In Turkey, a frequently encountered problem in labour life is the use of the right of set-off, and imprisonment in the context of the collection of the mutual receivables of the parties in the event of termination of the employment contract. In this context, after the termination of the employment contract, the parties apply transactions against some of the receivables of the other party in the context of collecting their own receivables, and in this context, barter, set-off or imprisonment transactions can be carried out. For example, after the termination of the employment contract, the employee may retain the amount collected by the employee in order to guarantee the notice and severance indemnities to be received from the employer, and the employer may retain the amount of notice and severance indemnity to be paid to the employee in order to receive the amount of the collection made by the employee from him, and in practice, in cases where the mutual trust relationship is broken, it is important which one will be paid first.
It would be appropriate to approach this problem by firstly analysing Article 442 of the Code of Obligations, which is titled as the due date of debts. Accordingly, upon termination of the employment contract, all debts arising from the contract become due and payable. In this context, the first debts that arise are the rights of the employee such as wages and supplements, notice and/or severance pay and annual paid leave pay. Accordingly, the employer must first pay these debts. The return of the amount of the collections, means of production and the like made by the employee should be considered within the framework of his obligation to give back. In this context, the employee whose rights are paid must also deliver them to the employer.
Both for ease of application and to ensure the payment of the debt, the rights of set-off and set-off or imprisonment come into play at this point. In this context, the amounts of receivables and payables are balanced by means of exchange and set-off, and the excess part is paid, thus facilitating the transactions on the one hand, and on the other hand, the collection of the receivable is realised or the collection of the receivable is tried to be guaranteed by using the right of imprisonment when it comes back.
a. Right of settlement and set-off
In the case of an employment contract, Articles 139, 142, 143, 144, 145 and 407 of the Code of Obligations are applicable in relation to the issue of settlement and set-off. Articles of the Code of Obligations are applicable.
According to Article 139 of the Law, in general, if two contracting parties mutually owe each other a sum of money or other identical acts and both debts are due and payable, each of them may settlement their receivables for their debts. In fact, even if one of the receivables is disputed, the settlement may be asserted. According to Article 142, in the event of the bankruptcy of the debtor, creditors may settlement their receivables against their debts to the bankrupt, even if they are not due and payable. According to Article 143, which regulates the provisions of settlement, the settlement may only be realised upon the debtor’s notification of the intention to settlement to the creditor, and in this case, both debts shall be extinguished by the amount of the lesser debt at the time of settlement.
According to Article 144, which regulates the receivables that may be set-off with the consent of the creditor, receivables such as alimony and labour wages, which are obligatory for the maintenance of the debtor and his family and which, due to their special nature, must be given directly to the creditor, may be set-off only with the consent of the creditor after the emergence of the right of settlement. Finally, according to Article 145, it is also possible for the debtor to waive the right of settlement in advance.
Law 407. Article 407 of the Law specifically regulates the relationship between wages and setlement and stipulates that the employer may not set-off its receivables from the employee and the wage debt without the consent of the employee. Thus, the scope of the limitation in Article 144 has been further extended, and Article 407. In Article 407, the consent of the employee, which is required for the part of the wage that is necessary for the subsistence of the employee’s family under Article 144, has been taken into consideration for the entire amount of the wage. Again, Article 407. Accordingto the provision of Article 407, this limitation will be removed if the worker has intent in the occurrence of the damage. However, even in this case, the damage must be a fixed damage, the intention of the worker in the occurrence of the damage must be revealed by a judicial decision and the amount to be exhanged must not exceed the attachable part of the wage.
Based on these legal regulations, it is seen that a special importance is attributed to the wages of the employee in terms of payment of debts arising from employment contracts by means of settlement and set-off. Accordingly, if the employee’s wage is the employee’s receivable held by the employer, it is only possible to settlement this amount against another receivable with the consent of the employee, and even if this damage occurs with the intention of the employee, this intention must be revealed by a judicial decision, the damage must be a fixed damage and the amount to be settlementd must not exceed the amount of the employee’s garnishable wage, which we can generally say one-fourth.
