Memorandum Regarding The Overview Of The Turkish Labour Code (Law No.4857)

Article by Pekin & Pekin

This memorandum of law has been prepared for the purpose of outlining the principles and procedures regarding the overall framework of the Turkish Labour Code and its application in practice in the Republic of Turkiye ("Turkiye").

1. THE CONTRACT OF EMPLOYMENT

The employment contract is a contract constituted by the undertaking of one party (the employee) to perform a job dependently and of the other party (the employer) to pay wage. The employment contract is not subject to a specific form, unless it is specified otherwise under the Labour Code.

Contracts of employment for a given period of one year and over shall be concluded in writing. These documents are exempt from stamp duty and every kind of dues and charges.

Provided that the restrictions introduced by the provisions of the Labour Code are reserved, the parties may regulate the employment contract in a kind suitable with their needs.

The employment contracts shall be concluded for definite or indefinite term. These contracts may be formed for full-time or part time, or with a trial period or in another kind.

If there is no written contract, the employer, within two months time, is obliged to submit a document to the employee, outlining the general and specific working conditions, daily or weekly work periods, the term of the employment contract; if specified; the amount of salary and the additional payments, if any, the time of payment for the salary and the conditions of termination.

1.1. Fixed-Term And Open-Ended Employment Contracts

Where an employment contract is not made for a period of time, that contract is considered to be for an open-ended period. Fixed-term employment contracts are those written contracts between the employer and the employee made for a specified period or upon objective conditions such as the completion of certain work or the creation of a certain thing.

Fixed-term employment contracts, unless there are justifying grounds, may not be made consecutively. If they are so made, then those contracts are deemed to be open-ended contracts as of their commencements.

Those consecutive employment contracts shall keep their characteristic of being for a fixed period if they are made based on justifying grounds.

Unless based on justifiable grounds, employees that do not have fixed-term employment contracts shall not be treated differently than those equal employees who have, solely on the ground that their contracts are for a fixed-term.

Severable benefits regarding pay and money to be given to employees working under fixed-term employment contracts based on a fixed time period shall be given to such employees in proportion with the time period that they work. Where a certain length of service in the same workplace or at the same operation is required in order to benefit from a particular work condition, the same length of service required from an equal employee working under an open-ended employment contract is applied, unless an application of a different length of service requirement may be justified.

Equal employee means an employee working at an equivalent or similar job in the same workplace under an open-ended employment contract.

1.2. Language Of The Contract

According to Law No.805 regarding the Compulsory Use of the Turkish Language in Financial Establishments, it is imperative that the transactions and contracts are executed in Turkish as a validity condition in the case that both parties involved are Turkish legal bodies. Therefore, the employment contracts should be executed in Turkish where such contracts are made by and between employees who are Turkish citizens and legal entities incorporated under the laws of the Republic of Turkiye.

1.3. Probationary Period

In the event that a probationary period is inserted as a condition into the employment contract, this may only be for a period of 2 (two) months maximum. The probationary period may be extended to 4 (four) months in collective employment contracts. Within the probationary period, parties may terminate the agreement without any notification period and compensation. The fees and other rights for the days the employee has worked are reserved.

2. WORKING CONDITIONS

2.1. The Principle Of Equity

The Labour Code introduces the principle of equity, which entails the prohibition of any kind of discrimination in employment relations on the basis of language, race, gender, political opinion, religion and sect, or similar reasons. Employees working in the same or equivalent jobs may not be discriminated on the basis of gender when being remunerated. Also, no discrimination is allowed among employees working under a definite/indefinite term or part/full time contract.

Upon violation of this principle during the term or termination of the employment contract, the employee shall be entitled to claim compensation up to four months salary and the rights or interests she/he was deprived from.

2.2. Annual Paid Leave

According to the Labour Code, the duration of the annual paid leave cannot be less than;

1. 14 days for employees who have worked in the work place for between 1 year and 5 years (including 5 years),

2. 20 days for employees who have worked in the work place for more than 5 years and less than 15 years,

3. 26 days for employees who have worked in the work place for more than and including 15 years.

However, the annual paid leave cannot be less than 20 days for employees who are 18 years old or younger and employees who are 50 years old or older.

These durations constitute a minimum and may be exceeded by employment contracts but may not be decreased.

However, if the parties so agree, the time periods specified by Article 53 may be divided into three (maximum) provided that one part of it shall not be less than ten days.

