Procedures For Terminating the Agreement
It is possible for the employee or employer to terminate the employment contract with a unilateral declaration of will. Pursuant to relevant regulations, the notification of termination which is to be given by the employer must be in writing. In other words, there is a written form requirement for the termination notification to be valid. However, the resignation of an employee is not required to be made in written form, even though it is advised for employees to submit their resignations in writing, as it may be helpful in a possible future lawsuit.
Article 17 of the Employment Law provides that both employer and employee have the right to terminate an indefinite term employment contract and lays out certain termination procedures. To initiate the process of termination, the party who wishes to terminate the employment agreement must provide a definite and clear notice of termination. There are certain notice periods to be followed by both parties during termination with a valid ground:
- two weeks, for those whose employment agreement lasted less than 6 months;
- four weeks, for those whose employment agreement lasted 6 months to 1.5 years;
- six weeks, for those whose employment agreement lasted 1.5 to 3 years; and
- eight weeks, for those whose employment agreement lasted more than 3 years.
The employment contract remains in full force and effect during a termination notice period; wherein if either party is in breach, then the other party may elect to terminate for cause.
During the term of notice the employer must grant the employee the permission to seek new employment within working hours without any deduction from his/her wage. The time devoted to this purpose should not be less than two hours daily and if the employee so requests such hours may be added together and taken at one time. But if the employee wishes to take these hours at one time, he must do so on the days immediately preceding the day on which his employment ceases and must inform the employer in advance. On the other hand, parties may pay compensation in lieu of notice to terminate the agreement effective immediately. The parties cannot waive their rights regarding notice periods and notice payments.
If the employee is to work during the notice period, such period should be fully completed. In other words, if the notice period is four weeks, the employee must either work for four weeks or receive the monetary equivalent of four-weeks’ notice period.
Instant Dismissal
Pursuant to Article 25 of the Turkish Employment
Law, an employer can immediately terminate the agreement by instant dismissal on the following grounds:
- health reasons
- if the employee has contracted a disease or suffered an injury owing to his own deliberate act, loose living or drunkenness, and as a result is absent for three successive days or for more than five working days in any month.
- if the Health Committee has determined that the suffering is incurable and incompatible with the performance of the employee’s duties.
- circumstances against morals and goodwill;
- if, when the contract was concluded, the employee misled the employer by falsely claiming to possess qualifications or to satisfy requirements which constitute an essential feature of the contract, or by giving false information or making false statements;
- if the employee is guilty of any speech or action constituting an offence against the honour or dignity of the employer or a member of his family, or levels groundless accusations against the employer in matters affecting the latter’s honour or dignity;
- if the employee sexually harasses another employee of the employer;
- if the employee assaults or threatens the employer, a member of his family or a fellow employee, or the employee arrives at the work place with alcohol and drinks alcohol in the work place,
- if the employee commits a dishonest act against the employer, such as a breach of trust, theft or disclosure of the employer’s trade secrets;
- if the employee commits an offence on the premises of the undertaking which is punishable with seven days’ or more imprisonment without probation;
- if, without the employer’s permission or a good reason, the employee is absent from work for two consecutive days, or twice in one month on the working day following a rest day or on three working days in any month;
- if the employee refuses, after being warned, to perform his duties;
- if either wilfully or through gross negligence the employee imperils safety or damages machinery, equipment or other articles or materials in his care, whether these are the employer’s property or not, and the damage cannot be offset by his thirty days’ pay.
- compelling reasons; force majeure preventing the employee from performing his duties for more than one week.
- If the employee is under arrest and should his/her absence exceeds certain notification periods.
An employee can also terminate the agreement by instant dismissal on the first three of the above grounds. In addition, the employee has the right to terminate his/her employment agreement if his/her salary or other employment rights are not calculated or paid properly.
The right to terminate the employment contract for the immoral, dishonorable or malicious behavior of the other party must be exercised before the expiry of six working days after the facts of the case have become known. If it becomes known after the expiry of one year after the commission of the act, this right does not apply. However, this one-year period does not apply if the employee has extracted material gains from the act concerned. If the employer terminates the employment agreement due to the employee’s acts against moral and goodwill, the employee will not be entitled to any severance payment.
Employee's Resignation
An agreement can be terminated by the employee’s resignation. In such case, the employee cannot receive any severance payment.
Termination On Notice
The employer and the employee can terminate the employment agreement on notice. The minimum period of notice varies between two weeks and eight weeks depending on the length of service. (Please see the “Procedures For Terminating The Agreement” section)
Termination By Reason Of The Employee's Age
Employment agreements may not be terminated due to the employee’s age. However, the employee may terminate his/her employment agreement after meeting the retirement conditions and request severance payment. The employee may also decide to continue working, even if he/she has the right to retire.
