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Legalixa is an award-winning immigration law firm in Istanbul, Turkey with an exceptional success rate in almost every legal matter we have ever handled. How to Terminate Employment Contracts in Turkey? Our Turkish employment lawyers are prepared to handle your labor & employment law needs in Turkey especially termination of employment contracts in Turkey.
Legalixa Turkish employment lawyers represent employers in connection with virtually every aspect of the employment relationship. Legalixa Law Firm attorneys regularly represent both public and private-sector employers, both unionized and union-free, in administrative proceedings, arbitration, and litigation before Turkish Employment Courts.
How to Terminate Employment Contracts in Turkey?
Termination With Valid Reasons: We always recommend our clients specify valid reasons while terminating employment contracts because an employee whose employment contract was terminated can file;
- a reinstatement claim or
- a compensation claim for bad faith damages.
According to Article 18 of the Turkish Labor Act, the employer, who terminates the contract of an employee engaged for an indefinite period, who is employed in an establishment with thirty or more workers and who meets minimum seniority of six months, must depend on a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the establishment or service.
- Reinstatement claims can only be filed against a Company that employs 30 or more than 30 employees and by employees that have at least 6 months of length of service.
- In cases where employment contracts of employees -who fall outside the scope of Article 18, (e.g. if there are less than 30 people employed in the Company)- are terminated by the employer, the employee will be able to file a lawsuit demanding compensation which amounts to three times the worker’s salary of the notice period claiming that the employer has terminated the contract with bad faith. To prevent such a lawsuit, an employer should specify a valid reason for terminating an employment contract.
Market stagnation, market share loss, raw material shortage, decrease in sales possibilities, the decline in sale resources, implementation of new technologies, close down of several departments, etc. can be deemed as valid reasons for termination based on the operational requirements of the management, establishment or service.
Notice Period and Notice Pay
Before terminating a continual employment contract made for an indefinite period, a notice to the other party must be served by the terminating party. The contract shall then terminate:
- 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;
- 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;
- 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;
- 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. You can choose to ignore the notice period. 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. Please note that, while calculating the notice pay, gross salary with material benefits that are provided to the employee regularly shall be taken into account.
Upon termination of the employment contract on grounds other than stated in Article 25 (termination of the contract by the employer with rightful reasons) of the 4857 numbered Labor Act, the employee becomes entitled to severance pay.
In case any labor contract is terminated for a reason that qualifies for severance pay, severance pay amounting to gross wages of 30 days for every full year of employment will be granted. For periods of more than one year, this will be proportioned and included in the calculation.
Along with wages paid to the employee, severance pay calculations take into account the gross amounts of all money and material benefits that are provided regularly (travel allowance, food allowance, condition of regularity, bonus payments, etc.). The amount of severance pay paid for each full year of employment is limited by a severance pay upper limit in effect on the date of termination.
While terminating an employment contract annual leave and overtime work of an employee (the first 270 hours of overtime work are included in the salary) shall also be paid by the employer.
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Since its foundation, Legalixa Law Firm has been the choice of numerous clients in Turkey. We’ve always worked differently than other law firms. We are committed to remaining forward-thinking and preparing for the dynamically changing world of employment law.