Blog

Contract LawTerminating Employment Contract Without Compensation in Turkey

Terminating Employment contract without compensation is the most difficult scenario especially if your employment contract wasn’t drafted by a legal consultant.  They dictate the terms and conditions of a relationship, setting the expectations for all parties involved. However, circumstances may arise necessitating the termination of these contracts. In Turkey, the process of terminating a contract, especially without compensation, is governed by specific laws and regulations. This article aims to offer a comprehensive guide on the termination of contracts in Turkey, focusing on the legal aspect of this process.

Terminating Employment contract in Turkey

In Turkey, employment contracts are regulated by the Turkish Labour Code No. 4857, enacted in 2003. The Code stipulates the conditions for both the creation and termination of employment contracts.

An employment contract, also referred to as a ‘Service Contract’ under Turkish law, is an agreement where one party (the employee) commits to perform work under the subordination of the other party (the employer) in return for remuneration. These contracts can be made for a definite (fixed-term) or indefinite (open-ended) period, and may be full-time or part-time, or with a trial (probation) period.

For more information on the detailed nature of contracts in Turkey, you can refer to this comprehensive guide by the Istanbul Law Office.

Termination of Employment Contract in Turkey

Termination of an employment contract in Turkey can occur due to various reasons, either from the employer or the employee. Generally, the methods of contract termination are as follows:

  1. Mutual Consent: Both parties agree to end the contract.
  2. Expiry of Contract: For contracts with a definite duration, the contract terminates once the duration expires.
  3. Termination by Notice: Either party can terminate an indefinite-term contract by giving the other party a notice. This is often referred to as ‘ordinary termination’.
  4. Termination for Just Cause: Either party can terminate the contract immediately for a valid reason, without needing to provide any notice. This is often referred to as ‘extraordinary termination’.

Further understanding of these methods of termination can be obtained from this resource provided by the Istanbul Law Office.

Ordinary Termination of Employment Contract

Ordinary termination refers to the termination of an employment contract by giving a notice to the other party. This form of termination is only applicable for contracts with an indefinite term. The notice periods, as per the Turkish Labour Code, are as follows:

  • For employees who have worked for less than six months, the notice period is two weeks.
  • For employees who have worked between six months and 18 months, the notice period is four weeks.
  • For employees who have worked between 18 months and three years, the notice period is six weeks.
  • For employees who have worked for more than three years, the notice period is eight weeks.

In case the employer does not wish to provide a notice, they can opt for termination by paying the wage corresponding to the employee’s notice period, also known as ‘payment in lieu of notice’.

Extraordinary Termination of Employment Contract

Extraordinary termination refers to the immediate termination of a contract due to a just cause. Just causes for termination are usually related to the employee’s behaviour or the operational requirements of the workplace. They are generally classified into four categories:

  1. Health Reasons: If the employee’s health condition prevents them from fulfilling their job duties.
  2. Moral or Good Faith Violations: If the employee engages in behaviours that breach moral principles or good faith.
  3. Force Majeure: If circumstances beyond the control of the parties (natural disasters, wars, etc.) prevent the employee from performing their duties for more than a week.
  4. Detention or Apprehension: If the employee’s absence due to detention or arrest exceeds the notice period.

In such cases, the employer does not need to provide a notice or severance pay.

Termination of Contract Without Compensation

The possibility of terminating a contract without compensation is contingent on the circumstances leading to the termination. It is important that employers understand the legal framework governing these situations to avoid legal disputes and potential liabilities.

Termination without Just Cause

If an employer terminates a contract without a just cause and without observing the stipulated notice period, they are liable to pay a ‘notice compensation’ to the employee. This compensation equals the wages that the employee should have received during the notice period.

If the employment contract is terminated in bad faith (for instance, solely to avoid paying certain employee benefits or because of the employee’s involvement with a labour union), the employer may be held liable for a ‘bad-faith compensation’. This compensation equals three times the amount pertaining to the notice period.

Termination with Just Cause

If an employer terminates a contract with a just cause and without providing any notice, they are not obligated to pay any compensation. However, if the alleged just cause for termination is proven to be invalid or non-existent, the employer may be held liable for compensation.

This compensation can include payment for the notice period, reinstatement compensation (if the court rules that the termination was unjustified), and severance pay (if the employee has worked for at least one year).

Legal Regulations Related to Contract Termination

Contract termination in Turkey is governed by several legal codes and regulations. Some of these include:

  • Law No. 4721: This law regulates civil and private law matters, including contracts.
  • Law No. 6098: Known as the Turkish Code of Obligations, this law governs all kinds of contractual relationships, including employment contracts.
  • Law No. 6100: This law, known as the Code of Civil Procedure, regulates procedures for civil lawsuits, including those related to contract termination.
  • Law No. 6102: This is the Turkish Commercial Code, which regulates commercial transactions and relationships, including commercial contracts.

Legal Assistance for Contract Termination

Contract terminations, especially those without compensation, can be complex and fraught with legal intricacies. It’s crucial to seek the services of a professional contract lawyer who can navigate the legal landscape and provide expert advice. The team at the Istanbul Law Office offers excellent services in this regard.

With a team of English and Turkish-speaking attorneys, they are well-versed in Turkish employment law and can assist with all aspects of contract termination. Their services include contract drafting and review, dispute resolution, and legal representation in court cases related to contract termination.

Frequently Asked Questions

Q: What is a just cause for contract termination in Turkey?

A: According to Turkish law, just causes for contract termination include health reasons, violation of moral principles or good faith, force majeure situations, and the employee’s detention or arrest.

Q: What is the notice period for contract termination in Turkey?

A: The notice period varies depending on the length of employment, ranging from two weeks for employment of less than six months to eight weeks for employment of more than three years.

Q: Can an employer terminate a contract without compensation?

A: Yes, if the contract is terminated for a just cause and without providing a notice, the employer is not obligated to pay any compensation. However, if the alleged just cause is proven invalid, the employer may be liable for compensation.

Q: Is it necessary to have a contract lawyer for contract termination in Turkey?

A: While not mandatory, it’s highly recommended to have professional legal assistance when dealing with contract termination in Turkey. This ensures you navigate the legal procedures correctly and protect your interests.

Q: How can the Istanbul Law Office help with contract termination?

A: The Istanbul Law Office provides a wide range of services related to contract termination, including contract review, dispute resolution, and legal representation in court cases. Their team of English and Turkish-speaking attorneys are well-versed in Turkish employment law and can provide expert advice and assistance.

Conclusion

Terminating a contract without compensation in Turkey can be a complex process, governed by various laws and regulations. It is a sensitive issue that requires careful handling to avoid potential legal disputes and liabilities. Whether you’re an employer looking to terminate a contract or an employee facing a termination, it’s crucial to understand the legal implications of your actions.

At Istanbul Law Office, our team of skilled attorneys is well-versed in Turkish employment laws and can guide you through each step of the contract termination process. We offer a range of professional services, from contract review and dispute resolution to legal representation in court cases. With our help, you can navigate the complexities of contract termination with confidence and ease.

For more information or to schedule a consultation, please contact us. Our team is ready to assist you with all your legal needs related to contract termination.