Feb 14

Procedure governing termination of employment contracts in Turkey

employment-tribunal-sign  In Turkish Legal System, termination of the employment contracts may terminate in three methods: Termination of the Employment Contract Based on Justifiable Cause (I), Rightful termination of the Employment Contract (II) and termination through mutual rescission agreement (III).

 

 

 

I- Termination of the Employment Contract Based on Justifiable Cause (Art. 18 of Turkish Labour Code No. 4857)

According to the Turkish Labour Law, the employee’s capacity (performance), the  employee’s behaviours and necessities of the business, the work place or job specificationsare grounding reasons for the termination based on justifiable cause:

A. Termination based on the capacity/poor performance of the employee: In order to be valid:

-The Company (Employer) should have objective performance evaluation criteria and those shall be circulated to all employees beforehand and in written form.

-The employee should be employed for the proper job with respect to his/her educational background and capacity.

-Termination of the employment contract must be the employer’s “last option” (ultima ratio). In other words, before the termination it should be investigated the reasons of the employee’s poor performance, whether the employee can be trained to overcome this deficiency. Despite this, if the poor performance persists, it should be examined whether the employee can be evaluated in a different department of the Company. That is to say, the termination of the employment contract should be the final remedy.

-The employer should obtain a written statement of defence from the employee, in the absence of which the employer’s termination of the employment contract will be considered invalid.  (Art. 19)

B.  Termination based on the employee’s behaviours: The employee’s behaviours, in contravention of the employment contract and work discipline should affect adversely the business and the work place which renders unlikely the continuation of the employment contract. The employer should obtain a written statement of defence from the employee for his/her negative behaviours and the employee must be warned in writing to correct behaviour.

Despite this, if the employee fail to correct his/her behaviour, the employment contract can be terminated on the condition that the principle of “last option (ultima ratio)” is respected and the employee’s written defence is obtained. (Art. 19)

C. Termination due to the necessities of the business, the work place or job specifications: The Company should take a written “operational decision” regarding organizational changes and implement this decision consistently. In case the employee cannot be employed in a different department in the Company with respect to his/her educational background, capacity and current status, the employment contract can be terminated on the condition that the principle of “last option (ultima ratio)” is respected and the employee’s written defence is obtained.

According to termination methods (A), (B) and (C) based on justifiable cause, the employment contract can be terminated with payment of the severance and notice pay. Termination of the employment contract must be grounded and notified to the employee in written.

In spite of everything, within 30 days following the termination, the employee can file for a “reinstatement case” against the employer claiming that the termination of his/her employment contract was invalid. The burden of proof that the termination was based on a valid reason rest on the employer. As a result of the judgment, if the court concludes that the termination was unjustified, the employee must make an application to the employer within ten working days of the date on which the finalized court verdict was communicated to him/her and the employee must re-engage the employee in work within one month. If, upon the application of the employee, the employer does not re-engage him in work, compensation to be not less than the employee’s four months’ wages and not more than his eight months’ wages as well as compensation up to four months’ total of his wages for the time he is not reengaged in work until the finalization of the court’s verdict shall be paid by the employer.

If the employer reemploy the employee, the severance and notice pay shall be deducted from the compensation of the reinstated employee. Also if the employee fail to apply to the employer within ten working days of the date on which the finalized court verdict was communicated to him, the termination shall be deemed valid, in which case the employer shall be held liable only for the legal consequences of that termination.

II- Rightful (Immediate)Termination of the Employment Contract  (Art. 25 of Turkish Labour Code No. 4857)

Rightful termination of the employment contract is regulated in Article 25 of Turkish Labour Code No. 4857. To give an example, the fact that the employee assaults the employer or a fellow employee; being absent from work without the employer’s permission or a good reason for two consecutive days; the fact that the employee commits a dishonest act against the employer such as a theft can be listed as grounds for rightful termination. The rightful termination of the employment contract based on grounds listed in Article 25 must be materialized in 6 working days following having been informed of the event. In case of a rightful termination, the employer is not obliged to pay a severance payment or give the employee notice of the termination. The employee can challenge the existence of justified grounds by initiating a lawsuit against the employer. The burden of proof that the termination was based on a just cause rest again on the employer. If the court concludes that the termination was unjustified, our explanations regarding the “reinstatement case” above are valid.

III- Termination of the Employment Contract Through Mutual Rescission Agreement

Termination of the employment contract through “mutual rescission agreement” is not regulated in Turkish Labour Code. However, because it contains benefits for the employees, the Turkish Supreme Court recognises this method of termination. Termination through mutual rescission agreement is different from the employee’s resignation.

It can be materialized in two ways: With employee’s demand or the employer’s demand.

In case the termination through “mutual rescission agreement” is requested by the employer, the payment of ‘legal rights’ (payment in the amount of severance and notice compensation) and an ‘additional benefit’ should be provided to the employee. Said additional benefit is equivalent to the amount of compensation that the employee may obtain of the “reinstatement case”, i.e. employee’s 8-12 months’ wages.

In case the termination through “mutual rescission agreement” is requested by the employee, it would be beneficial that the employee apply to the employer with an appropriate reason and provides a written petition explaining that he/she wishes to resign through a mutual rescission agreement and he/she claims a compensation in the amount of severance and notice pay as well as an additional benefit. Upon the employer’s acceptance of the employee’s request, both parties sign the agreement and the mutual rescission agreement is concluded.

The most important criteria asked by the Turkish Supreme Court is whether the employee signed this agreement with his/her freewill and determinism without any pressure and whether an ‘additional benefit’ is provided to the employee.

In case the mutual rescission agreement fulfils above mentioned criteria, the Turkish Supreme Court denies the reinstatement cases initiated by the employee’s.

For more information please send e-mail to burcu@osmanogluhukuk.com and contact Burcu Osmanoğlu.

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