Turkish Labor Law
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An employee whose fixed-term employment contract is terminated by the employer may be entitled to severance pay depending on the conditions, according to Supreme Court ruling. However, there will not be notice payment for termination of such contracts.
LABOR LAW PROVISIONS
Employment Contracts
- Although there are several types of employment contracts owing to the nature of work, regular staff of a company is usually employed under an (open-ended) employment contract for an indefinite period which has a start day but no specified duration or an end date.
- Fixed term employment contract is concluded for a definite (fixed-term) period with an end date. It should be based on the emergence of objective conditions like the completion of a certain work or the materialization of a certain event. There is a legal requirement for contracts to be in writing if they are signed for a fixed time of one year or more.
- An employment contract for a definite period must not be concluded more than once, except when there is an essential reason which may necessitate repeated (chain) contracts. Otherwise, the employment contract will be considered as an open open-ended contract from the very beginning.
Notice Payment:
- According to Labor Law Article 17, “Before terminating a continual employment contract made for an indefinite period, a notice to the other party must be served by the terminating party.
- As a fixed-term employment contract is concluded only for a defined period of time (with a specified end date) there will not be a notice of termination/notice pay obligation.
- No provision against that rule can be put on a fixed-term employment contract.
- However, in case the fixed-term contract is deemed as open-ended for legal reasons, the notice pay will be obligatory.
- Unless there are essential reasons for differential treatment, the employer must not make any discrimination between a full-time and a part-time employee or an employee working under a fixed-term employment contract (contract made for a definite period) and one working under an open-ended employment contract (contract made for an indefinite period).
- Also, according to Turkish Code of Obligations; “Either of the parties may terminate any service contract with a term longer than ten years, after expiry of ten years by observing a notice of termination of six months. The termination shall take effect only at the beginning of the month following this term.”
Severance Pay:
An employee who has worked at least one year is entitled to severance pay whether he/she is working under a fixed-term or an open-ended contract. Labor Law doesn’t make any distinction between these two types of contracts.
According to Supreme Court rulings, if the employer declares that employment contract will not be renewed, this will be deemed as termination by the employer and employee may be entitled to severance pay.
CASE SUMMARY
- Employee’s claim: Employee started to work as a teacher in a private school under a 1 year fixed term contract on 1 September 2014, the contract renewed in 2005 and terminated in 31 August 2006. Employee claims that when the contract renewed in 2005 it should be deemed as an open-ended contract; and as result of this unjust termination he must be paid his notice and severance pay.
- Employer’s Claim: Employer stated that employee were hired in the scope of Law No. 625, and chain contracts are valid in private schools.
- Verdict of Local Court: Supported the employer’s claim stating renewal of a fixed-term employment contract doesn’t make it an open-ended one; and decided that no notice and severance pay should be paid to employee,
- Supreme Court Ruling:
ü As Labor Law, article 17 set forth that “Before terminating a continual employment contract made for an indefinite (open-ended) period, a notice to the other party must be served by the terminating party,” employee is not entitled for notice payment.
ü When the stated period is ended a fixed-term contract will be terminated automatically, if it is terminated by one of the parties before the determined period is ended, the right of severance pay must be analyzed.
ü In the case employer terminated the contract before the fixed-term is ended, and as employer has no just cause to terminate, the employee is entitled to severance pay.
Please note that information contained in this article is not meant to a legal advice, court practices may differ depending on the events.
