The employer does not have to obtain any permission of a third party but is required to inform the Social Security Institution regarding the redundant employee within ten days following the termination. If the employer breaches this requirement, a fine corresponding to one tenth of the minimum wage (app. TRY 160) shall be imposed.
Additionally, in case of a collective redundancy, the procedures explained in Question 2 shall be applied. If the employer breaches the obligations stated thereunder, a fine of TRY 693 per each employee shall be imposed.
Under the equality provisions of the TLC, the employee may claim that (s)he is discriminated on the grounds that (s)he is not equally treated in terms of salary, compensation and other benefits when compared to other employees with similar conditions, and request the following:
Furthermore, Turkish Code of Obligations imposes an obligation on employers to protect the personality of their employees. According to this, employers are required to take necessary measures to ensure that the employees are not exposed to psychological and sexual abuse in the workplace. If an employee proves that (s)he has been exposed to harassment at the workplace (either by the employer itself or by other employees), the employer would be required to compensate the claimed material and moral damages (if any), unless the employer proves there is no negligence attributable to it.
As per the case law, harassment is deemed to occur, if an employee is specifically targeted, systematically and consistently abused for a certain period of time. However, in practice, it is hard to put forth and/or relate the losses with mental harassment and a moral compensation is not awarded for high amounts. When the precedents are referred, it is less than a month (and even half month) salary of the employee in most of the cases (this may be different depending on the degree of the abuse, though).
For both cases, in addition to abovementioned compensation and claims, such behaviour of the employer may cause a ground for termination on justified grounds by the employee. Then, the employee will be entitled to a severance pay and other employee receivables such as annual leave pay, overtime pay etc.
Finally, having pursued such claims before the courts and have not received any compensation, discriminated employees may apply to Turkish Institution of Human Rights and Equality (“Institution”). Upon an application, the Institution offers a settlement, if deems necessary, by means of a compensation or an injunction imposed on the employer for the benefit of the employee in an effort to discard the discriminative acts.
In cases where there are more than one employees at the same position and only one or some of them will be made redundant or when a termination decision is made over an incident that involves more than one employee, the employer should implement such decision in a consistent, objective and non-arbitrary manner. Under the equality provisions of TLC, the employer is required not only to treat its employees equitably during the course of employment but even while terminating their employment contracts. That is why, the High Court declares the termination that is found to be in breach of the duty of equality of the employer as void in reinstatement cases.
12 What are the possible consequences for the employer if a worker has suffered discrimination or harassment in the context of termination of employment?
The general principles stated in the answer to the Question 11 above, are also applicable in the context of termination of the employment. If the employment contract is terminated in breach of the employer’s duty to act equally or the employee suffered from harassment, the employee shall be entitled to ask for the compensations in Question 11. Along with these claims, the employee shall then initiate a reinstatement claim before the courts as in such cases, the High Court’s practice is to declare the termination void (See Question 8).
Moreover, an administrative fine may be imposed to the employer, upon a complaint to be raised by the employee who was discriminated, due to breach of equality provisions. The amount of the fine is around TRY 200 per employee.
13 Are any categories of worker (for example, fixed-term workers or workers on family leave) entitled to specific protection, other than protection from discrimination or harassment, on the termination of employment?
An employer employing 30 or more employees (including all employees working in all entities and workplaces of the employer worldwide) may only terminate the employment relationship of an employee with at least six months seniority on a valid or justified ground.
In general, according to TLC, employees who work in a workplace that employs 30 or more employees and who have been working in that workplace for at least six months enjoy special protection as to termination of their contracts. These specific provisions are called the job security provisions, according to which, the employment contracts of such employees can only be terminated either on valid or justified grounds (See Question 1).
Furthermore, TLC specifically regulates that pregnant employees should not be treated inequitably. Thus, pregnant employees are granted an explicit protection against any termination that may take place because of their unique situation.
14 Are workers who have made disclosures in the public interest (whistle-blowers) entitled to any special protection from termination of employment?
Turkey has no specific whistle-blower protection regulation. But, under TLC, the employer will not have a valid ground for dismissal where it terminates an employee for seeking to enforce his/her rights or obligations arising from law or the employment contract through administrative or judicial authorities.
Although there is no direct whistle-blower protection, indirect protection may be applicable as per specific provisions in heavily regulated sectors such as banking and capital markets. Moreover, under Turkish Criminal Code, there is an obligation to notify a crime to the competent authorities. If the employer is involved in a criminal activity, the employees shall be obliged to make such notifications (with potential criminal sanctions in the event of non-compliance).
15 What financial compensation is required under law or custom to terminate the employment relationship? How do employers usually decide how much compensation is to be paid?
The employer shall be required by law to pay the following items concurrently with the related termination:
- Severance Pay - equal to the last monthly gross salary of an employee paid respectively for each year of his/her passed service. However, the monthly gross salary to be considered for severance pay calculation is capped. The cap is regularly updated by the government and is applied when the salary in question exceeds it. Currently, the severance pay cap for 2018 is determined as TRY 5,001.76.