The employer shall be obliged to grant unpaid leave up to a maximum of four days, where the employees wish to spend their paid leave in places other than the one in which the workplace is situated, in order to compensate for the time they will spend travelling to and from their chosen destination provided that the employees wish to take such unpaid leave and evidence this issue by documents.

In accordance with Article 54 of the Labour Code; the one year period that must pass before the employee is granted the right of paid leave, is calculated from, the day the previous right of the paid leave has begun and to the following employment year. The employee shall use his paid leave, arising from each of his employment years, within the following employment year.

In accordance with Article 56 of the Labour Code; any other paid or unpaid leaves or rest and sick leaves granted to the employee by the employer cannot be deducted from the annual paid leave and any national holiday, weekly break and general holiday shall not be included in the calculation of the days for the annual paid leave. Additionally, the notice period and the obligatory leave to be granted to the employee for him/her to look for new employment may not coincide with the annual paid leave.

Unless a longer annual leave period is not provided under the Agreement, the Employee should be granted annual leave periods as stipulated by law. However if a longer annual leave period is granted by any other agreement, protocol or customary implementation, then such periods should be respected as they are to be considered as acquired rights.

In addition to annual paid leave, according to Article 46 of the Labour Code, employees are entitled to take a leave of up to 3 (three) days for marriage. Employees are further entitled to take a leave for up to 3 (three) days in the event of death of a parent, spouse, sibling or child.

The employees shall be paid the full wage of any day they do not work if that day is accepted by law as a national or a general holiday; or otherwise if they work on such days, they shall be entitled to an additional one day of wages for each day of work.

2.3. Break Hours

Towards the middle of the working hours and according to local custom and working requirements, employees shall be given a break of:

2.4. Meal Allowance

The Labour Code does not contain any specific provisions with respect to the provision of meals or meal allowances to employees. However, in practice, provision of meal tickets is considered within the scope the employer's obligation to "guard the interests of the employee" which obligation exists by virtue of the Labour Code. In general, unless the employees are provided meal at the work place, meal allowances are the allowances which correspond to the meal expenses of the employee and shall be paid (in cash) in accordance with the number of actual working days of the employee. No Social Security Premium shall be deducted from meal allowance and meal tickets shall be exempted from tax, provided that they are within the limits of the exempted daily amount determined annually by the Ministry of Finance and they are paid to meal providing/catering companies.

In this regard, please note that according to Article 23/8 of the Income Tax Law (Law No. 193), should meal not be provided in the workplace, meal allowances/meal tickets not to exceed TRY 8,25 shall be exempt from income tax in condition that they are paid to meal providing/catering companies. The exceeding amount and the payments made in cash as meal allowance and the benefits provided for this purpose shall be subject to income tax.

2.5. Maternity Leave

Maternity leave shall be in total sixteen weeks, eight of which shall be before and eight of which shall be after giving birth. Where the mother is pregnant with multiple babies, two weeks shall be added to the eight-week period before the birth. However, if the employee so wishes and her health condition allows her to carry on working, the employee shall, with the approval of her doctor, continue to work in the workplace until three weeks before giving birth. In this case, the part of the eight-week leave before giving birth that she has not used shall be added to the eight-week period after giving birth.

The time periods specified above may be increased before and after birth in accordance with the health condition of the employee and the characteristics of the employment. These extended time periods shall be determined in light of a doctor’s report.

Paid leaves shall be granted to pregnant employees during pregnancy for the purpose of periodical doctor examinations.

If it is deemed necessary by medical reports, pregnant employees shall be employed in lighter employments suitable with employees’ health conditions. No reduction shall be applied to employees’ pay under these circumstances.

If the employee so wishes, she shall be granted unpaid leave of up to six months after the completion of the sixteen-week (or eighteen week as the case may be) paid leave. This time period shall not be taken into consideration in calculation of the annual paid leave.

In order for the employees to breastfeed their babies, who are less than one year old, one and a half hours’ off time shall be given to such employees. The employee herself shall determine when and in how many parts to use such time off. Such time off shall be considered part of the daily work hours.

2.6. Military Service And Compulsory Work

The contract of employment of the employee called for military service or for maneuvers or any reason outside active military service or who leaves his/her job for compulsory service resulting from any law may be considered as dismissed two months after the date on which he has left his/her job.

In order that the employee may benefit from this right, he must have been employed in the job in question for at least one year. For an employment exceeding a period of one year, two days shall be added for each additional year. However the total of this period may not exceed 90 days.

