- May 17, 2023
- Posted by: admin
- Category: Blog
Before establishing their company in Turkey, foreign entrepreneurs should know about labor law in Turkey and other employment regulations . The most important of all is labor law and employment regulations in Turkey.
In recent years, Turkey has been an attractive location to establish companies for foreign investors. Its geographical location and potential economic growth have made it a suitable investment destination for foreign entrepreneurs. However, to select a company in Turkey, you’ll need to know about its labor law in Turkey and employment regulations.
This post shall give you an in-depth insight into the employment regulations in Turkey:
Employer Obligations vs. Employee Obligations
Labor Law in Turkey, The Turkish Labor Code, Act No. 4857, was enacted in 2003. The primary purpose of this act is to control the work conditions and work-related rights and obligations of employers and employees. The Labor Law in Turkey prohibits discrimination of any sort.
In Turkey, the wage of the employee is one of the main conditions of the labor contract. Therefore, please be careful on determining the wage. It is the duty of the employer to care for their employees’ well-being. The Turkish Labor Law provides just causes for the employer and employee to exercise their rights.
The Labor Law in Turkey doesn’t differentiate between blue-collar and white-collar workers. The Labor Law in Turkey doesn’t define the worker categories. Usually, the law categories based upon the employment contracts like:
- full time
- Provisional contracts
Moreover, there isn’t any legal restriction on the employment contract’s duration in Labor law of Turkey . The agreement can be activated for an indefinite time period. However, then, fixed-term employment contracts can only be renewed once.
In addition, the duty of loyalty includes obligations during the term of employment. According to the contract, an employee is held personally liable to perform their work and it is necessary to understand that no one is going to perform their work for them. An employee must display utmost diligence and obey the employer’s instructions within the agreed scope of work. An employee must work for the benefit of the employer and must do everything to avoid any behavior that may harm the employer professionally, commercially, and economically. This loyalty must boil down to not doing anything that will be in competition with the employer’s business.
The non-competition obligation doesn’t survive any worker’s termination. When a worker wants to extend their obligation with the acceptance of their employee, they end in a non-competition agreement.
As stated by the Turkish Labor Law, Act No. 4857, the wages can be only paid in Turkish Lira. Most businesses deposit the wage into a specially opened bank account. The employers should pay wages monthly. But the time duration of paying wages can be decreased by one week with the help of the employment contract. The minimum wage in Turkey is not based on an hourly rate. The gross monthly income of an employee in Turkey is 10.008 Turkish Lira. After the deduction of tax and insurance, the employees will roughly receive 8.506 Liras. The government authorities set the minimum wages for most companies, and they do so after every two years.
Regulations Associated with the Workplace
The Turkey Labor Act No. 4857 which has important role on labor law of Turkey, aims to control the working conditions and work-related rights of companies and employees. A working week in Turkey comprises a maximum of 45 hours. The weekly average working period may be distributed unevenly for the total number of working days in a month. It must also notify the same department every time it employs a new hire. If under any circumstances, the place of business gets transferred or closed down, the Ministry of Labor needs to be informed of that as well. When the employer confers a few benefits to employees, it’s the workplace practice. When something beneficial to the employees is given continuously, it becomes that. With the mutual agreement of the employers and employees, the daily working period shall not exceed 11 hours. The employees in Turkey are also entitled to receive bonuses.
The Employer Contracts
As an employer, you should know about your responsibilities and regulations. Your efforts for company establishment in Turkey will be much easier by learning about employer contracts. Foreign entrepreneurs should use one of these types of employment contracts for their workers.
- Definite or indefinite time duration
- team contract
- full-time or part-time
- Temporary or permanent work
- Commencing with a trial period
Note that for these types of contracts, you don’t have to pay fees or duties. Every foreign entrepreneur has to submit a written document that includes the following types of employment terms.
- Basic salary
- working hours
- Salary additions
- payment periodicity
- term of contract
- Termination provisions and more
Employees who have worked at your company for a year should be granted annual leave. Benefits like health insurance, lunch, etc., can be granted via the employment contract. Regarding remote work, the general rule is that employees must perform their official duty in an employer’s workplace.
