LABOUR LAW, SOCIAL SECURITY LEGISLATION, EMPLOYMENT OF EXPATRIATES
LABOUR LAW
The Labour Law that entered into force in June 2003, governs the relations between employers and employees. The Law contains several provisions in conformity with the international regulations of the International Labour Organization and the European Union.
Employment Contracts
An employment contract may be concluded for a definite period of time or for an indefinite period. An employment contract that covers a definite period exceeding one-year, as well as the contracts for temporary work and on-call work must be in writing. The law does not require a special form for the employment contracts. Employment contracts are exempted from duties, levies and stamp tax. The Law stipulates a trial period of maximum 2 months, which can be extended up to 4 months under the provisions of a collective labor agreement. The contract can be terminated within the trial period, without providing any notice or indemnity. The rights of the employee related to the wages and other benefits for the days worked thereby shall be reserved.
Principal Employer - Sub-Contractor Relation
Hiring a sub-contractor is subject to certain conditions pursuant to the new Labour Law. In accordance with the new rules, only the works that are of secondary nature comparing to the main subject of the principal employer, like an auxiliary work or a part of the main work can be sub-contracted, like cleaning, loading, unloading and construction works.
In such a relation, the principal employer is jointly responsible against the employees of the sub-contractor with respect to the liabilities arising from the Labour Law, the employment contract and the collective agreements, to which the sub-contractor is a party. Sub-contractors are obliged to notify hires made by them on behalf of the principal employer with the competent Labour Regional Directorate within a period of one month. According to recent amendments, in the event of any fictitious transactions, the employees of the sub-contractor are deemed to be the employees of the principal employer.
Notification Period
If a party, either employer or the employee, wishes to terminate an indefinite period employment contract, the terminating party is required to give an advance notice to the other party, before actually terminating the contract. The notice periods are proportional to the length of the employment and range between 2 to 8 weeks. In case of failure to comply, the party in default shall be obliged to pay as compensation an amount equal to the allowances corresponding to the above notice periods.
Dismissal of the Employees
In case of termination of an employment agreement with indefinite term, employers must comply with the procedure stipulated under the Labour Law. Employers, who terminate an employment agreement with an indefinite term where the employee has been in employment for at least six months at a workplace with thirty or more employees, shall be obliged to justify the termination with a due cause based on the qualifications or behaviors of the employee or the requirements of the enterprise, workplace or business. Furthermore, employment agreements with an indefinite term shall not be terminated due to any reason regarding the behavior or productivity of the employee unless the employee concerned has been provided with an opportunity to defend him/her self.
Collective Dismissal of Employees
Collective dismissal shall mean the dismissal of at least (i) ten employees at working places where there are 20 to 100 employees, (ii) at least 10% of the employees at working places where there are 101-300 employees, or (iii) at least thirty employees at working places where there are 301 or more employees, in the same month. Employer who intends the collective dismissal of employees shall terminate the employment contract due to economic, technological or structural reasons or due to similar causes related to the enterprise, working place or business. The employer shall give notice to the representatives of the trade union at the workplace, to the related regional directorate and to the Directorate of the Turkish Employment Authority, in writing, at least thirty days in advance. Termination notices are effective within 30 days following submission of a notification to the competent Regional Directorate.
Consequences of Termination with Invalid Reason
In cases, when it is determined by the court that the termination is invalid as being unjustified, employers are obliged to re-instate the employee within a period of one month as from the relevant demand of employee. Failure to do so, employer is obligated to pay to the employee compensation ranging from four to eight months allowances, upon the discretion of the court.
Furthermore, wage and other benefits up to 4 months should be also paid to the employee for the period during which the employee did not work.
The employee is obliged to make an application to the employer in order to start working, within ten workdays following the notification of the court. Otherwise, the termination made by the employer shall be deemed valid.
Severance Indemnity
Employers, who terminate an employment agreement of an employee – with the exception for termination due to justifiable reasons– must pay to the employee severance indemnity, provided that the employee has completed one year service, starting from the actual date of commencement of employment.
If the employee terminates the employment contract, he/she shall not be entitled to receive a severance payment, unless the resignation is due to military service, retirement, involuntary employment under conditions detrimental to health or safety or unethical behavior of the employer. In addition, women who resign within one year from the date of marriage are also entitled to receive severance payment.
