Termination of the employment contract in Turkey

termination employment contract turkey 1

The Law regulates the termination of the employment contract in Turkey separately for fixed and indefinite term employment contracts.

The termination of a fixed-term employment contract in Turkey is regulated under Article 338 in the old law and Article 430 in the new law. Accordingly, unless otherwise agreed, a fixed-term employment contract shall automatically terminate at the end of the term without the need for a notice of termination.

According to the second paragraph, if the fixed-term contract is continued implicitly after the expiry of the term, it will turn into an indefinite-term contract; however, in the presence of a substantial reason, consecutive fixed-term service contracts may also be concluded. According to the fourth paragraph, if it has been agreed that the contract will be terminated with a notice of termination and neither party has given a notice of termination, the contract will turn into an indefinite-term contract.

The aforementioned regulations are similar to Article 11 of the Labour Law No. 4857. Since it does not contain different regulations for the benefit of the employee, the existing special law regulations are still valid.

According to the third paragraph, either party may terminate the service contract with a term of more than ten years after ten years, by complying with the six-month termination notice period, and the termination will only take effect at the beginning of the month following this period.

The termination of an indefinite-term employment contract in Turkey is regulated in Articles 431 to 439 of the Law.

Articles 431, 432, 433 and 434 of the Law are related to the notice of termination. Accordingly, in general (Article 431), each party has the right to terminate the indefinite-term contract by complying with the termination periods, and before the termination of indefinite-term service contracts (Article 432), the situation must be notified to the other party. The notice periods are determined as two weeks for employees with a service period of up to one year, four weeks for employees with a service period of one to five years and six weeks for employees with a service period of more than five years. Additionally, these periods will not be shortened but may be extended by contract. Additionally, the employer is given the opportunity to terminate the service contract by giving the fee for the termination notice period in advance.

When this regulation is evaluated, it is seen that the regulations introduced do not contain any issues for the benefit of workers, seafarers and journalists according to the provisions of the Labour Law No. 4857, Maritime Labour Law No. 853 and Press Labour Law No. 5993.

In other cases, the judge shall freely assess the material consequences of termination for just cause, taking into account all the circumstances and conditions.

In the case of termination without just cause (Article 438), if the employer terminates the employment contract in Turkey immediately without just cause, the employee may claim as compensation the amount that he/she would have earned if these periods had been complied with, in case of failure to comply with the termination notice period in indefinite-term contracts and the term of the contract in fixed-term contracts. However, in fixed-term contracts, the amount saved by the employee due to the termination of the service contract and the income obtained from another job or intentionally avoided from obtaining another job should be deducted from the compensation. Additionally, the judge may decide to pay a compensation to the employee, the amount of which shall be freely determined by taking into account all the circumstances and conditions. However, the amount of compensation to be determined cannot be more than six months’ wage of the employee. A problem that arises at this point arises in the event that the employer claims that the contract is for a definite term upon the employee’s request for the balance of wages according to the above principles. This claim is considered to be an abuse. In such a case, the contract is accepted as fixed-term in terms of claims in favour of the employee.

On the other hand, a new situation is regulated by Article 439 of the Law. This issue is related to the unjustified failure of the employee to start or quit work. According to the provision of the article, if the employee does not start work or suddenly quits work without just cause, the employer will be entitled to claim compensation equal to one quarter of the monthly wage. The employer is also entitled to claim compensation for additional damages. On the other hand, if the employer has not suffered any damages or the damages suffered are less than one quarter of the employee’s monthly wage, the judge may reduce the compensation. In order for the employer to benefit from this right, the employee must exercise this right through a lawsuit or follow-up within thirty days after the employee does not start work or quits work. Otherwise, the right to claim compensation will be cancelled.

Since the aforementioned regulation is not included in special labour laws, this provision must be applied to other laws.

According to the Law, another situation which can cause the termination of employment contract in Turkey is the death of the employee or the employer.

According to Article 440 of the Law, in the event of the death of the employee, the employment contract in Turkey termination shall be done. The employer is obliged to make a payment to the surviving spouse and minor children of the employee, or his/her dependents, in the amount of one month’s salary starting from the day of death, or two months’ salary if the service relationship has lasted for more than five years.

