I. Labor Law in Turkey
In Turkey, labor law broadly refers to the branch of law that regulates the relationships and rules between workers, employers, and the state. Labor law can be classified into individual labor law and collective labor law. The main legislation governing labor relations in Turkey is the Labor Law No. 4857, which outlines the general principles between employees and employers.
The primary purpose of labor law is to protect the employee, who is in a weaker and more vulnerable position in labor relations.
II. Employment Contract
The definition of an employment contract is provided in the Labor Law No. 4857. According to this law, an employment contract is an agreement where the employee undertakes to perform work under the direction of the employer, and the employer agrees to pay wages in return. The characteristics of employment contracts are as follows:
- They may be for a fixed or indefinite period,
- They impose rights and obligations on both the employee and the employer,
- They establish personal relationships between the parties,
- They create a bilateral and continuous obligation.
1. Elements of an Employment Contract
There are three essential elements of an employment contract: work, wages, and dependency. If any of these elements are missing, a valid employment contract cannot exist.
1. a. Work
There is no limitation on the type of work that can be performed. What matters is that the work brings economic value to the other party. However, the work must not be against the law, morality, or decency. It is irrelevant whether the work is performed physically or intellectually. Any work or activity that is considered economically viable can be the subject of an employment contract.
1. b. Wages
Wages are both an essential element of the employment contract and an important obligation of the employer to the employee. Compensation for the work performed by the employee is represented by wages. They can be paid in cash or in-kind. Wages do not need to be pre-determined. What is important is that the work agreed upon in the contract is understood to be performed for compensation. In such cases, the wage will be determined based on the customs and practices of the location, provided it is not below the minimum wage. If work is agreed to be performed without compensation, it cannot be considered an employment contract.
1. c. Dependency
Dependency is the element that distinguishes employment contracts from other types of contracts and is the most critical aspect of the employment contract. When the employee works under the supervision and control of the employer, following their instructions and commands, it reflects dependency. The employee is obligated to follow the employer’s instructions. If the employee fails to fulfill their duties, the employer has the right to impose disciplinary measures.
2. How Is an Employment Contract Made? What Should It Include?
Article 8 of the Labor Law states: “It is mandatory to make employment contracts in writing for contracts with a duration of one year or more… In cases where no written contract is made, the employer is required to provide the employee with a written document indicating the general and specific working conditions, daily or weekly working hours, basic wage and any wage supplements, wage payment period, contract duration if it is for a fixed term, and the provisions that must be followed in case of termination, within two months at the latest.” Accordingly, employment contracts lasting longer than one year must be in writing. For contracts lasting less than a year and where no written contract is made, the employer must inform the employee of the working conditions as stated in the law.
Contracts that must be made in writing include:
- Employment contracts with a fixed term of one year or more,
- On-call work contracts,
- Remote work contracts,
- Team contracts,
- Contracts for the employment of children under the age of 14 in artistic, cultural, and advertising activities,
- Employment contracts made with journalists under the Press Labor Law,
- Employment contracts made with seafarers under the Maritime Labor Law (Article 5 of the Maritime Labor Law).
Special regulations apply to employment contracts made with foreign workers. According to Law No. 6735 on International Labor Force, foreigners’ employment in Turkey is subject to a work permit issued and extended by the Ministry of Family, Labor, and Social Services. Administrative fines are imposed on employers and employer representatives who employ foreigners without a work permit.
3. Termination of an Employment Contract
In Turkish law, an employment contract can be terminated either by dismissal or for reasons other than dismissal. Non-dismissal reasons include the expiration of the contract term, mutual agreement (settlement), and death.
3.a. Non-dismissal Reasons
The first non-dismissal reason for terminating an employment contract is the expiration of the contract term. This applies to fixed-term contracts, where the contract automatically ends at the end of the term without the need for a notice of termination. Since this type of termination is not based on dismissal, the employee is not entitled to dismissal-related rights under labor law. For example, no notice compensation will be due at the end of the term, and the employee will not be entitled to severance pay, even if they have worked for at least one year.
Employment contracts can also be terminated by mutual agreement between the parties. This situation, known as settlement in practice, arises from the freedom of contract, which is guaranteed by the Constitution. The agreement may be explicit or implied. Since both parties have the intention to terminate the contract, this is not considered a dismissal. Unless the employee can prove a defect in their will (mistake, fraud, threat), they cannot claim compensation for dismissal-related rights if they terminate the contract by mutual agreement.
If the employee dies, the employment contract terminates automatically. In this case, the employer is required to make a payment equivalent to one month’s wage to the surviving spouse and minor children, or if none, to the dependents of the deceased, starting from the date of death. If the service relationship lasted more than five years, the payment must be equivalent to two months’ wages.