But the employee and employer might designate a certain lace outside the workplace to perform the work. Based on their work specifics, the employee can work remotely (work from home) . Note that one can establish a remote employment location under the written contract. Foreigners get four types of work permits: limited-term permit, unlimited-term permit, permit for independent work, and turquoise permit.
The Termination Laws Governing the Employees in Turkey
The employees are a crucial component of your company’s success. That’s why, you should know about the rules and regulations governing the employees in Turkey.
In Turkish Labor Law, employers should be aware of the limitations. The Turkish Law considers two types of dismissals for employees as follows:
It is the type of termination where the security provisions involving employment apply to the dismissed employee. The employment security provisions should be applicable to a worker if:
- The employer has a minimum workforce strength of 30 employees
- The terminated employee has been employed by the employer for at least six months
Some of the common reasons to terminate an employee are as follows.
- The employee can’t perform the assigned duties
- Workplace Necessity
Note that where the conditions for employment security aren’t applicable, as an employer, you don’t need an ordinary termination.
Under this regulation, Turkish law provides employers the right to dismiss an employee. As an employer, you don’t have to comply with any notification period in the presence of just reasons.
Moreover, Turkish Law doesn’t offer a detailed list of justified reasons for extraordinary employee termination. However, the law includes the following grounds under which you can terminate an employee extraordinarily.
- Health reasons
- The acts of the employee breaching moral principles
- Apprehension or detention of the employee
Except for termination with justified reasons, the employee and the employer should offer notice when terminating the contract. During an immediate termination with justified cause due to misconduct of the employees, the employer isn’t entitled to pay. Open-ended contracts are the predominant type of employment relationship in Turkey.
The Termination of Employee for a Justified Reason
Employers over a certain threshold, ie, not employing less than thirty employees, can terminate the employment on a reasonable cause. But for that to happen, the contract should be open-ended. Furthermore, the employee should complete a minimum of six months of service.
On the employee’s part, the reasonable cause stems from their inadequacy. For instance, underperformance, aggression, and lack of harmony can contribute to the inadequacy of the employees.
On the employer’s part, the justified reason emanates due to workplace necessities. Technological upgrades, economic hardship, and shutdown of the workplace can be good instances for valid causes. If you are terminating employees without cause, you should notify the workers in writing. The letter should mention the reasons for the termination.
In cases, where the employment is to be terminated for the employee’s attitude, the employee should be provided with a warning letter. And before terminating, you should initiate the written defense from the employee.
Things to Learn about Mutual Termination
Based on mutual understanding, employers and employees are free to terminate their relationship at any time. It is a practice among Turkish employers to draft a rescision protocol that contains the following aspects.
- Employee’s time of departure
- Contractual compensation
- Non-competitive obligations
Within a month of the termination, the employee can file a lawsuit against the employer for unjust termination.
The Subcontracting Laws
The Turkish Labor Law allows for the subcontracting of employees from other employers at the workplace. Subcontracted work should be conducted at the employer’s workplace. Such subcontracted work must only be performed at the workplace provided by the employer. There is strict regulation on what kind of work can be subcontracted. It can only be supplementary work or any specific part of the primary work which has to be done at the workplace provided by the employer. A subcontractor can be referred to as a firm or an individual who performs another company’s work based on contracts. In Turkey, the subcontracting laws aim to prevent collusion. In a collusive act, the subcontracting employees should be treated as the primary employees. The subcontractor regulation in Turkey defines collusive actions as follows:
- Assigning the principal work that doesn’t need expertise
- Subcontractor relationship with an ex-employee
- Agreements that contain transactions aimed at evading public assets
The Turkish Law also states that the main activity shall not be divided and assigned to subcontractors.
Regulations Governing the Employment of the Foreign Workers
Under Turkish Law, foreign employees of all nationalities should obtain a work permit. However, the legislation doesn’t offer a specific regime applicable to the employment of European and Swiss citizens. The work permit will also grant the holder the right to reside in Turkey.