Severance pay corresponds to one-month salary for each full year of service starting from the date of commencement of employment. The most recent gross monthly remuneration of the employee prior to the date of termination, shall serve as a basis for the calculation of severance indemnity. However, in case the allowance is not constant due to the nature of the work, then the average amount will be calculated by dividing the total amount earned during the last year by the total number of working days. There is a ceiling to be paid as severance indemnity for each year of service. If the salary exceeds the ceiling, the ceiling is taken as the basis for the severance pay calculation. The ceiling for the period between 01.01.2010-30.06.2010 is TRY 2,427.03 and for the period between 01.07.2010-31.12.2010 is TRY 2,517.01
Annual Paid Leave
An employee is entitled to annual paid leave after completing one year of service at the workplace from the employment date, including the trial period. The minimum length of the annual paid leave is proportional to the seniority of the employee in the workplace and ranges between 14 to 26 work days. For the employees under the age of 18 and above the age of 50, annual paid leaves shall not be less than 20 days, irrespective of the length of employment. If an employment contract is terminated, the employee is paid the amount of salary, corresponding to the number of non-utilized leave days
Working Hours
In general, the working hours shall not exceed forty-five hours in a week. Upon mutual agreement between the parties, the standard hours of work in a week may be distributed irregularly among the days of the week, provided that the total hours of work do not exceed eleven hours in a day. An employer shall be entitled to make the compensation work to be performed for hours not worked in a period of two months in certain cases.
Overtime Work and Works for Extra Hours
Overtime shall mean hours of work in excess of forty-five hours per week. In cases, where an employment contract stipulates that the total hours of work in a week is to be less than forty-five hours, any work that exceeds the average weekly hours of work (up to forty-five hours), shall be deemed as works for extra hours.
The employee who works overtime or extra hours shall, at his/her own discretion, be entitled to use one hour thirty minutes of free time for each hour of overtime, and one hour and fifteen minutes of free time for each hour of extra work instead of receiving a salary payment of with increased wages of 50% and 25% for overtime and extra work respectively.
Unions and Collective Employment Agreements
In Turkey, there is no obligation for a worker to be a member of any union, and there is no obligation to make a collective employment agree¬ment for any sector of business or for any work place. Unions are established on an industry wide basis. The formation of labour unions for a specific work place or specific job shall be not allowed.
In order to be covered by a collective employment agreement, a worker must be a member of a union. There is no such requirement for the employer. In order to be a bargaining agent, a union must have a membership of more than half of the workers employed in the work place and must also include at least 10% of all the workers employed in the specific sector.
The Law sets a series of steps to be followed
The Labour Law that entered into force in June 2003, governs the relations between employers and employees. The Law contains several provisions in conformity with the international regulations of the International Labour Organization and the European Union.
Employment Contracts
An employment contract may be concluded for a definite period of time or for an indefinite period. An employment contract that covers a definite period exceeding one-year, as well as the contracts for temporary work and on-call work must be in writing. The law does not require a special form for the employment contracts. Employment contracts are exempted from duties, levies and stamp tax. The Law stipulates a trial period of maximum 2 months, which can be extended up to 4 months under the provisions of a collective labor agreement. The contract can be terminated within the trial period, without providing any notice or indemnity. The rights of the employee related to the wages and other benefits for the days worked thereby shall be reserved.
Principal Employer - Sub-Contractor Relation
Hiring a sub-contractor is subject to certain conditions pursuant to the new Labour Law. In accordance with the new rules, only the works that are of secondary nature comparing to the main subject of the principal employer, like an auxiliary work or a part of the main work can be sub-contracted, like cleaning, loading, unloading and construction works.
In such a relation, the principal employer is jointly responsible against the employees of the sub-contractor with respect to the liabilities arising from the Labour Law, the employment contract and the collective agreements, to which the sub-contractor is a party. Sub-contractors are obliged to notify hires made by them on behalf of the principal employer with the competent Labour Regional Directorate within a period of one month. According to recent amendments, in the event of any fictitious transactions, the employees of the sub-contractor are deemed to be the employees of the principal employer.
Notification Period
If a party, either employer or the employee, wishes to terminate an indefinite period employment contract, the terminating party is required to give an advance notice to the other party, before actually terminating the contract. The notice periods are proportional to the length of the employment and range between 2 to 8 weeks. In case of failure to comply, the party in default shall be obliged to pay as compensation an amount equal to the allowances corresponding to the above notice periods.
Dismissal of the Employees
In case of termination of an employment agreement with indefinite term, employers must comply with the procedure stipulated under the Labour Law. Employers, who terminate an employment agreement with an indefinite term where the employee has been in employment for at least six months at a workplace with thirty or more employees, shall be obliged to justify the termination with a due cause based on the qualifications or behaviors of the employee or the requirements of the enterprise, workplace or business. Furthermore, employment agreements with an indefinite term shall not be terminated due to any reason regarding the behavior or productivity of the employee unless the employee concerned has been provided with an opportunity to defend him/her self.