The wages of the employee shall not be paid during the waiting period necessary for the contract to be considered as cancelled. The provisions of special laws are however reserved. Even if the termination of the contract is notified by the employer or by the employee to the other party, for another legal reason, the period provided for by law for termination shall start to run after the expiry of this period. However, the provision of this Article shall not apply if the employment contract provides for a definite term and is automatically terminated within the period indicated above.

In cases where employees, who had left work due to any military or legal service, wish to be reemployed within two months after the termination of the said service, the employer shall be obliged to employ them immediately at their former jobs or at similar jobs if there is a vacancy, or otherwise as soon as there is a vacancy, before any other applicants, under the terms and conditions prevailing at the time. If the employer fails to comply with his/her obligation to conclude an employment contract with the ex-employee who had requested to be reemployed although the ex-employee has the required qualifications, he shall be obliged to pay the employee compensation equal to three months’ wages thereof.

2.7. Overtime

Employees may work overtime based on grounds of national benefit, characteristics of employment or increasing productivity. Overtime work is that which exceeds forty-five hours a week within the framework of conditions written in the Law.

Overtime pay per hour to be given to employees shall be normal hourly pay plus a half of that normal hourly pay.

If the hours worked by employees in a week exceed the average weekly working hours in accordance with the principles stated above, this shall be considered as overtime work even though the hours worked by employees does not exceed forty-five hours, where average weekly work hours is determined to be under forty-five hours by agreements. Such overtime pay per hour to be given to employees shall be normal hourly pay plus a quarter of that normal hourly pay.

If the employee wishes not to receive any overtime pay but instead wishes to use some of his/her work time as free time, he may do so by taking one and a half hours off where he/she does overtime work in accordance with paragraph one of this Article and by taking one hour and fifteen minutes off where he/she does overtime work in accordance with paragraph three of this Article.

The employee shall use this free time that he earned within six months and without any deduction in work hours or pay.

Employees may not work overtime where they are employed in short or limited time employment due to health reasons as described in the last paragraph of Article 63 and night employment as described in Article 69.

Employees’ consents must be taken in overtime work.

Overtime work shall not exceed two hundred and seventy hours in a year.

The form of application of overtime work shall be determined by a regulation to be enacted.

2.8. The Obligation To Employ Disabled And Formerly Convicted Employees And Victims Of Terrorism

Pursuant to Article 30 of the Labor Code, "the employer who employs fifty or more employees in its workplace is obliged to provide employment to disabled persons and former convicts and, as also stipulated by Provisional Article 1(B) of the Law on the Prevention of Terrorism (Law No: 3713), to terror victims, on a full time basis and in accordance with their professions and physical and psychological status, in numbers to be determined by the Council of Ministers and to take effect from the beginning of January of every year.

Within this scope, the number of employees to be employed in the work place of an employer who has more than one work place within the borders of a single province shall be determined on the basis of the aggregate number of employees employed in such work places. In addition, in determination of the number of disabled persons, former convicts and terror victims, the nature of the employment contract is not taken into consideration, namely; all employees working under an open-ended employment contract and a fixed-term employment contract shall be taken into account in such calculation. Part-time employment is converted into full-time employment by taking into consideration the time period of employment.

In determining the rates, fractions smaller than a half shall not be taken into consideration and fractions which are more than or equal to a half are rounded up to the nearest whole number.

Employees, who become disabled, formerly convicted or victims of terrorism while working as employees of the employer shall be given priority by such employer.

According to Article 5 of the Regulation Regarding the Employment of Disabled Persons, Former Convicts and Terror Victims (published at the Official Gazette dated March 24, 2004 and No.25412), the employer shall obtain the disabled persons, former convicts and terror victims that its is required to employ in its work place through intermediation of the Turkiye Employment Agency (the "Agency") located at the area of the work place of such employer. The private sector employer who employs disabled persons, former convicts and terror victims without intermediation of the Agency is required to give notice to and have them registered with the Agency within one month at the latest.

No clause against the employment of disabled persons, former convicts and terror victims may be inserted in the contracts of work places entered into with other companies for procurement of work or services.

The employer shall forward to the Agency a request in writing with respect to the disabled persons, former convicts and terror victims that it is obliged to employ also specifying in such request the needed qualifications, within seven days of the date on which such obligation arises. Thereupon, the Agency, within fifteen days following this request, shall send to the employer the requested number of disabled persons, former convicts and terror victims that the Agency is able to provide and deems fit for the specified qualifications together with their qualification documents. From among those so sent, the employer shall employ the ones it deems fit within 15 days at the latest and notify the Agency in writing within seven days about those so employed and those not employed stating the grounds of refusal.

