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Turkish Labour Law

Understanding Labor Law in Turkey: A Guide for Foreign Investors

Turkey’s dynamic economy, strategic location, and skilled workforce make it an attractive destination for foreign investment. However, to successfully navigate the Turkish business landscape, foreign investors must understand the country’s labor laws. These laws regulate employer-employee relationships, outline the rights and obligations of both parties, and establish the legal framework for employment in Turkey. This article provides an overview of Turkey’s labor law, including key provisions, employer responsibilities, employee rights, and practical advice for foreign investors.

Overview of Turkey’s Labor Law Framework

Turkey’s primary labor law is the Labor Act No. 4857, which governs employment relationships in the private sector. This law applies to all employees and employers, with a few exceptions, such as maritime and agricultural workers, who are covered by specific regulations. The Labor Act sets out the fundamental principles of employment, including the establishment of employment contracts, working hours, wages, termination procedures, and workplace safety.

In addition to the Labor Act, several other laws and regulations influence employment in Turkey, including the Social Insurance and General Health Insurance Law No. 5510, the Occupational Health and Safety Law No. 6331, and the Trade Unions and Collective Bargaining Law No. 6356. Together, these laws create a comprehensive legal framework that foreign investors must understand and comply with when operating in Turkey.

Employment Contracts

In Turkey, employment contracts are the foundation of the employer-employee relationship. These contracts can be either fixed-term or indefinite-term, and they must be established in writing if the employment relationship exceeds one year. The contract should outline the key terms of employment, including the job description, salary, working hours, and any specific conditions agreed upon by both parties.

Fixed-term contracts are typically used for temporary or project-based work and automatically terminate at the end of the agreed period. Indefinite-term contracts, on the other hand, continue until terminated by either party. It’s important for foreign investors to ensure that employment contracts are carefully drafted to comply with Turkish labor law, as poorly written contracts can lead to legal disputes and financial liabilities.

Working Hours and Overtime

The standard working week in Turkey is 45 hours, typically spread over six days, with a maximum of 11 hours per day. Employers have the flexibility to adjust working hours as long as the total does not exceed this limit. Any work performed beyond the standard 45 hours is considered overtime.

Overtime is compensated at a rate of 150% of the employee’s regular hourly wage. Employees may be asked to work overtime only if they consent, and there is a legal limit of 270 hours of overtime per year. For certain sectors or job types, these limits may differ, so foreign investors should verify the specific requirements for their industry.

Night work, defined as work performed between 8:00 PM and 6:00 AM, has special regulations, including a maximum of 7.5 hours per night unless otherwise agreed upon.

Wages and Benefits

Turkey’s labor law mandates that employees be paid at least the national minimum wage, which is determined by the government and adjusted annually. The minimum wage applies to all employees, regardless of their nationality or sector. Foreign investors should be aware of these wage requirements to avoid legal penalties and ensure fair treatment of their workforce.

In addition to wages, employers are required to provide certain benefits, including:

  1. Social Security Contributions: Employers must register their employees with the Social Security Institution (SGK) and contribute to the employee’s social security, which covers health insurance, pensions, and unemployment benefits.
  2. Paid Leave: Employees are entitled to paid leave, including annual leave, sick leave, maternity leave, and public holidays. The amount of annual leave varies based on the employee’s length of service, ranging from 14 to 26 days.
  3. Severance Pay: Employees who have worked for at least one year are entitled to severance pay if their employment is terminated by the employer without just cause. Severance pay is calculated based on the employee’s length of service and their last received salary.

Termination of Employment

Termination of employment in Turkey is a regulated process that requires employers to adhere to specific legal procedures. There are two main types of termination: termination with just cause and termination without just cause.

  1. Termination with Just Cause: Employers can terminate an employee for just cause without providing notice or severance pay. Just cause includes serious misconduct, theft, gross negligence, or repeated failure to perform duties. However, the employer must document the reasons for termination and provide evidence if the case is disputed.
  2. Termination without Just Cause: If an employer wishes to terminate an employee without just cause, they must provide advance notice based on the employee’s length of service (ranging from 2 to 8 weeks) and pay severance. Failure to follow these procedures can result in legal action by the employee, including claims for unfair dismissal.

Employees also have the right to resign, either with or without just cause. In cases of resignation with just cause, employees may be entitled to severance pay.

