Terminating an employment contract is a significant event for both employers and employees. In Turkey, like in many countries, there are specific laws and regulations governing the termination of employment contracts. Understanding these rules is crucial to ensure a fair and lawful termination process.
In this article, we will delve into the termination of employment contracts in Turkey, examining the legal framework, reasons for termination, and the procedures involved.
The legal framework governing the termination of employment contracts in Turkey primarily consists of the Turkish Labor Law (No. 4857), which was enacted in 2003. This law outlines the rights and responsibilities of both employers and employees and sets the rules for employment termination. Additionally, collective bargaining agreements, individual employment contracts, and internal workplace regulations may further specify the terms of termination.
Reasons for Termination of employment contract in Turkey
In Turkey, employment contracts can be terminated for various reasons, which can be broadly categorized into two types: with just cause (for-cause termination) and without just cause (no-cause termination).
1. Termination with Just Cause
If an employee engages in misconduct, such as theft, fraud, insubordination, or harassment, the employer can terminate the employment contract with just cause. However, the employer must follow due process, such as providing written warnings and conducting a fair investigation.
If an employee consistently fails to meet their job requirements or lacks the necessary skills, the employer may terminate the contract with just cause.
In cases of prolonged illness or disability that renders the employee unable to perform their duties, the employer may terminate the contract. However, this requires medical documentation and adherence to specific procedures.
If an employee breaches the terms of the employment contract, such as disclosing trade secrets or competing with the employer, the employer can terminate the contract with just cause.
2. Termination without Just Cause
Employers may terminate employment contracts without just cause due to reasons related to the business, such as downsizing, economic difficulties, or the closure of the company. In such cases, employees are entitled to severance pay and other benefits as prescribed by law.
Employers and employees can mutually agree to terminate the contract without just cause. This often involves negotiations on the terms of termination, including compensation and notice periods.
Fixed-term employment contracts end automatically upon the expiration of the agreed-upon term, without the need for just cause. However, employees are still entitled to receive their contractual benefits upon termination.
The termination procedures in Turkey are defined by law and must be followed carefully to avoid legal disputes.
a. Written Notice: Employers must provide written notice of termination to the employee, specifying the reason for termination and the notice period. The notice period varies depending on the length of service, typically ranging from two to eight weeks.
b. Termination Letter: The employer should issue a formal termination letter that includes details about the notice period, last working day, and any applicable severance pay.
a. Severance pay is mandatory for employees terminated without just cause or due to business necessity. The amount of severance pay is calculated based on the employee’s length of service and last gross monthly salary.
b. Employers are also required to pay any accrued but unused annual leave, overtime, and other entitlements.
Employers are encouraged to conduct a termination meeting with the employee to explain the reasons for termination and discuss any outstanding matters, such as returning company property or settling outstanding dues.
Employees must return any company property, access cards, and confidential information upon termination.
In cases where employees dispute the termination or believe it was unjust, they may file a lawsuit to challenge the decision. Turkish labor courts will review such cases and make a determination based on the evidence presented.
Terminating an employment contract in Turkey involves a structured and legally regulated process. Employers and employees must be aware of their rights and responsibilities under Turkish labor law to ensure a fair and lawful termination. While termination with just cause and without just cause are both permissible under the law, employers must follow the proper procedures, including providing written notice, calculating severance pay, and adhering to the notice period. When handled correctly, termination can be a smoother process that minimizes legal risks and ensures the rights of both parties are protected.