Automatic Termination In Cases Of Force Majeure
Pursuant to the general principles of the Law of Obligation, in case of force majeure, contracts can be terminated, provided that certain requirements are met.
Collective Dismissals
In accordance with Article 29 of the Employment Law, it shall be deemed as collective dismissal if the total employee number in the workplace is
- between 20 and 100 and at least 10 employees are being dismissed,
- between 101 and 300 and at least ten percent of the employees are being dismissed,
- 301 and more and at least 30 employees are being dismissed
and at the same time or at different times within 1 month. Only the employees whose employment contracts are terminated with a notice period in accordance with Article 17 of the Employment Law falls within the scope of collective dismissals. Therefore, employees whose employment contracts are terminated due to (i) just cause pursuant to Article 25 of the Employment Law or (ii) resignation are not considered and evaluated within the scope of collective dismissals.
If the Employer wishes to collectively dismiss employees as for reasons of an economic, technological, structural or similar nature necessitated by the requirements of the enterprise, the workplace or the work, he shall notify the workplace union representatives, related regional directorate and Turkish Employment Agency in writing at least 30 days prior to the collective dismissal. Such notification should contain the reasons for collectively dismissing the employees, the number and group of employees that will be subject to such collective dismissal and the time period collective dismissal will take place.
Termination notices made to the employees shall become effective 30 days after the notification made to relevant regional directorate Ministry of Labour and Social Security by the employer regarding his intention for collective dismissal.
Pursuant to Article 100 of the Employment Law, an employer who fails to dismiss employees in accordance with collective dismissal provisions, shall pay an administrative fines for each dismissed employee.
Termination By Parties’ Agreement
Employment agreements can be mutually terminated by the parties if the termination ground is also accepted by both parties. A mutual termination agreement also prevents the employee’s potential claims related to the termination such as severance payment, notice payment, re-employment lawsuit etc.
Principally, if the employment agreement is to be terminated through a mutual termination agreement, the employer must pay a “reasonable benefit” which is a minimum of 4 months’ salary, in addition to the severance payment. The employer should also provide the payment of unpaid salary amount as of termination date and unused annual leave payments.
Directors Or Other Senior Officers
There are not any separate rules to fire the directors or other senior officers but simply terminating the agreement does not bring the directorship to an end. In order to do that, certain requirements of commercial law, in particular relating to articles of association of the company must be met.
Special Rules For Categories Of Employee
All employment relations except collective bargaining are generally regulated under Employment Law. Press workers are excluded from the definition of "employee" in the Employment Law as they are defined by their own legislation. Additionally, other employment relations such as employees working for sea and transport activities, in establishments and enterprises employing a minimum of 50 employees (50 included) where agricultural and forestry work is carried out, construction work related to agriculture which falls within the scope of family economy, in works and handicrafts performed in the home without any outside help by members of the family or close relatives up to 3rd degree (3rd degree included), domestic services, apprentices, without prejudice to the provisions on occupational health and safety, sportsmen, those undergoing rehabilitation, establishments employing three or fewer employees shall not be subject to Employment Law concerning the provisions which are stated within their respective legislation. These employment relations shall be subject to Employment Law only if there are no provisions within their legislations. Additionally, Employment Law will again be applied in terms of labour relations listed below:
- Loading and unloading operations to and from ships at ports and landing stages,
- All ground activities related to air transport,
- Agricultural crafts and activities in workshops and factories manufacturing implements, machinery and spare parts for use in agricultural operations,
- Construction work in agricultural establishments,
- Work performed in parks and gardens open to the public or subsidiary to any establishment,
- Work by seafood producers whose activities are not covered by the Maritime Labour Law and not deemed to be agricultural work.”
Whistleblower Laws
No specific whistleblowing legislation exists in Turkey. However, certain provisions in various laws and sub-legislation applies to whistleblowing including those listed below:
- The Constitution of the Republic of Turkey
- Civil Code, Law No. 4721 (as amended)
- Criminal Code, Law No. 5237
- Turkish Code of Obligations No. 6098
- Employment Law No. 4857
- Turkish Data Protection Law numbered 6698
- Witness Protection Law No. 5726
- Regulation on Deletion, Destruction and Anonymisation of Personal Data No. 30224
- Code of Criminal Procedure, Law No. 5271
Additionally, with regards to the whistleblower protection, Turkey is a party to all international anti-corruption conventions, such as:
- United Nations (UN) Convention against Corruption
- The International Labour Organisation’s Termination of the Employment Convention No. C158.