The Agency, shall, within ten days from receipt of the above said notification or if no notification has been made, within thirty days from the date the subject employees were sent, ask of the employer that the vacancies pertaining to the quota set for disabled persons, former convicts and terror victims be filled from among those currently sent or from the lists the Agency sends thereupon which comprise the registered disabled persons, former convicts and terror victims including their professional and educational credentials.

The employer is required to fill the quota vacancies by making its choice from among those sent and/or those provided on the lists within fifteen days from the date of sending of the candidates or notification of the lists.

Pursuant to Article 8 of the Regulation, being a disabled person, former convict or a terror victim cannot be considered as a ground for employment with a lower salary. These employees shall equally benefit from the social aids provided to other employees. No clause against these employees may be inserted into employment contracts or collective employment contracts.

The employer is required to notify the Agency in the event of termination of the employment contract due to any reason whatsoever of a disabled person, former convict or a terror victim stating the grounds of such termination.

Where employees were forced to leave their employment by reason of disability, wish to return to their employment as their reasons for leaving have ceased to exist, the employer shall employ such workers in accordance with the present conditions; immediately if there are any vacancies available same as or similar to their former employment or by prioritizing them for any vacancies that may become available if there is no such vacancy at present. If an employer fails to comply with such obligation, the former employee wishing to return to his/her former employment shall be paid as compensation six months’ pay by such employer.

Fifty percent of the insurance premiums that an employer shall pay in accordance with Social Security Law No. 506 for any employee, that is disabled or lost more than eighty percent of his/her work capability, that the employer employs but is not obliged to employ shall be paid by the Treasury, where an employer employs disabled and formerly convicted employees and employees who are victims of terrorism at a rate that is above the rate determined by the Council of Ministers.

Ratios

In determination of the number of disabled persons, former convicts and terror victims to be employed, all employees working under an open-ended employment contract and a fixed-term employment contract shall be taken into account. In calculation of the total number of employees, the number of disabled persons, former convicts and terror victims presently working in the work place shall be disregarded and shall, in other words, be deducted therefrom.

Within this scope, pursuant to the Decision of the Council Of Ministers No.2005/9077 which took effect upon publishing at the Official Gazette dated July 8, 2005 and No. 25869, the ratios with respect to the year 2006 have been determined as follows;

Concerning the private sector, 3% for the disabled, 1% for the former convicts and 2% for terror victims.

2.9. In-House Physicians

The employers permanently employing at least fifty employees are required to employ one or more in-house physicians depending on the number of employees in the work place and the degree of risk that the work carries with it, and to form an occupational health unit in order to take measures for the health of the employees not benefiting health-care services provided by the Social Security Institutions and take the measures required for health and security in business and offer first aid and urgent treatment and preventive medicine services.

Qualifications, numbers, recruitment, duties, authorities and responsibilities, educations, working conditions of the in-house physicians, how they will perform their duties as well as occupational health units shall be governed and regulated by a regulation issued by the Ministry of Labour and Social Security upon obtaining the opinions of the Ministry of Health and Turkish Medical Doctors Associations.

2.10. Material Amendments On The Working Conditions Of The Employees

The provisions of the Labour Code should be strictly observed, if any material changes on the working conditions of the employees shall be made. As to these provisions please note that, pursuant to the provisions of Article 22 of the Labour Code, material amendments can be made on the working conditions constituted by the employment contracts or the personnel regulation in the nature of its attachment and similar sources or practices of working place, only by informing the employees in writing of the situation. Any amendments, which are not made in compliance with such form and which are not accepted in writing by the employees within six business days, shall not be binding upon such employees.

If the employee does not accept the proposed amendment within this period, the employer may terminate the employment contract, provided that it complies with the notice period and explains in writing that the amendment is based on a justified ground or that there is another justified ground for termination. In this case, the employee in question shall be entitled to file a lawsuit in accordance with the relevant provisions of the Labour Code.

However, the parties may at any time amend the working conditions by mutual agreement. The amendment on the working conditions shall not be enforced retrospectively.

3. TERMINATION OF THE EMPLOYMENT CONTRACT

3.1. Termination Notice

Termination letter is a unilateral notice of intent which results in the termination of the employment contract. Termination notice shall be made in an express and clear manner. Pursuant to the Labour Code, termination notice, similar to other notices, shall be served to the relevant person in writing and against signature. In this regard, the notice shall be served through a notary public or by hand delivery or registered postage-paid mail. In the event that the employee refrains from accepting the delivery of the notification served by hand delivery, a record establishing such situation shall be drawn up in the place of delivery (Labour Code, art. 109). In the event that the notifications served through a notary public or the Post Office (via registered postage-paid mail) are not accepted by the employee, the reason of such notification failure shall be inscribed on the notification envelope by the notifying party. The employer is obliged to draw up a record or take additional actions for returned notifications.

