Employment Contracts in Turkiye

Att. Abdulkadir ARGILLI

Employment contracts are the cornerstone of the employer-employee relationship. A well-drafted contract protects the interests of both parties and minimizes potential disputes. These contracts outline the terms and conditions of employment, set expectations for both parties, and provide legal protection. This article will provide a comprehensive overview of employment contracts in Turkiye, focusing on key clauses and best practices. Additionally, we will address crucial points that employers and employees should carefully consider.

1. Legal Framework for Employment Contracts in Turkiye

Employment contracts in Turkiye are primarily regulated by the Turkish Labor Law No. 4857, which sets forth the basic rights and obligations of both employers and employees. Other relevant legal frameworks include the Turkish Code of Obligations, social security regulations, and collective bargaining agreements (if applicable).

2. Types of Employment Contracts

Employment contracts should be drafted in accordance with the nature and requirements of the work to be performed. With the development of technology, remote and more flexible working models are also evolving. Thus, in addition to traditional business models, new business models and accordingly new employment contract contents are emerging. Important types of employment contracts are as follows:

Fixed-Term Contracts: These contracts are for a specific duration and automatically terminate at the end of the period unless renewed.

Indefinite-Term Contracts: These contracts have no set end date and continue until either party terminates the contract.

Part-Time Contracts: For employees working fewer hours than the full-time equivalent.

Trial Period Contracts: Allows both parties to assess suitability before committing to a long-term employment relationship.

On-Call Working Contracts: An on-call employment contract is an employment relationship in which it is agreed that the employee will fulfill his/her performance of work if he/she is needed in relation to the work he/she has undertaken to perform.

Remote or Hybrid Working Contracts: Remote work is a work relationship based on the principle that the employee performs his/her work at home or outside the workplace through technological means of communication within the scope of the work organization created by the employer.

3. Key Clauses in an Employment Contract

A typical employment contract includes essential clauses such as, detailed information of the parties, job title and job description, commencement date, duration of the contract, work location, remuneration, working hours, vacation and leave rights, social security terms, confidentiality, non-compete and non-solicitation, termination conditions, dispute resolution terms.

In practice in Turkey, it is seen that especially small-scale employers organize employment contracts by finding templates from open sources. However, the above-mentioned elements should be designed in accordance with the requirements of the sector and the work to be performed. Again, it is important that contracts are designed in accordance with current laws and regulations. Otherwise, legal disputes and loss of rights may arise.

4. Best Practices for Drafting Employment Contracts

4.1. There are some basic considerations when drafting an employment contract. We will first talk about these and then provide customized advice for employers and employees. Within this framework, common essentials are:

• Clarity and Precision: Use clear and unambiguous language to avoid misunderstandings.
• Compliance with Labor Law: Ensure the contract adheres to Turkish labor laws and regulations.
• Individualization: Tailor the contract to the specific employee and position.
• Balance of Interests: Strike a fair balance between the rights and obligations of both parties.
• Review and Update: Regularly review and update the contract to reflect changes in employment law and company policies.

4.2. Crucial Points for Employers

• Proper Classification: Accurately classify employees as regular workers, part-time workers, or temporary workers.
• Written Contracts: Prepare written employment contracts for all employees, regardless of contract duration.
• Description of the Work: Be specific about job duties to avoid ambiguity. This protects against claims of task creep or unauthorized changes in role.
• Overtime and Working Hours: Comply with legal limits on overtime and working hours. Adhere to legal requirements for working hours and overtime pay to avoid legal disputes and penalties.
• Social Security Contributions: Make timely and accurate social security contributions.
• Termination Procedures: Follow correct procedures for terminating employment to avoid legal disputes.
• Data Protection: Implement measures to protect employee personal data.
• Confidentiality Clause: Clearly define confidential information and the consequences of breaching confidentiality to protect the company’s interests. Especially in companies engaged in research and development or in sectors with intense competition, confidentiality is of great importance. Information accessed by employees must be protected by effective sanctions.
• Non-compete Clause: These clauses prevent employees from working with competitors for a certain period after leaving the company. Non-solicitation clauses prevent employees from soliciting the company’s clients or employees. Accordingly, ensure that non-compete clauses are reasonable in scope, duration, and geographic area to avoid being deemed unenforceable.

