1.Definition of Employment Contracts
An employment contract is a contract in which one party (“employee”) undertakes to perform work dependently while other party (“employer”) undertakes to pay salary in return of the works performed. The Employment Agreement has stipulated in Labor Law numbered 4857 and Code of Obligations numbered 6098. The main obligation of the employee is to perform work, while the main obligation of the employer is paying salary. As a rule the employment contracts can be executed in any form and they do not have to be in written form. However, in terms of the claims to be provable it is always suggested to execute the employment agreement in written.
2.Main Types of Employment Contracts
Turkish Labor Code article 11/1 defines the definite & indefinite-term contracts “An employment contract is deemed to have been made for an indefinite period where the employment relationship is not based on a fixed term. An employment contract for a definite period is one that is concluded between the employer and the employee in written form, which has a specified term or which is based on the emergence of objective conditions like the completion of a certain work or the materialisation of a certain event.”
a.Definite Term Contracts
TLC article 11/2:“An employment contract for a definite period must not be concluded more than once, except when there is an essential reason which may necessitate repeated (chain) contracts. Otherwise, the employment contract is deemed to have been made for an indefinite period from the very beginning.”
TLC 11/3: “Chain contracts based on essential reasons shall maintain their status as contracts made for a definite period.”
It should also be stated that Definite Term Contracts are applied exceptionally in Turkish Law. According to the general principle, employment contracts shall be concluded for indefinite term. Definite term contracts can be used only if the objective conditions are fulfilled.
The objective conditions: Objective conditions mean to engage the term of the contract with a type of work which will be completed in a certain time period due to its nature such as; completion of plastering work, completion of a project etc.
In accordance with the precedent of Court of Cassation, a definite-term employment contract concluded without the presence of an objective condition is accepted as indefinite-term and the employee cannot demand remaining duration receivables.
The definite term employment contracts finish automatically when the duration/term determined in the contract expired without needing a cancellation declaration/ termination notification by the parties.
b.Indefinite Term Contracts
According to Article 11 of Turkish Labor Code (TLC) an employment contract is deemed to have been made for an indefinite period where the employment relationship is not based on a fixed term. An indefinite-term employment contract entails rights such as the reinstatement claim, assurance compensation, notice compensation and severance pay.
Severance Pay: Severance pay is a type of compensation in which the employee is entitled to an average of thirty days gross wage for each years of seniority in the event of termination of employment without just cause or termination.
As it is accepted, the worker who resigns voluntarily cannot be entitled to demand severance pay. However, if the worker resigned because of obligatory military duty, obtaining the right to retirement, documenting that health problems constitute a constant obstacle to the performance of the job, the employer’s goodwill and ethics rules in case of termination by the employee due to termination (resignation), with the condition that the working period is at least 1 year, then this worker is entitled for severance compensation.
Notice Pay: According to the Article 17 of the Turkish Labor Code (TLC), the situation (termination) must be notified to the other party before terminating indefinite term employment contracts within the determined periods (2 weeks for employees less than 6 months / 4 weeks for employees from 6 months to 1,5 years / 6 weeks for employees from 1.5 to 3 years / 8 weeks for employees over 3 years) These pre-determined durations may be extended by the employment contract.
The party not complying with the notification requirement shall pay compensation (which is called notice pay) for the notification period.
3. Preparation of Employment Contracts
The preparation of employment contracts involves several key steps to ensure legal compliance and clarity for both parties involved. These steps typically include:
- Identifying Parties: Clearly identify the employer and the employee, including their official names, addresses, and any other relevant identifying information.
- Defining Terms: Clearly define the terms of employment, including the job title, duties, responsibilities, and any specific conditions or requirements related to the position.
- Stating Compensation: Specify the salary or wages to be paid to the employee, along with any additional benefits or compensation, such as bonuses, commissions, or allowances.
- Determining Working Hours: Outline the expected working hours, including any provisions for overtime, breaks, or shift work.
- Addressing Duration: Specify whether the employment is for a fixed term or an indefinite period. If it’s a fixed-term contract, include the duration of the contract and any provisions for renewal or termination.
- Including Termination Clauses: Clearly outline the conditions and procedures for terminating the employment contract, including notice periods, grounds for termination, and any severance pay or benefits.
- Compliance with Laws: Ensure that the employment contract complies with all relevant labor laws, regulations, and industry standards. This may include provisions related to minimum wage requirements, working conditions, health and safety regulations, and non-discrimination policies.
- Language and Format: According to the law, the use of the Turkish language is mandatory in commercial relations; therefore, if commercial organizations are located in Turkey and the contracts are to be applied in Turkey, employment contracts must be prepared in Turkish. In some cases, translations may be necessary if the contract will be used in a bilingual or multilingual environment.
- Review and Approval: Review the contract carefully to ensure accuracy, completeness, and clarity. Seek legal advice or consultation if needed to address any complex legal issues or ensure compliance with local regulations.
- Signing and Execution: Once the contract has been finalized and approved by both parties, it should be signed and dated by the employer and the employee to indicate their agreement to the terms and conditions outlined in the contract.
By following these steps and ensuring thoroughness and clarity in the drafting process, employers can create employment contracts that provide clear expectations and protections for both themselves and their employees.