Foreign employees wishing to reside in Turkey should obtain a separate residence permit. Furthermore, a foreign national can also receive a Turquoise Card. But this card is applicable only to highly skilled workers. Foreign citizens should have the same rights as the Turkish employers. Therefore, as an employer, you should know about the rights and duties of your overseas employees.
Aspects to Learn about the Union Laws
Note that Labor Unions are legal in Turkey. They have been present in the country since 1947. The Labor Laws affirm the right of workers to form unions. If your employees are a part of the union, you can’t terminate them.
Moreover, unions with a certain number of members can enter into collective bargaining. In these cases, the employers should enter into a cooperative agreement with the union. Before 2012, the union had to denote at least 10% of the total number of registered workers. However, the new Turkish Labor Laws have reduced this threshold to 1%.
The Temporary Employment Terms in Turkey
Under the Turkish Labor Laws, employment is defined as a relationship. It is referred to as a full-time basis for an indefinite term. Any other type of employment is exceptional and may be established only if specific requirements are complied with. The Turkish Labor Law states the following circumstances where temporary employment may be established between the employee and the organisation.
- Exception for Private Labor Agencies
Since 2016, the private labor firm and the employer should sign a temporary workforce sourcing agreement. The workers of the private labor firm should work for the employer under the regulations of the workforce procurement agreement. As an employer, you can benefit from this temporary employment to cover employees who’re on paid leaves.
- The Exceptions for Group Companies
A form of temporary employment may be formed within a group of agencies. However, this type of temporary employment can be developed for a maximum duration of six months. Moreover, it may be extended twice. But the employees should offer prior written consent.
Remote Employment in Turkey
Turkey is one of those countries that offer optimal working conditions for remote workers. Even if there is no specific program, foreign workers can apply for a Turkish e-visa and reside in Turkey for three years.
However, if the stay gets extended, they will need a residence permit. In Turkey, remote working practices weren’t regulated.
But, recently, Labor Law No- 4857 was amended to introduce the scope of remote workers. Under the amended Labor Law, employers should sign a contract with their remote workers. The employment contract should comprise the finer details like the definition of the work and the type of work to be performed. Remote employees will have to be treated in the same manner as other employees.
Work Health and Safety Regulations
There is no one-size-fits-all approach when it comes to work health and safety. The regulation associated with the safety and health of workers was enacted in 2012. But note that this act varies based on the hazard level of work and the total number of employees. So, as an employer, you should take all essential health and safety measures to offer your employees access to a safe workplace. As an employer, you can take the following measures to ensure the safety of your workers.
- Recruiting medical personnel to monitor the health of your workers
- Maintaining the workplace health and safety logs
Conducting awareness programs on health and safety
Recruiting Foreigners in Labor Law of Turkey
You have the free hand to recruit foreign employees in various categories in your company. But it is necessary to comply with the International Workplace Law, 2016. In the country, a foreigner may either work as a freelancer or may work under an employment after they can obtain a work permit. There are some countries whose nationals may work in Turkey without a work permit as facilitated by various bilateral and multilateral agreements.
It is important to note that previously Turkish employers are required to prioritize employing Turkish nationals for any and all job openings and justification has to be provided if you want to hire a foreign national instead. But after the enactment of the International Workplace Law, foreigners can be hired without the prioritization rule.
Labor law of Turkey gives out 4 types of work permits to foreigners to work in the country:
- limited term permit
- Unlimited term permit
- Permit for independent work
- turquoise permit
Foreign investors establishing companies in Turkey can hire foreign nationals in their companies. However, you should be aware of the intricacies associated with the hiring process. Every foreign citizen in Turkey needs to obtain a work permit to work in Turkey.
They can obtain this permit from the Turkish Ministry of Labor. Overseas employees should also need to get working visas and residence permits. The Turkish Labor Ministry will provide your work permit within 15 days after you send the application. You can only apply for a working visa when you have a work permit. The residence permit for foreign workers is issued by the Ministry of Internal Affairs.
Establishing a company in Turkey and being aware of the Labor Laws may be challenging for a foreign investor. If you are a foreign investor looking forward to setting up a Turkish company, consult with a Foreign Operation Consultancy .