4.3. Crucial Points for Employees

• Understand the Contract: Read the contract carefully and seek clarification if necessary.
• Know Your Rights: Be aware of your rights under Turkish labor law.
• Check the Description of Your Position: An employment contract shall clearly define the employee’s role, responsibilities, and reporting structure. This prevents misunderstandings and ensures both parties have a mutual understanding of expectations. Ensure that the job description accurately reflects the agreed-upon role and responsibilities to prevent being assigned tasks outside the scope of the contract.
• Check the Salary and Bonuses: The contract shall detail the employee’s salary, payment frequency, bonuses, allowances, and any other benefits. This clause should also include information about any deductions. Accordingly, review the salary clause carefully to ensure it aligns with the agreed-upon terms, including any bonus structures or additional compensation.
• Confidentiality clause: Ensure that the confidentiality clause is reasonable and does not overly restrict your future employment opportunities.
• Keep Records: Maintain copies of your employment contract, pay slips, and other relevant documents.
• Non-compete Clause: Review these clauses carefully to understand the limitations they may place on future employment opportunities.
• Review Restrictive Clauses: Carefully review non-compete and confidentiality clauses to understand how they may impact your future employment opportunities.
• Know the Dispute Resolution Process: Understand the process for resolving disputes and ensure that it is fair and accessible.

5. Why Industry-Specific Contracts Matter

While general employment law provides a foundational framework, specific industries often have unique characteristics, risks, and regulatory requirements that demand tailored employment contracts. Ignoring these nuances can lead to significant legal and operational challenges.

For instance, industries like healthcare, construction, technology, and finance have unique regulatory frameworks that impose specific obligations on employers. Healthcare professionals may be subject to stricter confidentiality requirements due to patient privacy laws, while construction workers might need detailed clauses related to safety standards and risk management. In the technology sector, intellectual property rights and data protection are often more heavily emphasized, while in finance, compliance with anti-money laundering (AML) laws may be critical.

In order to point out the importance of sector-specific contracts, we would like to cite the following elements:

• Compliance: Different industries are subject to distinct regulations, licensing, and certifications. Contracts must align with these requirements to avoid legal repercussions.
• Risk Management: Certain industries involve specific hazards or confidential information. Contracts can address these risks by incorporating relevant provisions.
• Employee Protection: Some industries have particular health and safety concerns. Contracts should outline protective measures and benefits.
• Business Needs: Industry-specific terms can address unique employment practices, performance expectations, and compensation structures.

6. Limits of the Contract and Compliance

In practice, it is observed that some employers prepare contracts according to their own needs, but do not take legal regulations into consideration. However, contracts should be prepared by taking into account not only legal regulations but also precedent court decisions.

For example, in some sectors, confidentiality is of vital importance. For this reason, employers want to include very severe sanctions for breaches of confidentiality. However, according to the law and precedent court decisions, there are limits to sanctions. For this reason, we recommend adding “sanctions that comply with legal limits and are enforceable” rather than imposing “arbitrary and high sanctions”.

Again, for example, some employers want to enforce the non-competition clause very strictly. However, in Turkey, there are limits on the non-competition clauses that can be applied to employees. Contractual clauses must comply with these limits. Otherwise, the contractual prohibition will be invalid.

7. Conclusion

Employment contracts are essential legal documents that define the terms of the employer-employee relationship. By understanding key clauses, best practices, and potential pitfalls, both employers and employees can protect their interests and minimize the risk of disputes, both parties can ensure a smooth and mutually beneficial employment relationship.

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