Termination of employment contracts through notice has two different types: Termination with notice period and immediate termination by just cause.

Termination with a notice period is a type of termination in which the employment contract is terminated after the expiration of a certain period of time called the "notice period" upon the serving of the termination notice. On the contrary, immediate termination shows its legal consequences at the moment of receipt of the termination notice by the counter party and terminates the open ended employment contracts.

3.2. Termination With Notice Period

(i) Notice Periods

The employee or the employer is obliged to send notice to the other party before the termination of the open-ended employment contracts.

The notice periods stipulated by the Labour Code are as follows and constitute a minimum:

Due to the connection of Article 17 of the Labour Code on notice periods to public order, and as a result of the Labour Code’s function to protect the employees, the provision of the law is of a partial (relative) mandatory nature in favour of the employer. Accordingly, the notice periods stipulated by the Labour Code may be increased by contracts only in favour of the employees. To this end, in the event that the notice period is increased by a collective agreement or an employment contract, the employer may terminate the employment contract only by complying with such increased periods; however, even if the employee contractually accepts the notice periods over and above the minimum required by the Labour Code, such acceptance shall not be legally binding on the employee under the law, and the employee shall be able to terminate the employment agreement in accordance with the shorter notice periods set out by the Labour Code (2-8 weeks).

Rights and liabilities of the parties shall fully remain in force during the course of the notice period. In the event that a just cause arises within such notice period, the parties may terminate the contract by way of immediate termination. In such cases, consequences of immediate termination shall apply.

(ii) Termination By Advance Payment

The Labour Code provides an opportunity for the employer who does not wish to employ the employee during the notice period. The employer may terminate the employment contract with immediate effect provided that the employee is paid in advance an amount equal to the salary that the employee would receive for the applicable notice period.

In the calculation of the advance payment, the net salary (Labour Code, Art.32) along with the money and other benefits which arise from the contract or laws and have a monetary value, shall be taken into consideration (Labour Code, Art.17/7).

(iii) Leave For Finding A New Job

During the notice periods, the employer is obliged to grant to the employee a leave period which might be necessary for finding a new job, within the working hours and without any salary deduction. 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.

If the employer does not grant the permission to seek new employment or allows less time than that stipulated in this Article, he must pay the employee the salary corresponding to the time to which he was entitled.

If the employer makes the employee work during the time to be allowed for seeking new employment, he must compensate the employee twice the amount of salary he is entitled to even for no work during the time which should be allowed for seeking new employment. (Labour Code, Art.27).

3.3. Abuse Of The Right Of Termination

As understood from the foregoing, open-ended employment contracts may be terminated in accordance with the terms and conditions provided by law. However, if such right of termination is used against its purpose and as a means of damaging the counter-party, such right shall be deemed to have been "abused"). Employment contracts of the employees which are outside the scope of "job security", as described hereinbelow, may be terminated by complying with the notice periods, but without stating any cause. However, in case the employment contract is terminated, in such a way to constitute an abuse of the right of termination, such as; as a result of employee’s filing a lawsuit against the employer, or acting as a witness against the employer or filing complaints before competent authorities against the employer, then, the employer shall pay an indemnity to the employee in the amount of three times the salary corresponding to the notice periods.

3.4. Job Security Regulation

(i) The Concept Of Job Security

According to the Job Security system, as stipulated under the Labour Code, in order for the discharge of the employees, certain grounds provided by the law shall exist. In case such grounds do not exist or cannot be proven by the employer, the employee shall be returned to work, if possible or, if not, shall be paid a special indemnity.

(ii) Conditions Of Benefiting From Job Security

Article 18 of the Labour Code titled "basing termination on valid grounds" determines also the scope of the provisions of "job security" set forth in the subsequent Articles (19-21).

According to Article 18 of the Labour Code, in work places, where thirty or more employees are employed, the employer, who terminates the open-ended employment contract of an employee having at least six months of experience, is required to have a just cause such as incapacity or attitude of the employee or the requirements of the enterprise, work place or the business.

