This document summarizes key aspects of employment contract termination under Turkish labor law. It discusses the two main types of employment contracts - those for a definite or indefinite period. Definite period contracts can only be used under special circumstances and cannot be repeatedly extended without cause. Indefinite period contracts can be terminated by the employer with notice, which minimum periods ranging from 2 to 8 weeks depending on tenure. Terminating an indefinite contract without valid cause entitles the employee to severance pay and potential reinstatement. The document outlines valid causes for termination as well as termination by the employee due to military service or marriage.

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TERMINATION OF EMPLOYMENT CONTRACTS UNDER TURKISH
LAW
05.05.2015
1. TYPES OF EMPLOYMENT CONTRACTS
Under Turkish Labor Law numbered 4857 ("Labor Law"), there are two main categories of
employment contracts, namely i) employment contracts concluded for an indefinite period
and ii) employment contracts concluded for a definite period.
An employer can enter into an employment contract with the employee for a definite period
only under special objective circumstances set forth in the Article 11 of Labor Law such as in
case of a specific work to be performed (e.g. construction project) or a work which must be
completed within a certain period (e.g. seasonal work). In other words, a defined objective for
temporary employment must exist in order to constitute a basis for a definite-term employment
contract.
Employment contracts entered into for a definite term cannot be re-concluded and extended
more than once consecutively unless there is an essential reason. In this respect, the High Court
of Appeals, in its decision dated 2012, ruled that even if the employment contract was initially
concluded for a definite term, the contract is deemed as a contract entered into an indefinite
term from the beginning of the employment, due to the fact that the employer renewed the
contract 3 consecutive times without any essential reason.
The mindset of the legislator for allowing executing employment contracts for a definite period
only under special circumstances and the prohibition of extending such contracts consecutively
without any essential reason is to protect the employees and to ensure that they benefit from the
legal rights granted to employees who work under employment contracts concluded for
indefinite term. The employee is not entitled to request any severance or notice payment when
a definite-term contract terminates automatically at the end of the term according to the
decisions of the High Court of Appeals. Also, notice payment (as mentioned below) is not made
on the termination of a definite-term contract since the duration of definite-term employment
contracts are known by the parties since the beginning.

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On the other hand, according to the Turkish Code of Obligations, a definite-term employment
contract is automatically converted into an indefinite-term employment contract if parties
implicitly continue the relationship after the expiry of the contract term.
For the sake of not allowing employers to use definite-term contracts as an excuse not to pay
any severance and notice to the employees; Turkish courts often interpret definite-term
contracts very narrowly and only allow for such contracts in rare situations. Therefore, it is very
common in Turkey that the employers usually enter into (as they are required to) contracts with
an indefinite term with their employees (sales staff, engineers, accountants, IT staff, etc.).
In light of the foregoing, our below explanations will only focus on the termination of
indefinite-term contracts.
2. TERMINATION WITH NOTICE
2.1. Notice Periods
According to Article 17 of the Labor Law, the employer is entitled to terminate an employment
contract concluded for an indefinite period by observing the following minimum notification
periods:
• 2 weeks prior notice if the duration of employment is less than 6 months,
• 4 weeks prior notice if the duration of employment is between 6 – 18 months,
• 6 weeks prior notice if the duration of employment is between 18 months – 3 years,
• 8 weeks prior notice if the duration of employment is more than 3 years.
These periods are minimum and may be increased by mutual agreement. The employer may
terminate the contract of the employee immediately without giving any prior notice provided
that the employer pays in advance the salary of the employee which corresponds to the relevant
notice period.
During the period between the date the notification for termination and the actual termination
date, the employer is required to grant the employee sufficient time to seek new job
opportunities during working hours, without making any reduction from his/her salary.
However, the duration of this granted period cannot be less than 2 hours a day, which can be
exercised as a whole (e.g. 1 day leave during a week rather than using 2 hours each day).

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2.2. Compensation
Unless there is justified ground for termination (as mentioned in detail below); in case of
termination, the employee will be entitled to the following payments:
• Severance Payment: The severance payment will be calculated as 1 month-salary
(gross monthly salary plus other regular benefits (if any) that can be monetized) of the
employee multiplied by the number of his/her employment years (with the employer).
However, the current ceiling for yearly severance payment is TRY 3.541,37.
• Notice Payment: Only if the employee is not granted the necessary notification period
as mentioned above.
• Bad-faith Compensation: In case of a lawsuit, if the court decides that employer's
termination constitutes an act of bad faith, the employee will be entitled to bad faith
compensation, which is in the amount of 3 times the notice period payment even if all
of the notice period requirements are fulfilled.
2.3. Termination Based on Valid Reason - Reinstatement of the Employee
In order to terminate the indefinite-period employment contract of an employee having at least
6 months service in a workplace operating with at least 30 employees; the employer must
present a valid ground either i) stemming from the capacity or conduct of the employee
or ii) stemming from the requirements of the establishment, workplace or the job. Economic
crisis, underperformance or insufficiency of the employee (provided that such is proved with
evidence) or liquidation of the company may be considered as valid reasons for terminating a
contract.
If the employee whose contract is terminated is in the opinion that his/her termination was not
based on valid grounds, such employee is granted with the right under the Labor Law to file a
lawsuit against the employer for reinstatement within 1 month following the date of his/her
receipt of the termination notification by the employer.
In case the court decides that the termination is not based on valid grounds, the employer is
obliged to re-employ the employee within 1 month. In case the employer fails to re-employ the
employee within 1 month after his/her application, the employer will be required to pay
compensation to the employee in the amount of 4 to 8 months salary to be determined by the
court. In addition to such compensation, the salary and all other rights of the employee covering
the maximum of 4 months must also be paid to the employee for the period of unemployment
until the final judgment of the court is received. This amount is paid to the employee regardless
of whether the employer re-employs the employee. If both payments are made, there is no