However, as can be seen, all these limitations are related to the wages of the employee. As such, the payment of the employee’s wages arising from the termination of the employment contract through settlement shall be subject to the aforementioned limitations. On the other hand, it is seen that these limitations are not related to other labour receivables arising from the termination. In this case, the employee’s receivables such as notice and severance pay, annual leave pay can be settlementd for the debts owed to the workplace and the employer. In fact, as per the provision of Article 139, even if there is a dispute about these debts, in other words, even if there is a dispute between the employee and the employer on these issues, in other words, even if there is a lawsuit between the employee and the employer on these issues, the settlement can be made. Again, accordingto Article 142, in the event of the bankruptcy of the employer, settlement may be made even for receivables that have not terminated the employment contract, in other words, for receivables that may only become due upon termination of the employment contract.
Accordingto Article 143 of the Law, since the debt will be terminated only by the amount of the lesser debt, the collection of the more receivable can be requested at any time and the collection can be ensured by any means. In this respect, when the settlement method is used, the employee or employer with a higher debt must pay the remaining debt to the other party.
b. Right of imprisonment in Turkey
The use of the right of imprisonment in Turkey in the termination of the employment contract has found an application area in Article 443 of the Code of Obligations titled “obligation to return”. According to the provision of the article, in the event of termination of the employment contract, each party is obliged to return the things taken from the other or from a third party for the account of the other, in connection with the service. In the regulation, it is emphasized that the employee is obliged to return motor vehicles and traffic permits, wages and expense advances to the extent that they exceed the receivables. Finally, the regulation underlines that the parties reserve the right of imprisonment in Turkey.
It will be necessary to refer to the provisions of the Turkish Civil Code No. 4721 as to what the right of imprisonment in Turkey is and how it can be used.
Accordingly, accordingto Article 950 of the aforementioned Code, in general, the creditor may imprison the movable property or negotiable instruments belonging to the debtor and in his possession with his consent, until the debt is paid, if the debt is due and the nature of this property is related to the debt.
Accordingto Article 952 of the Civil Code, this right may be exercised by the creditor in the event of the debtor’s insolvency, even if the debt is not due and payable. Even if the insolvency occurred after the delivery of the movable or occurred before, but the creditor learnt about this situation after the delivery, the creditor may exercise the right of imprisonment even if it is incompatible with an obligation imposed by the creditor that the thing will be used in a certain way or with the instructions given by the debtor at the time of delivery or before.
Additionally, accordingto Article 951, the right of imprisonment may not be exercised on movables that are not suitable for conversion into cash, or in cases that are incompatible with the obligation undertaken by the creditor or with the instructions given by the debtor at the time of delivery or previously, or with public order.
Considering the provisions of the right of imprisonment in Turkey, based on the provisions of Article 953, it is seen that in cases where the debt is not fulfilled and sufficient security is not shown, the creditor may request the conversion of the impounded goods into money in accordance with the provisions of pledge subject to delivery (Articles 939-949 of the Turkish Civil Code No. 4721) by notifying the debtor beforehand.
Accordingly, the right of confinement is an action that can be performed on a movable or negotiable instrument that is given to the employee by the employer with his/her consent and therefore the employee is in possession of it. Additionally, the employee’s receivables must be due and the movable or negotiable instrument in his possession must be related to his work.
In this case, it is not possible to impose a lien on an immovable property (land, house) or on an immovable property taken from the employer against his/her will (such as being taken by force) or on an immovable property (land, house) or before the employee’s receivables are due (before the termination of the employment contract), except for the wages during the continuation of the employment contract or if the movable or negotiable instrument in his/her possession is not related to his/her work.
Again, the right of imprisonment in Turkey cannot be exercised on movables that cannot be converted into money (e.g. photographs with only sentimental value, etc.) or in violation of the obligations undertaken by the employee with the employment contract or an instruction given by the employer during or after the delivery of the movable and finally in violation of public order. In this context, for example, if the employee has undertaken to leave the production tools used by the employee to the workplace every evening, or if the employer has given an instruction to leave these tools to the workplace every evening during or after the delivery of these tools, although it is not written in the contract, the right of imprisonment cannot be exercised on these tools. Similarly, if the delivered movable is a criminal offence such as drugs, unlicensed weapons, etc., or if the delivered movable is of a nature that concerns public security, such as a radioactive material, it is not possible to exercise the right of imprisonment in Turkey.