Accordingly, in order for an employee to be able to benefit from the job security, the following conditions must be met:

1. The employee must be working at a work place employing thirty or more employees.

2. The employee must have at least six months of seniority at the work place.

3. The employee must not have the status of an employer representative or employer assistant managing the entire enterprise.

4. The employee must not have the status of an employer representative managing the entire work place and having the authority of recruiting and dismissing employees.

The above-mentioned six months of seniority of the employee is calculated by way of addition of the periods in which the employee works in one or more work places of the same employer.

It must be added that in order for an employee to benefit from the concerned security, he must be working under an open-ended employment contract, and such contract has to be terminated by the employer. Employees working under an employment contract having a term or employees who quit their jobs voluntarily are outside of the scope of the concerned provision.

In determining the number of employees, the number of employees employed at the work places of the same employer in the same field of business as at the date of the termination shall be taken into consideration.

(iii) Just Cause For Termination

The Labour Code states the cases which shall not be considered as a just cause rather than specifying the definition of just cause.

The following cases shall not be considered as a just cause of termination by the employer and the employer shall not rely upon these causes for termination:

1. Trade Union Membership
   • Joining in trade union activities out of work hours,

   • Joining in trade union activities during work hours with the prior consent of the employer.

2. Being a workplace trade union representative.

3. To apply to administrative or legal authorities or to participate in a pending legal proceeding against the employer in order to defend or protect his/her contractual or legal rights.

4. Race, creed, gender, marital status, familial obligations, pregnancy, birth, religion, political view and similar reasons.

5. Absence from work during the period in which women employees are legally allowed not to attend work.

6. Temporary absence of an employee from work due to illness or accident within the waiting period of six-weeks following the notice periods

(iv) Termination Procedures To Be Abided By The Employer

Employer shall notify the employee in writing and the termination notice shall clearly and definitely identify the "cause of termination". An open-ended employment contract of an employee may not be terminated due to any reason regarding the behaviour or productivity of an employee before receiving the defence of the said employee against the allegations with respect to himself/herself. However the employer’s right to terminate the employment contract for the reasons listed in subparagraph (II) of Article 25 of the Labour Code (events contrary to ethical rules and good will and others, please see below) is reserved.

The obligation to take the employee’s defence shall not apply to the employer’s representatives administering and managing the entire business or to their assistants or to the employer’s representatives, who run and manage the entire work place and are authorized to employ and dismiss the employees.

(v) Objection Of The Employee To The Termination Notice And Procedure

The employee, whose employment contract is terminated, may file a lawsuit with the Labour Court within 1 (one) month from the receipt of the termination notification, with the claims of lack of reasoning in the termination notification or invalidity of the reasoning stated therein. In the event that the parties agree, the disagreement shall be transmitted to an arbitrator within the same duration.

The employer is liable to prove the reasonable grounds for the termination. If the employee alleges that the termination was due to another reason, the Employee then has the burden of proving his allegations.

The lawsuit is finalized within two months according to the serial jurisdiction. In case of appeal of the court decision, the Supreme Court of Appeal issues a definite ruling within one month.

(vi) Termination By The Employer Without A Just Cause

Should the employer fail to provide valid reasons for the termination of the employment contract or should the court rule out the given reasons as being invalid and thus disregard the termination, the employer is required to re-employ the employee within one month. If the employer does not re-employ the employee within one month from the application of the employee, the employer shall be liable to pay compensation to the employee, amounting to a minimum of four-month’ salary and a maximum of eight-months’ salary. In the event that the court decides that the termination is invalid, the court shall also determine the compensation amount to be paid in case the employee is not allowed to restart his employment post.

The employee is paid the fees and other rights accrued up to a maximum of four months within the duration of unemployment until the finalization of the court decision.

If the employee has started his job, the advance payment for the notification period and the severance pay, shall be deducted from the payment to be made in accordance with the provisions above. If the employee, who has not started his job, is not granted the notification period or the corresponding payment in advance, the fees for such durations shall be additionally paid to the employee.

The employee is obliged to apply to the employer in order to start to work within ten business days as of the receipt of the finalized decision of the court or arbitrator. If the employee fails to apply to the employer within the abovementioned period, the employer’s termination shall be deemed valid and the employer shall only bear its legal consequences.

This Article shall not apply to the employer’s representatives administering and managing the entire business or to their assistants or to the employer’s representatives, who run and manage the entire work place and are authorized to employ and dismiss the employees.

3.5. Immediate Termination

(i) In General

In case certain material reasons exist making the continuation of the employment relationship difficult, that are explicitly set out in the Labour Code, the parties may terminate the contract without adhering to the notice periods or before the expiration thereof, irrespective of whether the contract is open ended or entered into for a certain period. The Labour Code refers to such right as "immediate termination on just grounds".

