As is known, for the termination of indefinite-term employment contracts by the employer, a valid reason has to be presented as determined in International Labour Organization (ILO)’s Convention No. 158.
In line with this international rule, what can and cannot be a valid reason is being regulated in the Turkish domestic legislation by the Article 18 of the Turkish Labour Code No. 4857. The employer who terminates the employment contract of an employee must base it on a valid reason arising from the employee’s competence or behaviour or the requirements of the enterprise, workplace or job in line with the aforementioned provision.
While the employee’s competence or behaviour constitutes the reasons related to the employee’s personality, the reasons arising from the requirements of the enterprise, workplace or job are directly related to the workplace.
The provisions of the law do not clearly state in which cases the reasons arising from the employee’s competence or behaviour will be considered as valid reasons and which situations will be accepted as reasons arising from the requirements of the enterprise, workplace or job.
Although valid reasons are not as important as termination for just cause, they are situations that negatively affect the normal functioning of the work and the workplace. In other words, while it is not possible to continue the employment contract in the case of justified termination, it is possible to talk about the negative effects of continuing the employment contract on production activities in terminations made for valid reasons.
Therefore, the reasons that may be in question for valid termination may be reasons that seriously negatively affect the employee’s obligation to work due to reasons originating from him/her or the workplace and prevent him/her from fulfilling his/her obligation to work properly.
As a result, in cases where the continuation of the employment relationship is important and cannot be expected within reasonable limits for the employer, it can be said that the termination is based on valid reasons.
At the same time, in terminations made for valid reasons, what is expected from the employer is to consider termination as the last resort. Therefore, while making an interpretation in accordance with the concept of valid reason, it should be investigated objectively whether there is a possibility to constantly avoid termination and keep the employee working in the workplace. The fact that the principle of “regarding termination being the last resort” is not clearly defined in the Turkish Labour Law, but it has become clear in practice over time via jurisdiction.
For instance, while it is not foreseen that any defence will be sought from employees in the event of termination due to problems experienced by the business, terminations for valid reasons in the event of economic downturn or changes in production models are subject to consistency control. Methods such as offering the employee another position and not applying overtime at the workplace after termination will lead to the conclusion that termination was considered as the last resort and that the needs related to termination were acted upon.
In the event of termination due to the employee’s performance or behaviour, a defence must be requested from employees within a reasonable period of time, the employee must be given time to correct his/her behaviour or performance, training must be provided if necessary, a position change must be offered and in other words, the principle of “termination being a last resort” must be ensured and the employer must do its best to ensure the continuation of the employment contract before terminating.
Job security provisions primarily require that the employer who terminates the indefinite term employment contract of an employee with at least six months of seniority in workplaces employing thirty or more workers must base the termination notice on a valid reason arising from the employee’s competence or behaviour or the requirements of the business, workplace or job, and must give written notice of termination.
Employer representatives who manage and govern the entirety of the business, their assistants and employer representatives who manage the entirety of the workplace are excluded from the scope of provisions of “job security” in line with the Code No. 4857.
A clarification has also been provided on how to calculate the 6-month seniority period required to fall within the scope of job security regulation, and it has been accepted that this period will be calculated by combining the periods spent in one or different workplaces of the same employer. On the other hand, if an employer has more than one workplace in the same sector, the total number of workers in these places will be taken into account in determining the number of workers working in the workplace.
The employer must give written notice of termination and clearly and precisely state the reason for termination and must definitely obtain the employee’s defence regarding the claims against him/her. In terminations based on behaviour and performance, failure to request a defence from the employee and failure to make the termination in writing without a clear reason will directly result in the termination being considered invalid in a probable lawsuit and the employee to be reinstated by the labour court.
An employee who will object to the termination must apply to a mediator within one month from the date of notification of the termination in accordance with the provisions of the Labor Courts Law. If an agreement cannot be reached during the mediation process, the employee can apply to the labour courts within two weeks.
As a result of the objection, due to the court decision ruling the termination of the employment contract as invalid, the employee’s entitlements were arranged by the employers in accordance with the Article 21 of the Turkish Labour Code No. 4857 due to the fact that the employee was not reinstated to work. In this regard, the procedures must be fulfilled to the Social Security Institution (SSI) in line with the Social Insurance and General Health Insurance Code No. 5510, the Social Insurance Procedures Regulation and the Employer Procedures Circular.
The regulation made in the Turkish Labour Law is only related to the calculation and determination of the idle time wage and non-reinitiation compensation by the court, and the salary calculations for severance pay, notice compensation and annual paid leave differences should continue to be made.
As a result of the reinstatement lawsuit, the employer is obliged to re-initiate the employee who applies to the employer within 10 days from the final court decision within one month if he/she is going to re-initiate the employee.
In other words, employers have two choices as a result of the reinstatement lawsuit: to re-initiate or not to re-initiate.
If the employee is not to be re-initiated, several compensation items emerge. These payments are “idle time payment”, “failing of re-initiation compensation”, “severance pay”, “notification compensation”, “severance and notice pay differences” and “annual leave payment and its difference”.
If the employee is reinstated, the idle time payment will be on the agenda. However, since the continuation of the employment contract is accepted and the first termination is eliminated; “failing of re-initiation compensation”, “severance-notification compensation/differences” related to termination and “annual leave payment/difference” will not be on the agenda.
