Business Starters’ Legal Kit Part 5: Employee Onboarding and Termination: Legal Procedures in Turkiye

Att. Abdulkadir Argıllı

 

Employee onboarding and termination are crucial processes in the lifecycle of any business. In Turkiye, these processes are governed by specific laws and regulations that ensure the rights of both employers and employees are protected. This article provides a comprehensive overview of the legal procedures for employee onboarding and termination in Turkiye, including a detailed discussion on severance pay. This article provides an overview of the legal procedures for both, empowering companies to navigate these critical phases effectively.

 

1. Employee Onboarding

Onboarding sets the tone for the employee experience and establishes a strong foundation for a productive working relationship. Here’s a breakdown of the key legal aspects to consider during onboarding in Turkiye:

  • Employment Contract: A written employment contract is not mandatory but highly recommended. It should clearly outline the terms of employment, including job title, duties, salary, working hours, vacation days, sick leave, and termination clauses. Both parties must sign the contract, and a copy should be provided to the employee.
  • Work Permit: For foreign employees, obtaining a work permit is mandatory. The application for a work permit is typically submitted by the employer and must be approved by the Ministry of Labor and Social Security. The process includes submitting necessary documents, such as the employment contract, passport copies, and educational certificates.
  • Social Security Registration: All employees, both Turkish and foreign, must be registered with the Social Security Institution (SGK). The employer is responsible for registering the employee and making the necessary social security contributions, which include health insurance, unemployment insurance, and retirement benefits. Failure to register employees may result in significant fines and legal complications.
  • Orientation and Training: While not legally mandated, providing proper orientation and training is crucial for employee success and integration. This could involve company policies, safety procedures, job-specific training, and familiarization with company culture.This orientation is important in order to hold the worker accountable for their actions and for occupational health and safety.
  • Preparation of Personnel Files: Employers are required to prepare a personnel file for each employee. Failure to prepare this file is subject to penalties. In addition, the existence of this file will be of great importance in possible lawsuits and legal proceedings. You can access our detailed article on personnel files from the following link: https://ottohukuk.com/publications/employers-obligation-to-prepare-personnel-files/

 

2. Employee Termination

Employee termination in Turkiye is a sensitive process that must be handled in compliance with the Labor Law to avoid legal repercussions. Termination can occur due to various reasons, including redundancy, misconduct, or the employee’s resignation.

Termination of employment can be initiated by either the employer or the employee. Or, the employment contract may be terminated by mutual agreement of the both parties.
There are specific procedures that employers must follow when terminating an employee:

 

2.1. Termination by Employer:

  • Notice Period: The length of the notice period depends on the employee’s tenure with the company. It ranges from two weeks for employees with less than six months of service to eight weeks for those with more than three years of service.
  • Written Notification: Employers must provide a written notice of termination, clearly stating the reason for termination. The termination notice should be delivered to the employee in person or through certified mail.
  • Justified Reasons: Termination must be based on justified reasons, such as economic downturns, poor performance, or misconduct. Unjustified termination can lead to legal disputes and compensation claims.
  • Immediate Termination: In cases of severe misconduct, such as theft, violence, or breach of confidentiality, employers can terminate the employment contract immediately without a notice period. However, the employer must provide evidence of the misconduct to avoid legal challenges.
  • Severance Pay: Employees terminated with just cause are generally not entitled to severance pay. However, there are exceptions, such as termination due to redundancy for economic reasons (see Severance Pay section below).

 

2.2. Termination by Employee:

  • Employees can resign with notice according to the terms of their employment contract or the TLL (whichever is more favorable to the employer).
  • Notice periods mirror those for employer-initiated termination.
  • Employees who resign without notice may be liable to compensate the employer for any damages caused by the abrupt departure.

 

2.3. Mutual Rescission Agreement: The parties to the employment contract, the employee and the employer, may agree to terminate the employment contract together. The validity of this agreement is subject to certain conditions.

 

3. Severance Pay

Severance pay is a lump sum payment an employer must make to an employee upon termination of their employment contract, under certain circumstances. It is a financial compensation paid to employees upon termination, provided they meet certain conditions. Here’s a breakdown of when and how much severance pay is required (Each situation should be evaluated on its own merits. Only a general framework will be outlined here):

 

3.1. Eligibility for Severance Pay

Employees are entitled to severance pay if they have completed at least one year of continuous service with the same employer. Severance pay is also due in the following scenarios:

  • Employer-Initiated Termination: If the employer terminates the contract without a justified reason.
  • Employee Resignation for Just Cause: If the employee resigns due to reasons such as non-payment of wages, health issues caused by the job, or maltreatment by the employer.
  • Retirement: When the employee retires.
  • Military Service: When the employee leaves for compulsory military service.
  • Marriage: If a female employee resigns within one year of marriage.

 

3.2. Calculation of Severance Pay

Severance pay is calculated based on the employee’s length of service and the last received gross salary. The formula is as follows:

For each year of service, the employee is entitled to one month’s gross salary. If the service period includes fractions of a year, the severance pay is calculated proportionally. The calculation of severance pay is a very detailed issue. General information is given here.

 

3.3. Payment of Severance Pay

Severance pay must be paid in a lump sum at the time of termination. Employers are required to make this payment promptly to avoid legal disputes and potential penalties.

 

4. Legal Disputes and Resolution

Disputes related to employee termination and severance pay are common in Turkiye. Employees who believe they have been unjustly terminated can file a lawsuit against their employer. The process typically involves the following steps:

  • Mediation: Before proceeding to court, parties are encouraged to resolve disputes through mediation. This is a mandatory step in labor disputes.
  • Labor Courts: If mediation fails, the case can be taken to a labor court, where a judge will review the evidence and make a ruling.

 

5. Best Practices for Employers

To ensure compliance with the legal requirements and minimize the risk of disputes, employers should adopt the following best practices:

  • Clear Contracts: Draft comprehensive and clear employment contracts that outline all terms and conditions.
  • Regular Training: Provide training for HR personnel on legal procedures and updates to labor laws.
  • Documentation: Maintaining detailed records of employment contracts, work permits, social security registrations, performance evaluations, and termination notices is essential for legal compliance and potential disputes.
  • Legal Consultation: Seek legal advice when dealing with complex termination cases or potential disputes.
  • Transparency and Communication: Maintaining open communication with employees throughout the onboarding and termination processes is crucial. Clearly explain company policies, expectations, and the reasons behind any termination decisions.
  • Respectful Treatment: Treat all employees with respect throughout their employment journey, from onboarding to termination. This fosters a positive work environment and minimizes the risk of legal challenges.

Following a well-defined onboarding process and adhering to legal requirements during termination not only protects companies from legal repercussions but also fosters a positive and productive work environment for employees. This, in turn, contributes to a company’s overall success and employee satisfaction.

 

6. Conclusion

Understanding the legal procedures for employee onboarding and termination in Turkiye is essential for businesses to operate smoothly and avoid legal complications. By adhering to the guidelines outlined in this article, employers can ensure they meet their legal obligations while fostering a fair and respectful work environment. Severance pay, as a key aspect of termination, must be handled with care to protect the rights of employees and maintain the company’s reputation.

 

A Reminder About Business Starters’ Legal Kit: This article is a part of “Business Starters’ Legal Kit” series. As we explained in our introductory article, the articles in this series contain essentials only. For detailed information, you can review the articles in special categories on our website or contact us.

 

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