The general provision in the Labour Code maintains that the termination notices should be made in writing (Article 109). Furthermore, the Labour Code requires that in immediate termination by the employer, the cause of termination should be clearly and expressly indicated.

(ii) Employer’s Right Of Immediate Termination

The following reasons stated under Article 25 of the Labour Code are exhaustive and in the event of occurrence of such reasons, the Employer may terminate the employment contract without waiting for the notification period or paying any notice pay.

Additionally, for the reasons listed in subparagraph (II) of Article 25 of the Labour Code (events contrary to ethical rules and to good will, please see sub-paragraph (b) below), the Employer has the right to terminate the employment contract without paying any severance pay.

a. Reasons of health:

• If the absence exceeds 3 (three) consecutive days or 5 (five) days in a month, in cases of sickness or disability, resulting from the employee’s own intent or his/her disordered life or his/her addiction to alcohol,

• If it is determined by the Medical Board that the employer had a health condition which is incurable and creates an unhealthy work environment,

Employer’s right of termination of the employment contract without notification for reasons other than those set forth in paragraph (a), such as sickness, accident, birth and pregnancy, shall commence 6 weeks after expiration of the applicable notification period provided as per the employee’s severance according to Article 17. In cases of birth and pregnancy such period starts with the expiration of the period provided according to Article 74. However, salary is not paid for the period that the employee does not go to work, as the employment agreement is suspended for that time period.

b. Events contrary to ethical rules and to good will and others:

• Employee misleading the employer by telling words or giving false information or contending that he/she possesses certain qualifications or conditions on the date of execution of the employment contract that are required in such contract, even though he/she does not possess them,

• Employee insulting or acting in a way that is harmful for the employer’s or one of his/her family members’ honour or integrity, or providing incorrect information or allegations about the employer that are degrading and offensive,

• Employee committing sexual assault on another employee of the employer,

• Employee harassing the employer or one of his/her family members or any other employee of the employer, or acting contrary to Article 84 ("Ban on the use of alcoholic drinks and drugs"),

• Employee not acting in good faith and honesty such as breaching the employer’s faith, committing theft, disclosing the professional secrets of the employer,

• Employee committing a criminal offence in the work place which is punished with a minimum of 7 days of custody and the punishment of which cannot be postponed,

• Employee’s absence without having obtained the permission of the employer or without a peremptory reason for two consecutive days, or twice within a month, on the first office day following a holiday, or three office days in the course of one month.

• Employee not performing the duties, which he/she is under an obligation to and is, reminded to perform,

• Employee jeopardizing the job security voluntarily or by negligence, damaging or creating a loss on the machines, installations or other goods or products that belong to the employer or that the Employer holds for an amount that cannot be recovered with his/her 10 day payment.

c. Occurrence of a compelling event preventing the employee from working in the work place for more than one week

d. In the event of the absence of the Employee exceeds the applicable notice period as a result of his detention and arrest

(iii) Period For Exercising The Right Of Immediate Termination

According to Article 26, authority of termination of the employment contract relying on immoral behaviour and good will, may not be used after 6 (six) days from the day on which the employer learns such behaviour of the employee, and in any case after 1 (one) year as of the occurrence of the conduct. However, the 1 (one) year period shall not apply in case the employee enjoys any material advantage.

Right of compensation to be obtained from the other party is reserved for the employer or the employee who has terminated the contract for aforesaid reasons within the period mentioned above.

3.6. The Consequences Of Termination Of Employment

(i) The Payment Of The Employees’ Pecuniary Rights

In case the employment contract is terminated, the wages and all other rights of the employee measurable in pecuniary terms arising from the employment contract and from the collective employment contract, if any, have to be paid in full (Labour Code Article 32/5).

(ii) The Delivery Of A Job Certificate

The employer shall provide the employee quitting his job a document demonstrating the kind of work the employee has done. The demand of the employee to obtain such document is not necessary, and the Labour Code requires the employer to give such document upon the termination of the employment.

(iii) The Delivery Of A Release Letter

Upon the termination of the employment contract, the employees may provide the employer a signed document indicating that they have received all their rights and have no outstanding receivables.