In accordance with Article 15/3-c, if an employee submits a complaint against his/her employer to administrative or legal authorities concerning his/her legal or contractual obligations, the employer cannot terminate the employment agreement of such employee. This provision provides a protection for whistleblowers, solely against their employers. However, other regulations and general rules still apply to all whistleblowing procedures.
Specific Rules For Companies in Financial Difficulties
If the creditors come to the company for attachment, adequate assets of the employer, which cover a certain amount of the employees' salaries, must be separated and they cannot be touched for attachment.
Additionally, in the event of the employer’s bankruptcy, all employment receivables related to Employment Law of the employees, which have accrued within one year prior to the adjudication of bankruptcy, including notice and severance payments, are considered as privileged and such receivables shall be registered at the first rank within the order table.
Special Rules For Garden Leave
“Garden leave” concept refers to the time when employees spend a certain period of time physically away from the workplace. During this period the contractual employment relationship continues, and employees continue to receive their salaries. Turkish Law does not explicitly regulate garden leave; however, it also does not explicitly restrict it. Therefore, parties of the employment agreement can determine the use of garden leave within the employment contract. The agreement can be executed as part of the main agreement or as a separate agreement, and it should be also regulated under the company directives. If the company directives or the employment agreements do not have any regulations towards garden leave, the employer cannot put the employee in a garden leave without obtaining such employee’s consent. Otherwise, the employee will have the right to terminate his/her employment agreement.
Restricting Future Activities
There are some rules relating to restriction of future activities, e.g., non-competition provisions. Moreover, in order for such non-competition provisions to be valid, the place, subject and time limit of such non-competition must be specified and determined. However, in any case such restrictions cannot hinder freedom of working. Non-competition provisions are only applicable and valid when the employment relationship provides the employee with client portfolios, information on production secrets, or the employer’s operations, and where usage of this information would damage the employer. The parties can determine a penalty amount in cases where the employee violates the non-competition obligations. However, such penalty amount should not damage the economic freedom of the employee, and the court has the right to decrease or completely remove the penalty amount in the event of a possible lawsuit.
Furthermore, non-disclosure agreements are also a way to restrict the future activities by establishing a confidential relationship between the employer and employees. Non-disclosure agreements prevent employees to reveal their employer’s trade secret even after the termination of their contract of employments. This restriction type is also regulated in the Turkish Code of Obligations as the employee is legally required to be loyal towards his/her employer. Parties may again determine a penalty amount in cases where the employee violates his/her non-disclosure obligations. The penalty amount cannot restrict or damage the employee’s economic freedom, and the court again has the right to decrease or remove the penalty amount in the event of a possible future lawsuit.
Severance Payments
Employees are entitled to severance after one year of working. If the employer terminates the employment agreement with just cause based on the reasons stated in Article 25/II of the Employment Law (immoral acts and acts against goodwill) or if the employee terminates the employment agreement without any just cause, the employer will not be under the obligation to pay severance. However, in the event that the employee terminates his/her employment agreement with a just cause, his/her severance payment must be made. In the event of resignation due to military service and retirement, and resignation of the women employees within one year after getting married, severance payment must be paid. If the employee dies, the severance payment shall be paid to the heritor of the employee.
Severance payments must be calculated based on the employee’s latest full gross salary. The full gross salary includes the monetary equivalent of all additional payments and services provided by the employer such as transportation allowances, meal salaries, health / life insurance costs etc. The full gross salary will not include payments / services which have never been provided by the employer. There is a certain statutory cap on severance payments, which is updated each year. Severance cap for the year 2021 was TRY 8.284,51.
Special Tax Provisions And Severance Payments
No taxes will be levied on the statutory cap of severance payments. If the severance payment exceeds the legal cap, then it will not be deemed severance and thus tax will be levied thereon.
Allowances Payable To Employees After Termination
Employers are not required to contribute towards any allowances payable to employees after termination. However, in case of change of ownership of business, a former employer's liability towards its employees continues jointly with the new employer for an additional two years.
Time Limits For Claims Following Termination
If during termination no reason is mentioned or if the employee claims that the mentioned reason is not justifiable, the employee may initiate a re-employment lawsuit based on these claims by applying to the mediator within one month after the termination, and the employee must file the re-employment lawsuit with 2 weeks following the mediation meetings.
Severance and notice payments must be evaluated in two categories. Concerning employment agreements which were terminated before 25.10.2017 (which Provisional Articles 3 and 8 were published at this date) severance payment and notification compensation claims will be subject to a 10-year time limit following the termination. If the employment agreements were terminated after 25.10.2017, severance and notice payment claims will be subject to a 5-year time limit. Similarly, annual paid leave claims are also subject to a 5-year time limit following the termination. Additionally, salary and overtime claims must be issued within 5 years of the date on which payment was/should have been made.