Formation & Termination of Employment Contracts in Turkey
Turkish Labor Code, Act No. 4857, enacted in 2003, regulates the working conditions and work-related rights and obligations of employers and employees working under an employment contract. The Code forbids discrimination, including any that is based on language, race, sex, political opinion, philosophical belief or religion.
Formation of Employment Contract
An employment contract is an agreement whereby one party (the employee) undertakes to perform work in subordination to the other party (the employer) in return for remuneration. The contract is not subject to any special form, unless specified by the Act. A written form is required for employment contracts. Such written documents are exempted from stamp tax and other fees.
The parties are free to draw up the employment contract in a manner commensurate to their needs, without prejudice to the limitations brought up by legislation.
Employment contracts can be made for a definite (fixed-term) or indefinite (open-ended) period. In terms of the manner of working, these contracts may be concluded on a full-time or part-time basis, or with a trial (probation) period, or in various other forms.
Termination of Employment Contract
Before terminating a continual employment contract made for an indefinite period, notice to the other party must be served by the terminating party. Table 1 shows the minimum duration of notification periods, which may be increased by contracts between the parties.
Table 1. Notification periods for termination of employment contracts.
|Duration of Service||Duration of Notification Period|
|0-6 months||2 weeks|
|6-18 months||4 weeks|
|18-36 months||6 weeks|
|>36 months||8 weeks|
The party who does not abide by the rule to serve notice must pay compensation to cover the wages corresponding to the appropriate term of notice. The employer may terminate an employment contract by paying in advance the wages corresponding to the term of notice. The employer must give at least 2 hours/day permission to employees for searching a new job. Employees can use this right collectively.
In addition to notice payment, employers are liable to pay severance payment in case employer terminates the employment contract. One month gross wage must be paid to employees per one working year as a severance payment in this case.
An employer who terminates the contract of an employee engaged for an indefinite period, who is employed in an entity with ≥30 workers and who meets a minimum seniority of 6 months, must have a valid reason for such termination, connected with the capacity or conduct of the employee or based on the operational requirements of the entity or service. The notice of termination must be served in writing, clearly specifying the reason(s). The worker must be given an opportunity to defend against allegations of poor conduct or performance. However, in cases of employee misconduct or malicious/immoral behavior, the employer has the right to break the employment contract.
Any employee who considers that their employment contract was terminated without valid reason can lodge an appeal with the Labor Court within 1 month of receiving the notice of termination. The court must apply fast-hearing procedures and conclude the case within 2 months. If the decision is appealed, the Court of Cassation must issue its definitive verdict within 1 month.
If the court or arbitrator concludes that the termination is unjustified because no valid reason has been given or the alleged reason is invalid, the employer must re-engage the employee within 1 month or be liable to pay 4–8 months’ wages by way of compensation (the appropriate amount to be paid can be designated in the court’s verdict).
The employee can be paid up to 4 months’ wages and other entitlements until the finalization of the court’s verdict. If advance notice pay or severance pay has already been paid to the reinstated employee, this is deducted from the compensation. If term of notice has not been given and advance notice pay has not been paid, wages corresponding to the term of notice can also be paid to the employee not re-engaged in work.
For re-engagement in work, the employee must make an application to the employer within 10 working days of the date of the final court verdict. If the employee does not apply within the given period of time, the termination will be deemed valid, in which case the employer will be held liable only for the legal consequences of that termination.