If the employer dies, the legal heirs take their place. In this case, the provisions regarding the transfer of the employment relationship, which occurs in the case of a workplace transfer, are applied by analogy. However, if the contract was specifically based on the employer’s personality, it automatically terminates upon their death. In such cases, the employee may claim damages from the heirs if the contract was terminated before the end of the term.
3.b. Termination
Another reason for the termination of an employment contract is dismissal. Dismissal can be categorized into two types: termination with notice and immediate termination with just cause.
4. Termination
4.a. Termination with Notice
The first type of termination is termination with notice, which applies to indefinite-term employment contracts. In this type of termination, the parties are given the option to end the contract by notifying the other party of their intent to terminate within a specified period. This type of termination is only applicable to indefinite-term contracts and does not apply to fixed-term employment contracts.
Article 17 of the Labor Law regulates the notice periods for termination with notice. The parties must adhere to these notice periods and notify the other party of their intent to terminate the indefinite-term employment contract within the specified time frame. According to the Labor Law:
- For employees who have worked less than six months, the contract is deemed terminated two weeks after the notice is given.
- For employees who have worked between six months and one and a half years, the contract is deemed terminated four weeks after the notice is given.
- For employees who have worked between one and a half and three years, the contract is deemed terminated six weeks after the notice is given.
- For employees who have worked more than three years, the contract is deemed terminated eight weeks after the notice is given.
4.b. Immediate Termination with Just Cause
The foundation of just cause termination lies in the principle of good faith. When it is unreasonable to expect one of the parties to continue the employment relationship, that party is granted the right to terminate the contract. The parties can terminate the contract immediately, without prior notice, when just cause is present.
In the case of just cause termination, the employment contract may be either fixed-term or indefinite-term. Therefore, if just cause arises, the party wishing to terminate the contract will not have to adhere to the notice periods for an indefinite-term contract or wait for the expiration of a fixed-term contract.
Employee’s Right to Terminate for Just Cause
Under the Labor Law, an employee can terminate a fixed-term or indefinite-term contract early based on conditions in Article 24. These reasons include health issues, immoral or unethical behavior, and force majeure.
If the job endangers the employee’s health or life, or if the employer or a coworker contracts a contagious disease, the employee can immediately terminate the contract.
Another reason for just cause termination is immoral or unethical behavior. However, unethical behavior is not limited to those listed in the article. The employee may terminate the contract before its expiration or without waiting for the notice period in the following cases:
- If the employer provides false information or misleads the employee about key terms of the employment contract during its formation,
- If the employer insults the honor and dignity of the employee or a family member, or sexually harasses the employee,
- If the employer assaults or incites a crime against the employee or their family, or commits an offense that requires imprisonment or makes damaging accusations,
- If the employee is sexually harassed by another employee or third party in the workplace, and the employer fails to take necessary measures after being informed,
- If the employer fails to calculate or pay the employee’s wages according to legal provisions or contract terms,
- If the employer provides less work than agreed upon when wages are calculated based on piece rate or workload, and the employer does not compensate the employee for the shortfall, or the agreed-upon working conditions are not met.
In these cases, the employee is entitled to terminate the contract immediately.
The third group of just causes for immediate termination is “force majeure.” As per Article 24(III), force majeure refers to situations where the employer is unable to provide work to the employee due to circumstances beyond their control, such as a power outage, flood, or fire.
Employer’s Right to Terminate for Just Cause
Article 25 of the Labor Law grants the employer the right to terminate the employment contract immediately with just cause. In accordance with Article 25, the employer may terminate a fixed-term employment contract before its expiration or an indefinite-term contract without waiting for the notice period. The first three provisions of Article 25 are the same as those listed in Article 24.
In addition, Article 25 includes a fourth reason for immediate termination with just cause that is not covered in Article 24. This provision states that if an employee is detained or arrested, and their absence exceeds the notice period outlined in Article 17, the employer may terminate the contract immediately for just cause. However, the employer must wait for the notice period, which corresponds to the employee’s length of service. For example, if a five-year employee is detained or arrested and unable to perform their duties, the contract can be terminated after eight weeks of absence, but not immediately. During this period, the employee is not entitled to wages.
5. Severance Pay
Since severance pay is legally tied to the termination of an employment contract, it is not payable in cases of non-termination (such as death or mutual agreement).
In the Turkish legal system, severance pay is regulated by Article 14 of the former Labor Law No. 1475, which remains in effect under the provisional Article 6 of the current Labor Law No. 4857. Severance pay is payable to employees who have worked for at least one year and whose contracts are terminated for specific reasons outlined by law. Regardless of whether any damage has occurred, an employee who meets these conditions is entitled to 30 days’ wages for each year worked.
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