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requirement to make any bad-faith compensation payment even if the court decides that there
is an act of bad-faith.
3. TERMINATION BASED ON JUSTIFIED GROUNDS
The employer also has the right to terminate any type of employment contract (an indefinite or
definite-period) under specific conditions indicated under Article 25 of the Labor Law. Such
specific conditions are classified under reasons of health, actions of the employee against moral
values and goodwill and similar circumstances (e.g. theft, excessive damage to company
property, persistence in disobedience, sexual harassment, use of drugs, assault, absence, etc.)
and compelling circumstances (e.g. the employee is sentenced to imprisonment)
The following are the most common grounds for termination based on justified grounds in
Turkish business life:
• If the employee is absent from work: i) for 2 consecutive days or ii) for 3 working days
in any month or iii) twice in 1 month on working days which follow a holiday, without
the employer's permission or a valid reason (illness, death, court duty, etc.);
• If the employee insists on not performing his/her duties despite being warned;
• If, either willfully or with gross negligence, the employee risks or damages workplace
properties or machinery, equipment or other materials that are entrusted to him/her, and
the damage cannot be compensated with 30 days salary;
• If the employee commits a dishonest act against the employer, such as a breach of trust,
theft, or disclosure of trade secrets.
Employer's right to terminate a contract on the justified grounds stemming from the employee's
actions against moral values or goodwill must be exercised within 6 working days following
the date the employer becomes aware of the relevant action and in any case within 1 year
following the occurrence of such action.
In case of termination by the employer based on actions of employee against moral values and
goodwill, the employer has right to terminate the employment contract without a notice period
and compensation for notice and/or severance. However, in other cases, (health reasons and
compelling circumstances) the employer may be required to pay severance to the employee
depending on the case (however even in such case termination can be exercised immediately).
If a conflict is brought before court, each termination is evaluated on a case-by-case basis. In
case of any event which the employer thinks that could present justified grounds for

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termination, it is always advised to immediately prepare an official minute reporting such
incident signed by two witnesses (preferably one to be the superior of the employee) and if
possible by the employee him/herself. Immediately taking and preserving evidence (e.g.
photographs in case of damage to property) is also very crucial since the burden is on the
employer to prove that the termination is based on justified grounds.
Depending on the reason for termination, it is usually advised to give one or two prior warnings
to the employee before proceeding with the termination process. In such a case, the employee's
defense must be obtained in writing in each case.
4. TERMINATION BY THE EMPLOYEE DUE TO MILITARY SERVICE OR
MARRIAGE
4.1 Military Service
The Labor Law does not govern any provision regarding termination due to military service.
As per Article 120 of the Labor Law, all provisions of the previous labor legislation (Labor
Law numbered 1475 – "Old Labor Law") has been abolished except for Article 14. Article 14
of the Old Labor Law states that if the employee terminates his employment contract for
enlisting in active mandatory military service, the employer is required to make severance
payment. According to this legislation, any employee who will terminate his employment
contract to fulfill his mandatory military service will be entitled to receive severance payment
from his employer. For an employee to gain the right to request severance payment due to
military service, two conditions must be met.
The first condition is proof. In order to receive the severance payment, the employee must
provide sufficient proof that the reason for his termination is to fulfil the military service. The
employees must provide evidence in the form of a Military Draft Certificate. Without this form
of proof, an employer could in theory refrain from giving any severance payment. However, it
should be noted that the High Court of Appeals decisions indicate that if the employee truly
enlists in military service and proves this fact after he completes his service, he has the right to
request severance payment (with interest) from his former employer. Therefore it would be a
risky move for an employer to not provide severance payment to the employees who fail to
provide proof that they are terminating their employment due to military service unless the
employer is strongly certain that it is not the case. The employees have the right to request
severance payment (through a lawsuit) even after they have finished their military service.

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The second condition is the duration of time between the termination and actually enlisting in
military service. It is generally accepted that sufficient time must be given to the employee to
prepare for his service. Therefore, the date of the termination should be some time before the
actual enlisting date. However, the duration of time between the termination and enlisting must
not be more than what is generally needed. It is generally accepted by the High Court of Appeals
that a long duration between termination and enlisting is a strong indication that the termination
is not related to military service duty. In one decision, the court ruled that duration of 1 year
and 1 month is too long of a time to accept that the reason for termination is actually military
service. On the other hand, 3 months is considered as an appropriate duration by the court.
4.2 Marriage
Similar to the severance payment obligations for military service-related terminations, as per
Article 14 of Old Labour Law, the female employees have the right to terminate their
employment contract due to marriage and request severance payment accordingly.
The employee's right to terminate the employment contract due to marriage and request
severance payment must be exercised within 1 year of the date of the marriage. If an employee
terminates her contract after 1 year has passed from her marriage, she would not have the right
to request any severance payment. Similarly, the right to request severance payment does not
exist if the employee terminates her contract before the marriage.
5. TERMINATION BY MUTUAL AGREEMENT
Under the principle of freedom of contract, the employer and the employee may decide to
mutually terminate any type of employment contract whenever and however they deem.
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