Executing Terminating Employment Contracts in Turkey
As Turkey maintains economic stability and growth for almost five years, the confidence of the foreign investors raised and new direct investments are executed more often. In this context employee related issues are of consideration to foreign investors and significance of the Turkish Labor Code (‘TLC’) elevate accordingly. Therefore we would like to briefly inform foreign investors regarding the precautions that shall be thought over while hiring and firing employees in Turkey.
First of all contract types specified in TLC must be considered. There are mainly four types of employee contracts subject to their terms. The first determination is for work less and more than 30 days but for a short and designated term anyway (continuous, discontinuous) and the second determination is for limited and unlimited duration types of contracts which are based on the designation of work period specifically for projects etc. or no designation. Please note that regular employee arrangements in Turkey are generally considered to be contracts for unlimited duration (all types of office staff, directors, managers etc.).
Execution of Employee Contracts
Execution of an employee contract (which is referred as a ‘Service Contract’ in Turkish law) is a simple task. For contracts that are for one year or more TLC states that the contract shall be in writing. The employer shall not postpone such execution of a contract more than two months after the initial commencement of the employee to work. Please also note that TLC allows for a maximum of two months of probationary period (test period) where the employee and/or the employer could terminate the relation without being subject to TLC’s termination clauses below explained. Employment contracts are free of any documentary taxes and levies such as stamp duties.
It should be noted that the terms and conditions of employee contracts are only applicable to the extent where they are in compatible with the irrevocable rights of the employees stated in TLC. Therefore employers are advised to obtain legal assistance before executing employment contracts in order to understand the actual effects of such contacts to their organizations.
Executing Terminating Employment Contracts in Turkey