- Notice Pay - changes between 2 to 8 weeks’ gross salary, depending on the employee’s length of service (up to 6 months of service– 2 weeks; between 6 months and 1.5 years of service – 4 weeks; between 1.5 years and 3 years of service – 6 weeks; more than 3 years of service – 8 weeks). There is no cap applicable for this and the actual salary of the employee, as well as his/her additional financial benefits (e.g. bonus) is considered. Yet it is possible to make the employee work during the notice period, instead of paying a notice pay.
- Vested, but uncovered allowances (if any) e.g. the amount corresponding to unused annual leave entitlement.
In case of a mutual termination protocol, in addition to the above payments, an amount changing from 4 to 12 months’ salary of the employee is also paid as an additional compensation. The exact amount to be agreed with the employee shall depend on the negotiations to be made with the employee. In recent precedents, the facts like seniority, position, job description, latest salary and social and familial status of the employee have been influential in determining the reasonable benefit. Yet amounts closer to 12 months are very rarely paid and are paid only to those that are at the very executive level (and have a command on the trade secrets of the company). For regular level white collar positions, it is around 4 to 8 months.
16 Can an employer reach agreement with a worker on the termination of employment in which the employee validly waives his rights in return for a payment? If yes, describe any limitations that apply.
The employer and the employee may execute a mutual termination protocol, but it does not in itself constitute a waiver to initiate a reinstatement claim by the employee. The job security provisions under TLC, allows the employee to claim reinstatement within one month following the termination and the High Court establishes that a waiver from such right to claim reinstatement is not possible. However, as the mutual agreement shall be made in writing and the associated payments shall be made via bank transfers, mutual agreements do mitigate the risk of reinstatement and increase the likelihood of dismissal of such cases as long as a reasonable benefit is paid.
17 Is it possible to restrict a worker from working for competitors after the termination of employment? If yes, describe any relevant requirements or limitations.
While the employee is under a statutory obligation not to compete with the employer during the course of employment, an agreement to prolong such restriction for a term after the termination of employment is also enforceable, provided that;
- Such agreement is made in writing (must be specific to the employee, a general reference to the employer’s code of conduct will not be valid),
- The employer has a reasonable interest in asking for such protection against competitors:
o The employee shall have access to the employer’s production, business secrets and its client portfolio
o The employer shall face the risk of incurring substantial losses due to the breach of non-compete covenant
- It does not include unfair restrictions on location and type of activities which put the economic future of the employee in jeopardy,
o Restricted activities should be directly related to the employee's job and limited to the job's subject matter.
o Restrictions should be geographically limited to the areas where the employer is actually conducting business activities; the scope of geographical area shall not be defined as wide as the whole of Turkey, and it shall not exceed the boundaries of the employer's actual sphere of activity.
- The restrictions are limited to a specific period of time; except under special circumstances, this shall not be more than two years.
18 Can an employer require a worker to keep information relating to the employer confidential after the termination of employment?
If the employer has a legitimate interest, the employee is under the statutory duty of confidentiality even post-employment. Therefore, inter alia, the employer may require a worker to keep information relating to the employer confidential after the termination of employment, if it has justified business interests at stake.
19 Are employers obliged to provide references to new employers if these are requested?
Although it is a common practice in Turkey, there is no statutory obligation for the employers to provide references to new employers. In case of providing references, the compliance with data protection legislation should be concerned, by considering the particularities of the specific cases for which reference is provided.
20 What, in your opinion, are the most common difficulties faced by employers in your jurisdiction when terminating employment and how do you consider employers can mitigate these?
It is considered to be very hard for the employer to win a reinstatement case, in case of dismissing an employee on justified or valid grounds under Turkish law, unless the employer has serious concrete written evidences. This is because the Turkish Labour Courts have a tendency to interpret the employment laws in favour of the employees. Although the principle of interpretation in favour of the employee does not have any explicit statutory grounds, it is an established practice of the Hight Court, which is uniformly implemented by the first instance courts. Therefore, a mutual termination protocol may be a preferable option for the employer to mitigate the risk of a reinstatement action by the redundant employee and it may also be advisable for the employee to take the exit package to reduce the legal costs to initiate an action before court.
21 Are any legal changes planned that are likely to impact on the way employers in your jurisdiction approach termination of employment? If so, please describe what impact you foresee from such changes and how employers can prepare for them?
Following the entry into force of the Code of Mediation for Legal Disputes in 2013, it has been noted that 72% of the overall disputes that were taken to mediation were related to employment law and almost all of such has resulted in settlement. Thus, to release the work load of the Labour Courts and to expedite the trial process, in late 2017, the Labour Courts Code has introduced a mandatory mediation process in employment law disputes (related to the employee receivables and reinstatement). Following the implementation of it, mediation has become a prerequisite to initiate a reinstatement claim or a claim on employee receivables before the court. This introduction is widely celebrated in the sector as, if implemented effectively, it is capable of reducing legal costs associated with employment law disputes as well as reducing the time and effort spent on long trial periods. However, if it degrades into a bureaucratic paper shuffling than a functioning alternative dispute resolution, it may, on the contrary to what is sought to be achieved, in fact prolong the entire process.