor and transferee employers shall jointly be liable for the employees’ accrued rights and entitlements for aperiod of 2 years from the date of transfer.
Unions And Collective Bargaining Agreements
The Turkish Constitution allows employees and employers to establish and join a trade union. Trade unions may be established to operate in one of the 20 industries (i.e. hunting, ishing, agriculture and forestry, food industry, mines and quarry, petrol-chemicalsrubber-plastic and pharmaceuticals, weaving-ready wear-and leather, paper and forestry, communication, press-publication and journalism, banking-inance and insurance, commerce-oiceeducation and ine arts, cement-soil and glass, metal, construction, energy, logistics, ship building and maritime logistics, storage and warehousing, health and social security and general Works (municipality services)).
Any person considered as an employee who is over the age of 15 may become a member of a trade union or more than a trade union operating in the same industry. The trade unions may enter into collective bargaining agreements in order to arrange employees’ and employers’ economic and social relationships at work.
Employment Disputes
Under Turkish law, labour courts have speciic jurisdiction over employment related matters. The most common subject matter of employment related disputes is the determination of the invalidity of termination, i.e. re-employment, or collection of employee receivables. The burden of proof for the validity of the termination or payment of all employee receivables in full is on the employer.
a) Mandatory Mediation
Newly enacted Code of Labour Courts No: 7036 introduced a mandatory mediation system in employment disputes. As per the Code, before initiating the procedures before the court, the parties must apply for mediation for the below-listed types of employment disputes:
– employee or employer claims for compensation relating to contracts of employment or collective bargaining agreements; or
– claims for re-employment.
If the mediator’s involvement resolves the dispute, then the same dispute cannot be litigated before the courts. Where agreement cannot be reached via mediation, parties’ rights to sue are reserved. This
new system to labour disputes had a very satisfactory outcome with a high success rate, which has also relieved the courts up to an extent and supported a swift resolution of such disputes.