Principles for Termination of Employment Contracts

Principles for Termination of Employment Contracts in Accordance with The Labor Law Number 4857 (“The Labor Law”)

 I. THE CONDITIONS OF TERMINATION OF THE CONTRACT

 a) The Necessity of Having A Valid Cause of Termination

In the workplaces employing thirty or more workers, the employer must rely on a valid reason for termination of the indefinite employment contract made with the employee who have at least six months of seniority.

The employee who alleges that no reason was given for the termination of his employment contract or who considers that the reasons shown were not valid to justify the termination shall be entitled to sue against that termination with the labor court within one month of receiving the notice of termination. If the employer does not have a valid reason for the termination of the employment contract and if this is determined by the Court or the Arbitrator, the Employer is obliged to have the employee gotten back to work. Otherwise the employer is obliged to pay compensation amount of at least for a period of four months and a maximum for a period of eight months.

b) The Procedure of The Termination

Firstly, the employee’s statement must be taken before the worker can be terminated for reasons related to his behavior or his or her performance.

The employer shall send a termination notice in writing and indicate the reason for the termination.

c) Notice of Termination and Notice Pay

Before terminating the indefinite employment contract, a notice shall have to be served accordingly then the contract shall be terminated:

i. Two-Week Notice Period (2 Weeks): In the case of an employee whose employment has lasted less than six months,at the end of the second week following the serving of notice to the other party;

ii. Four-Week Notice Period (4 Weeks): In the case of an employee whose employment has lasted for six months or more but for less than one-and-a-half years, at the end of the fourth week following the serving of notice to the other party;

iii. Six-Week Notice Period (6 Weeks): In the case of an employee whose employment has lasted for one-and-a-half years or more but for less than three years, at the end of the sixth week following the serving of notice to the other party;

iv. Eight-Week Notice Period (8 Weeks): In the case of an employee whose employment has lasted for more than three years, at the end of the eighth week following the serving of notice to the other party.

These are minimum periods and may be increased by contracts between the parties. The party who does not abide by the rule to serve notice shall pay compensation covering the wages which correspond to the term of notice.

d) Severance Payment

Severance payments are currently regulated by Article 14 of the former Turkish Labor Law number 1475.Article 14 provides that an employer is required to pay severance payments to a terminated employee where (cumulatively):

i. The employee has worked for at least one year in the same workplace;

ii. The employment relationship was terminated:

• By the employer regardless just cause;
• By the employee for just cause;
• Due to military service;
• As a result of a female employee’s resignation due to her marriage, and within one year following the marriage;
• Upon retirement;
• As a result of the employee’s death; or
• Although the employee qualifies for job protection.

II. REASONS FOR TERMINATION OF EMPLOYMENT CONTRACTS

a) The Breaking of The Employment Contract by The Initiative of The Employer

The employer may break the contract, whether for a definite or indefinite period, before its expiry or without having to comply with the prescribed notice periods, without making any penalty or payments in the following cases.

1. For Reasons of Health

> If the employee has contracted a disease or suffered an injury owing to his own deliberate act, loose living or drunkenness, and as a result is absent for three successive days or for more than five working days in any month,

> If the Health Committee has determined that the suffering is incurable and incompatible with the performance of the employee’s duties. In cases of illness or accident which are not attributable to the employee’s fault and which are due to reasons outside those set forth in.

2. For Immoral, Dishonorable or Malicious Conduct or Other Similar Behavior

> If, when the contract was concluded, the employee misled the employer by falsely claiming to possess qualifications or to satisfy requirements which constitute an essential feature of the contract, or by giving false information or making false statements,

> If the employee; is guilty of any speech or action constituting an offence against the honor or dignity of the employer or a member of his family, or levels groundless accusations against the employer in matters affecting the latter’s honor or dignity,

> If the employee; sexually harasses another employee of the employer,

> If the employee; assaults or threatens the employer, a member of his family or a fellow employee,

> If the employee; commits a dishonest act against the employer, such as a breach of trust, theft or disclosure of the employer’s trade secrets,

> If the employee; commits an offence on the premises of the undertaking which is punishable with seven days’ or more imprisonment without probation,

> If the employee; refuses, after being warned, to perform his duties,

> If the employee; without the employer’s permission or a good reason, is absent from work for two consecutive days, or twice in one month on the working day following a rest day or on three working days in any month,

> If the employee; either willfully or through gross negligence the employee imperils safety or damages machinery, equipment or other articles or materials in his care, whether these are the employer’s property or not, and the damage cannot be offset by his thirty days’ pay.

3. Force Majeure

> Force majeure preventing the employee from performing his duties for more than one week.

If due to the employee’s being taken into custody or due to his arrest, his absence from work exceeds the notice period indicated in Article 17 of The Labor Law.

b) The Ending of the Certain Period Within the Scope of the Definite Employee Contract

The definite employment contract ends automatically in the case of the end of a certain period, the completion of a specific job or the emergence of a specific case. At the end of the period of such contracts, the parties may decide to renew the contract.

The termination period of the definite employment contract is predetermined. For this reason, the is no notice period such definite employment contract

III. ASSESMENT AND CONCLUSION

The termination of the employment contract must be based on a just reason and written. Also, the notice periods have to be observed when the employment contract is terminated.

The point to be taken into kind when determining the status of entitlement to seniority and notice pay is which party has terminated the contract. The employee cannot be entitled to severance and notice pay if he/she terminates his employment contract voluntarily.
The exception is that there is a legitimate cause that gives the right to terminate the employment contract immediately.

In the termination process of an employee contract, regardless of the methodology used on terminating it, A Release Letter must be signed by the employee.  Thus, the employee shall be deemed to have received all the receivables such as unpaid wages, overtime, severance and notice pay.