Occupational Health and Safety

Turkey places a strong emphasis on occupational health and safety (OHS), with strict regulations designed to protect employees in the workplace. The Occupational Health and Safety Law No. 6331 requires employers to take all necessary measures to ensure a safe working environment. This includes:

  1. Risk Assessments: Employers must conduct regular risk assessments to identify potential hazards and implement preventive measures.
  2. Training: Employees must receive training on workplace safety, including how to handle equipment, emergency procedures, and how to report hazards.
  3. Health Checks: Employers are required to provide regular health checks for employees, especially those working in hazardous conditions.
  4. Accident Reporting: Any workplace accidents must be reported to the authorities, and employers must take steps to prevent similar incidents in the future.

Non-compliance with OHS regulations can result in severe penalties, including fines, business closures, and criminal charges. Foreign investors should prioritize workplace safety to protect their employees and avoid legal repercussions.

Trade Unions and Collective Bargaining

Turkey recognizes the right of employees to join trade unions and engage in collective bargaining. The Trade Unions and Collective Bargaining Law No. 6356 establishes the framework for union activities, including the formation of unions, collective agreements, and the resolution of labor disputes.

Employees have the right to form and join unions of their choice without fear of discrimination or retaliation. Employers must respect these rights and engage in good-faith negotiations with unions when collective bargaining agreements are in place. Foreign investors should be aware of the role of trade unions in their industry and ensure compliance with collective bargaining agreements.

Practical Advice for Foreign Investors

Navigating Turkey’s labor laws can be complex, particularly for foreign investors unfamiliar with the local legal environment. Here are some practical tips:

  1. Engage Local Expertise: Hiring local legal and HR experts who understand Turkish labor law can help ensure compliance and prevent legal issues.
  2. Draft Comprehensive Contracts: Clearly define the terms of employment in contracts to avoid misunderstandings and disputes.
  3. Implement Compliance Programs: Regularly review and update HR policies to ensure they align with current labor laws and regulations.
  4. Prioritize Workplace Safety: Invest in occupational health and safety measures to protect employees and avoid penalties.
  5. Stay Informed on Legal Changes: Turkish labor laws are subject to change, so staying informed about updates and amendments is essential.

Conclusion

Understanding and complying with Turkey’s labor laws is crucial for foreign investors aiming to establish or expand their business in the country. From employment contracts and working hours to wages, termination, and workplace safety, these laws provide the framework for a fair and productive working environment. By engaging local expertise, prioritizing compliance, and respecting employee rights, foreign investors can navigate Turkey’s labor laws effectively and build successful, sustainable businesses in this dynamic market.

[OUR SERVICES] Navigate Turkish Labor Law with Expert Advisory Services

Compliance with Turkish labor law is crucial for foreign businesses to manage their workforce effectively while adhering to local regulations. Turkish labor laws cover essential areas such as employment contracts, payroll, social security, and employee rights. Our services provide foreign investors with the guidance needed to understand and implement labor law requirements, ensuring both compliance and workforce stability.

  • Advisory on structuring employment contracts to align with Turkish labor law standards and minimize legal risks
  • Assistance with payroll processing, social security registrations, and required contributions for employees
  • Guidance on employee rights, including working hours, leave entitlements, and termination procedures
  • Support with implementing internal policies that adhere to local labor regulations, such as health and safety requirements
  • Training for your HR and management team on key aspects of Turkish labor law to foster compliance and employee satisfaction

Contact us for comprehensive support in navigating Turkish labor regulations and creating a stable foundation for your team in Turkey.

FAQ

1. What are the main provisions of labor law in Turkey?

Turkey’s labor law governs the rights and obligations of employers and employees, covering areas such as employment contracts, working hours, wages, termination procedures, and social security. The law aims to protect workers’ rights while ensuring fair and balanced working conditions.

2. What are the standard working hours under Turkish labor law?

Under Turkish labor law, the standard working hours are 45 hours per week, typically spread over six days. Employers and employees can agree to different arrangements, but any hours worked beyond 45 hours per week are considered overtime and must be compensated accordingly.

3. What is the minimum wage in Turkey?

Minimum gross wage for 2024 is TL 20.002,50 in Turkey. The minimum wage in Turkey is set by the government and is subject to periodic review. Employers are legally required to pay at least the minimum wage to their employees. The amount may vary depending on factors such as age and sector.

4. How does termination of employment work under Turkish labor law?

Termination of employment in Turkey requires a valid reason, especially in cases of indefinite-term contracts. Employers must provide notice and severance pay based on the employee’s length of service. Unlawful termination can lead to compensation claims or reinstatement of the employee.

5. What are the rules for employing foreign workers in Turkey?

Employing foreign workers in Turkey requires a valid work permit. Employers must apply for the permit, and the foreign worker must meet specific criteria. The process is regulated by the International Workforce Law, ensuring that foreign workers have the same rights and protections as Turkish nationals.