Collective Dismissal of Employees
Collective dismissal shall mean the dismissal of at least (i) ten employees at working places where there are 20 to 100 employees, (ii) at least 10% of the employees at working places where there are 101-300 employees, or (iii) at least thirty employees at working places where there are 301 or more employees, in the same month. Employer who intends the collective dismissal of employees shall terminate the employment contract due to economic, technological or structural reasons or due to similar causes related to the enterprise, working place or business. The employer shall give notice to the representatives of the trade union at the workplace, to the related regional directorate and to the Directorate of the Turkish Employment Authority, in writing, at least thirty days in advance. Termination notices are effective within 30 days following submission of a notification to the competent Regional Directorate.
Consequences of Termination with Invalid Reason
In cases, when it is determined by the court that the termination is invalid as being unjustified, employers are obliged to re-instate the employee within a period of one month as from the relevant demand of employee. Failure to do so, employer is obligated to pay to the employee compensation ranging from four to eight months allowances, upon the discretion of the court.
Furthermore, wage and other benefits up to 4 months should be also paid to the employee for the period during which the employee did not work.
The employee is obliged to make an application to the employer in order to start working, within ten workdays following the notification of the court. Otherwise, the termination made by the employer shall be deemed valid.
Severance Indemnity
Employers, who terminate an employment agreement of an employee – with the exception for termination due to justifiable reasons– must pay to the employee severance indemnity, provided that the employee has completed one year service, starting from the actual date of commencement of employment.
If the employee terminates the employment contract, he/she shall not be entitled to receive a severance payment, unless the resignation is due to military service, retirement, involuntary employment under conditions detrimental to health or safety or unethical behavior of the employer. In addition, women who resign within one year from the date of marriage are also entitled to receive severance payment.
Severance pay corresponds to one-month salary for each full year of service starting from the date of commencement of employment. The most recent gross monthly remuneration of the employee prior to the date of termination, shall serve as a basis for the calculation of severance indemnity. However, in case the allowance is not constant due to the nature of the work, then the average amount will be calculated by dividing the total amount earned during the last year by the total number of working days. There is a ceiling to be paid as severance indemnity for each year of service. If the salary exceeds the ceiling, the ceiling is taken as the basis for the severance pay calculation. The ceiling for the period between 01.01.2010-30.06.2010 is TRY 2,427.03 and for the period between 01.07.2010-31.12.2010 is TRY 2,517.01
Annual Paid Leave
An employee is entitled to annual paid leave after completing one year of service at the workplace from the employment date, including the trial period. The minimum length of the annual paid leave is proportional to the seniority of the employee in the workplace and ranges between 14 to 26 work days. For the employees under the age of 18 and above the age of 50, annual paid leaves shall not be less than 20 days, irrespective of the length of employment. If an employment contract is terminated, the employee is paid the amount of salary, corresponding to the number of non-utilized leave days
Working Hours
In general, the working hours shall not exceed forty-five hours in a week. Upon mutual agreement between the parties, the standard hours of work in a week may be distributed irregularly among the days of the week, provided that the total hours of work do not exceed eleven hours in a day. An employer shall be entitled to make the compensation work to be performed for hours not worked in a period of two months in certain cases.
Overtime Work and Works for Extra Hours
Overtime shall mean hours of work in excess of forty-five hours per week. In cases, where an employment contract stipulates that the total hours of work in a week is to be less than forty-five hours, any work that exceeds the average weekly hours of work (up to forty-five hours), shall be deemed as works for extra hours.
The employee who works overtime or extra hours shall, at his/her own discretion, be entitled to use one hour thirty minutes of free time for each hour of overtime, and one hour and fifteen minutes of free time for each hour of extra work instead of receiving a salary payment of with increased wages of 50% and 25% for overtime and extra work respectively.
Unions and Collective Employment Agreements
In Turkey, there is no obligation for a worker to be a member of any union, and there is no obligation to make a collective employment agree¬ment for any sector of business or for any work place. Unions are established on an industry wide basis. The formation of labour unions for a specific work place or specific job shall be not allowed.
In order to be covered by a collective employment agreement, a worker must be a member of a union. There is no such requirement for the employer. In order to be a bargaining agent, a union must have a membership of more than half of the workers employed in the work place and must also include at least 10% of all the workers employed in the specific sector.
The Law sets a series of steps to be followed