Release letter is a document certifying that the employee has fully obtained his receivables and that he has no further claims. Such document is submitted to the employer after being signed by the employee. Release letters shall stipulate that the employee has obtained all of his salaries, notice and severance pays and used all annual leaves (or taken the salaries corresponding to any unused annual leaves) and that, he has no further outstanding rights or receivables. Amounts of the foregoing shall also be included in the release letter. It is also important that release letter clearly expresses that the notice and severance pays are fully paid.

Please note that, although no provisions are embodied in the Labour Code or the Code of Obligations, submission of release letter is a very common practice.

The release letter shall be prepared upon the termination of the employment contract and the information contained therein shall be express and clear, and shall contain;

• the name, last name and the address of the employer,

• the name, last name and the address of the employee,

• the date,

• total paid-up amount,

• breakdown of the total paid-up amount (such as, salaries, leave pays, notice pays, severance pays, overtime pays, etc.)

• that there are no outstanding receivables, and

• the signature of the employee.

3.7. Remuneration For Dismissal

(i) Pay In Lieu Of Notice

The employer failing to comply with the notification periods stated above is required to pay to the employee an amount of compensation equal to the salary that the employee would receive for the applicable notice period.

In accordance with the law and jurisprudence of the Court of Appeals, the notice period can not be substituted by a partial payment, coupled with period of employment.

In calculation of the pay in lieu of notice, all the monetary benefits and the other benefits which can be measured in monetary terms arising from the employment contract and from the law shall be taken into consideration in addition to the wage of the employee.

(ii) Severance Pay

Should the employment contracts of the employees be terminated under the following circumstances, the employer shall be required to make severance pay to the employee, provided that the period of the employment with the employer has continued at least for 1 (one) year:

a. by the employer for grounds other than events contrary to ethical rules and to good will and others specified in sub-paragraph II of Article 25 of the Law;

b. by the employee pursuant to Article 24 of the Labour Law, which are basically various health reasons, unethical behaviour of the employer or situations that are immoral or against good faith or force majeure causing the employee not to work for more than one week;

Probationary periods are taken into consideration for the determination of the period of the employee’s employment for the calculation of severance pay.

The employer shall pay the employee a severance pay at the rate of his 30 days’ wages for each full year worked since the date of employment. Payments shall be made pro rata for any incomplete years.

There is, however, a maximum threshold has been fixed for the severance payment, which provides that the severance payment to be made to an employee for each full year may not exceed TRY 1,770.64 between 01.01.2006-30.06.2006 and TRY 1.815.30 between 01.07.2006-31.12.2006.

The 30-day period mentioned may be altered in favour of employees by employment contracts.

Severance pay may not be paid more than once for the same period of service.

Calculation of severance pay shall be made based on the latest wage drawn.

The amount of the severance pay is based on the most recent gross salary of the employee, together with the contractual or legal monetary benefits provided by the employer to such employee, including but not limited to the following, if regularly provided:

(i) Fringe benefits;

(ii) Premiums and bonuses;

(iii) Children and family payments; and

(iv) Occupation, health, food, clothing and residence assistance and any other such assistance with a monetary value and provided at regular intervals (monthly, annually, etc.).

An employee’s gross salary may also include certain other payments in addition to those mentioned above. However, any irregular payments such as overtime payments, maternity leave payments, extraordinary assistance, bonuses, and travel expenses are excluded from the gross salary base in the calculation of the severance pay.

Upon completion of the trials of the lawsuits filed for claims of failing to pay the severance pay in time, the judge shall decide payment of interest for the period of non-payment at the highest rate of interest paid on deposits. Other rights of employees arising from the laws are reserved.

The employer may not have its liability to make severance pay insured by third persons or insurance companies.

(iii) The Amount Equivalent To The Annual Vacation Days Entitled But Unused

In accordance with Article 59 of the Labour Code; where the employment contract has been terminated for any reason, any fee relating to the annual paid leave that the employee has entitled to but has not used, shall be paid to the employee or beneficiaries in accordance with the his salary/wages at the time the employment was terminated.

(iv) Contractual Compensation

Above all, should a compensation is foreside under the employment contract of the employee in case of dismissal, such contractual compensation should also be paid by the Employer.

(v) Work Place Practice

If the employer has expressly promised the employees that in the event of the termination of their employment contracts, certain benefits shall be provided to them upon fulfilment of certain conditions, or if the provision of such benefits has become customary through permanent practice although an express promise was not made, the employees also have to be provided with the concerned benefits.

This memorandum of law relates solely to matters of Turkish law (as in force at the date hereof) and does not consider the impact of the laws of other jurisdictions. It is also strictly limited to the matters stated herein and does not apply, by implication, to other matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.