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Labor and employment law challenges in business transformations

Turkey

Workforce restructuring

The key practical issues in workforce restructuring include:

  • Legal justification
  • Works council and employee representatives’ process
  • Labor administration process
  • Costs and timing
  • Litigation risk

Applicable legislation

Collective redundancies are governed by Art. 29 of Turkish Labor Law No. 4857 (TLL). Collective redundancy provisions are triggered when dismissals occur in accordance with Art. 17 of TLL on the same date or at different dates within one month in the following manner:

  • At least 10 employees in establishments with 20-100 employees
  • At least 10% of employees in establishments with 101-300 employees
  • At least 30 employees in establishments with 301 or more employees

Required legal justification

Collective redundancy must be justified by:

  • Economic reasons
  • Technological reasons
  • Structural reasons or reasons of similar nature

The grounds must be necessitated by the requirements of the company, the establishment or activity.

Works council/unions or other employee consultation requirements

Consultation requirements with works council/unions

Unions: The employer must inform the union representatives with written notification at least 30 days prior to the intended redundancies. There is no specific documentation legally required; however, the written notification must include:

  • Reason for the contemplated redundancies
  • Number and groups of employees affected by the redundancies
  • Time duration required for implementing redundancy

The employer is legally required to consult with the union representatives in order to avert or to reduce the number of terminations as well as work on measures to mitigate or limit their adverse effects on the workers concerned. The consultation process must be documented; however, the proposals of the union representative are not binding on the employer.

Consultation requirements with other employee representatives

There are no other consultation requirements with other employee representatives.

Consultation requirements with employees

There is no consultation requirement with the employees; however, the employer can directly communicate with the impacted employees regarding the intended redundancies if no trade union or work council has been formed within the company.

Approval/notification of the labor authorities or other government authorities

Approval of the labor authorities or other government authorities is not required to implement the collective redundancy; however, the employer is legally required to submit written notification to the relevant Regional Directorate of Labor and the Public Employment Office at least 30 days prior to the intended redundancies. The employer is not legally required to prepare specific documentation for the authorities unless otherwise specified by the relevant authority.

The notices of termination will take effect only after 30 days of notification to the Regional Directorate of Labor concerning the intended redundancies.

Employee selection criteria

The employer is free to choose the employee to be redundant; however, there must be a valid legal reason (e.g., based on the capacity or the conduct of the employee, or based on the operational requirements of the establishment or service) for such employee to be chosen to be made redundant in accordance with the general provisions of Turkish Labor Law.

Actions required to limit the negative impact and social plan

The employer is legally required to consult with the union representatives in order to avert or to reduce the number of terminations as well as work on measures to mitigate or limit their adverse effects on the workers concerned. The consultation process must be documented; however, the proposals of the union representatives are not binding on the employer.

Internal alternative employment/redeployment
There is no obligation to offer alternative employment or redeployment under Turkish law.

Other measures
There is no obligation to offer other measures under Turkish law.

Estimated timeline

Negotiation between the union representatives and the employer may take about a month. Notices of termination will only take effect after 30 days of notification to the Regional Directorate of Labor concerning the intended redundancies by the employer.

In the event of closing the entire establishment, which involves a definite and permanent shut down of activities, the employer shall notify, at least 30 days prior to the intended closure, the Regional Directorate of Labor and the Public Employment Office and shall post the relevant announcement at the establishment.

Estimated costs

Mandatory costs

There are no mandatory costs for employers in Turkey.

Customary additional costs

There are no customary additional costs for employers in Turkey.

Hiring restrictions post-redundancy

There are no hiring restrictions or “freeze period” applicable post-redundancy. Furthermore, there is no rehiring obligation with regard to the terminated employees when implementing a collective redundancy.

However, if the employer wants to employ workers for similar jobs within six months from the finalization of the collective dismissal, redundant employees have priority for reemployment (with the same working conditions as before) only if the employer intends to reemploy a redundant employee. This right of priority is not mandatory but optional for the employer.

Litigation risk

Interested parties

Only an impacted employee (an employee who was made redundant) can bring a lawsuit against the employer within one month from the date of his or her termination. Further, litigation cannot stop or slow down the collective redundancy process.

Damages and other remedies

Damages for unfair dismissal

The court may award damages for dismissals due to invalid reasons (i.e., without legal justification), and the amount of damages awarded differs from case to case.

Reinstatement

A reemployment lawsuit may be initiated by the impacted former employees within 30 days from the date of issue of notice of termination by the employer. If the claim is successful, the employer is under the obligation to reemploy the employee. If the employer does not reemploy the impacted former employee, the employee shall be compensated for the damages with at least four months’ gross salary or a maximum of eight months’ gross salary.

Criminal sanctions

There are no criminal sanctions against the employer.

Country-specific issues

There are no other key legal issues specific to Turkey.

Contact

Primary Contact for Turkey Labor and Employment Law

Mehmet Kucukkaya
Mehmet Kucukkaya & Yusuf Gokhan Penezoglu Avukatlik Ortakligi
+902124085724

Global Labor and Employment Law Guide
Workforce restructuring
2016-07-01
Turkey
TR

Contacts