The obligation to pay compensation to the beneficiaries in the event of the death of the employee mentioned here is a situation in favour of the employee. There is no such obligation to pay such compensation in the Labour Law and Maritime Labour Law. Additionally, although the aforementioned laws stipulate that severance pay will be paid in such a case, since the severance pay regulations require separate conditions (at least one year of employment), the two indemnities must be calculated and paid separately.

However, in Article 18 of the Press Labour Law No. 5953 titled death indemnity, the amount of death indemnity to be paid in the event of the death of the journalist must be calculated and paid in a way that is not less than three times the monthly wage of the deceased journalist. For this reason, this regulation of the Code of Obligations will not affect the provision of Article 18, since the regulation of the Press Labour Law is in favour of the employee.

The fact of the death of the employer is regulated in Article 441 of the Law. Accordingly, in the event of the death of the employer, his heirs will take his place. In this case, the provisions regarding the transfer of the service relationship realised through the transfer of the whole or part of the workplace will be applied by analogy (Articles 428 and 429). Additionally, if the service contract is established by taking into consideration the personality of the employer, it will automatically terminate upon his death. However, the employee may claim an equitable compensation from the heirs for the damages incurred due to the premature termination of the contract.

The consequences of the termination of the employment contract in Turkey are specified in Articles 442 and 443.

Accordingly, with the termination of the employment contract in Turkey, debts become due and payable. According to the aforementioned Article 442, upon the termination of the employment contract, all debts arising from the contract shall become due and payable. The due date may be postponed by a written agreement for up to six months in legal relations established through the mediation of the worker, if the debt undertaken by the third party will be fully or partially fulfilled after the termination of the service contract, up to one year in relations involving periodic performances, up to two years in insurance contracts or in works whose performance is spread over a period longer than six months. In cases where a share of the production is foreseen, the share becomes due at the end of three months following the accounting period at the latest.

Additionally, an obligation of return arises with the termination of the employment contract. According to Article 443 of the Law, in the event of termination of the employment contract in Turkey, each party is obliged to return the things received from the other or from a third party for the account of the other in connection with the service. In particular, the labourer is required to return motor vehicles and traffic permits, wage and expense advances to the extent that they are in excess of the receivables. Additionally, the parties reserve the right of imprisonment.

Since there are no other regulations in the labour laws in accordance with or similar to the aforementioned regulations, these regulations will also cover the situations that will arise according to special labour laws.

The last issue regarding the termination of the employment contract in Turkey is the prohibition of competition.

The new law does not contain any new and different regulation regarding the prohibition of competition, except for the duration. Therefore, it may be continued to be applied as it was previously applied. The term “duration” herein refers to the fact that the period for which the non-competition may continue is limited to two years in the new law, except for special circumstances and conditions, although it was left open-ended in the old law.

According to Articles 444 to 447 of the Law, the employee, who has the capacity to act, may undertake in writing to refrain from competing with the employer in any way after the termination of the contract, primarily from opening a competing enterprise on his own account, working in another competing enterprise, or otherwise entering into any other kind of interest relationship with the competing enterprise. However, the non-competition clause shall be valid only if the service relationship provides the employee with the opportunity to obtain information about the customer environment or production secrets or the employer’s business, and at the same time, if the use of this information is of a nature to cause significant damage to the employer.

The non-competition clause shall not contain inappropriate restrictions in terms of place, time and type of work that would unfairly jeopardise the economic future of the employee, and its duration shall not exceed two years, except for special circumstances and conditions.

The judge may limit the scope and duration of an excessive non-competition clause by freely evaluating all the circumstances and conditions and by taking into consideration the counter-performance that the employer may have undertaken in an equitable manner.

The employee who violates a non-competition clause established under these conditions is obliged to compensate all damages incurred by the employer as a result. If the breach of the prohibition is subject to a penalty clause and there is no contrary provision in the agreement, the employee may be released from the obligation regarding the non-competition by paying the prescribed amount. However, the employee shall be obliged to compensate the damages exceeding this amount.

In addition to the penalty clause and the payment of additional damages that may arise, the employer also has the right to request the termination of the non-competitive behavior, provided that it is expressly reserved in writing in the contract, if the importance of its interests that are violated and threatened and the behavior of the employee justify it.

The non-competition clause stipulated under these conditions will be terminated if it is determined that the employer does not have a real benefit in maintaining this prohibition or if the employment contract is terminated by the employer without a valid reason or by the employee for a reason attributable to the employer.