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05October2018

Fixed-Term Employment Contracts According to Turkish Legislation

Employment contracts with a fixed-term are a valuable instrument with respect to labor laws in many countries. Over time, many firms in Turkey have begun using this type of employment contract as a way to circumvent the grant of various legal rights that come with indefinite term contracts. Issues with the application of regulation persist despite the numerous court decisions and attempts to stop the usage of fixed-term contracts to serve purposes other than those that they are intended to serve.

Due to the problems mentioned above, firms that have an actual need for fixed-term contracts to be applied to personnel often face problems resulting from the incorrect interpretation of the situation.

When the topic is observed from the perspective of the employer; just as it is frequently experienced in Istanbul Courts, even if the will of the employer and employee is known and clear, issues can arise at the end or renewal of a fixed-term contract. From time to time the personnel receives incorrect information from individuals in their surroundings who do not have adequate information and give them false information. Additionally, regardless of the good intentions of the employer, problems resulting from the incorrect preparation of the contract can lead to disagreements.

The labor legislation in force manages relations between the parties by considering restrictions of the Law.

Employment relationships that are tied to specific period of time or the completion of a specific project or objective are considered as having a fixed-term in accordance with the same legislation mentioned above.

Unless there is a substantial reason to do so, fixed-term agreements cannot be put in place in succession of one another. In the case that this occurs without substantial reason, the entire employment relationship will be considered as having an indefinite period beginning from the date of the first contract.

Theoretically, to have a fixed-term employment contract, it will be sufficient to specify the dates of employment. However, when the provisions of the Law numbered 4857 are considered, specifying dates is not sufficient itself to have a fixed-term contract. There must also be an objective tied to the contract when these provisions are taken into account.

Workers who are employed with a fixed-term contract are not entitled to job security provisions. Additionally, workers who are employed with a fixed-term contract do not accrue severance pay rights during their period of their employment. Distinctions are not made when it comes to items such as annual leave, social security. In other words, both contract types are subject to the same rules and practices. If different terms and conditions applied, they must be done so with a rightful and acceptable purpose.

The objectives which must be set in order to establish a fixed-term contract are often debatable. This topic is carried out in accordance with the decision numbered 158 of the International Labor Organization (ILO). The decision has been accepted and followed by several countries around the world. Additionally, the guidelines set forth by the Council of European Union Compliance Laws 99/70 governing fixed-term contracts are followed. The opening of a position with a fixed-term contract is contingent on the conditions that it is related to the completion of a specific job, or the emergence of a particular case. It is important to note that the use of words such as 'like' shows that the interpretations can be broadened with a proper and logical explanation. However, the fact that unclear or ambiguous statements can lead to disagreements and enforcement problems should not be overlooked.

For example, from the viewpoint of the Supreme Court, there is no dispute on the objectives set forth for stage performers. Another example would be foreign workers; the conditions must be obvious in order to grant them a fixed-term work permit based on a fixed-term contract. In addition, a fixed-term contract cannot be made if the results are contingent on a tentative condition. For example, there cannot be a condition in place that states that the agreement will come to an end when the annual growth of Turkey drops below 5%. Furthermore, it is important that the work that is described in the job description and shapes the employment agreement does not have a continuous nature but rather it must be in the form of work that can be completed after a specific period of time. A situation which exemplifies how this can result in a fixed-term contract is, if a new investment is being made for a water treatment facility and the employment of an expert is tied to the completion of the project. It is important that the work that has been performed can be identified in advance of the contract expiration date. Specific cases which are identified in the conditions of the fixed-term contract can be situations which are considered not to be routine for the business. An example of this would be the hiring of an employee for one year in order to fill the position of someone who is on maternity leave. Another specific case can be the increase in work volume. The hiring of a temporary employee for this reason must be supported by the inclusion of a clause in the contract which clearly states the situation and that there has been a consensus on the reason for hire, this will prevent any disagreements within the nature of the agreement.

Lastly, it can be said that the issue of controversy arising from the successive contracts ongoes. Terms and conditions of contracts that are put in place for succession of one another as well as the parties involved are analyzed and the reason for the successive contracts is judged by looking at whether or not there is an ulterior motive behind it. To pertain fixed-term contracts being used back to back, the courts pay great attention to whether or not the parties have good intentions and honesty, in addition to whether or not the criteria to grant the right to extend fixed-term contracts are being abused.

A Supreme Court decision:

"In the present case in which a fixed-term contract was put in place between the parties for the dates of 27.08.2003 – 27.02.2004, it is apparent that since the employment did not end on 27.02.2004 it was extended as per the Article 4 for a period of six months. The plaintiff who was employed as an architect was not tasked exclusively with one project and the nature of the work was continuous and was lacking the element of a defined objective. Employment agreements made in this manner are considered to have an undefined term and therefore rather than denying the plaintiff's request for compensation of the remaining period of the contract, the request will be upheld and ruled in favor of the plaintiff."

In the event that the employment contract was ended prior to the completion of construction, the supreme court considered the reason for hiring the employee (to see the project through completion) as a valid reason to extend the contract for a period of six months in accordance with the Article 11 of the Labor Law 4857. What can be understood from this approach to the issue is that the Supreme Court pays close attention the criteria for all fixed-term contracts and whether or not a wrongful termination was made in addition to any contradictory contract topics and articles which can lead to the loss of rights of the employee have.

Reference Books & Articles

Yargıtay Court 9. HD 22.09.2011 gün 2009/19813 E, 20011/33241K

Alpagut, Gülsevil, Fixed-Term Contract Ankara 1998

Süzek, Sarper, Labor Law Ankara 2008

4857 Numbered Labor Law

Written by Selim Tankut Akdağ, Posted in Labour Law

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About The Author

Selim Tankut Akdağ


Certified Public Accountant, SMMM, Partner
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