What Is an Employment Contract and What Are Its Legal Bases?

An employment contract is a contract in which one party (the employee) undertakes to perform work in a subordinate capacity and the other party (the employer) undertakes to pay wages. Article 8 of the Labor Law No. 4857 regulates the definition and formal requirements of the employment contract, while Articles 393-469 of the Turkish Code of Obligations No. 6098 contain general provisions relating to service contracts.

An employment contract has three fundamental elements: performance of work, wages, and subordination. The work performance element refers to the employee's obligation to perform a specific job. The wage element includes the employer's obligation to make payment in return for work. The subordination element refers to the employee working in accordance with the employer's instructions and under the employer's supervision. The subordination element is the most important characteristic that distinguishes the employment contract from other work performance contracts (contracts for work, agency contracts, etc.).

An employment contract is, as a rule, not subject to any particular form. Pursuant to Article 8/1, the employment contract is not subject to any special form unless otherwise specified by law. It can also be established verbally. However, fixed-term employment contracts and employment contracts with a duration of one year or more must be made in writing.

Non-compliance with the written form requirement does not affect the validity of the employment contract but produces important consequences in terms of proof. In cases where no written contract exists, the existence and conditions of the employment relationship may be proven by all types of evidence. The employer must provide the employee with a written document showing the working conditions within two months at the latest (Article 8/3).

Indefinite-Term Employment Contract

An indefinite-term employment contract is an employment contract established without specifying any duration. Pursuant to Article 11/1, if the employment relationship is not made dependent on a specific period, the contract is deemed indefinite-term. The indefinite-term employment contract is the basic contract type in labor law and ensures full benefit from the protective provisions of the Labor Law.

The most important feature of an indefinite-term employment contract is the obligation to comply with notice periods when terminating the contract. Pursuant to Article 17, the party terminating an indefinite-term contract must grant the other party a notice period determined according to their seniority. If these periods are not complied with, notice pay must be paid.

An employee working under an indefinite-term employment contract benefits from all protective rights provided by the Labor Law. These rights include severance pay, notice pay, job security (right to reinstatement), annual leave, and union rights. The obligation of the employer to base termination on a valid reason within the scope of job security is the most important protective mechanism of indefinite-term contracts.

The employer's right of termination is limited by the job security provisions regulated in Articles 18-21 for indefinite-term contracts. In workplaces within the scope of job security (workplaces employing 30 or more workers) and for employees with at least 6 months of seniority, the employee may file a reinstatement lawsuit if the employer terminates the employment contract without a valid reason.

Fixed-Term Employment Contract

A fixed-term employment contract is, pursuant to Article 11/1, an employment contract established based on objective conditions such as fixed-term work, completion of a specific task, or the occurrence of a specific event. The existence of an essential reason is mandatory for establishing a fixed-term employment contract.

Essential Reason Requirement

The essential reason requirement sought in Article 11 for establishing a fixed-term employment contract is a regulation aimed at protecting the employee, not the employer. A fixed-term employment contract made without an essential reason is treated as an indefinite-term employment contract from the outset.

Examples of essential reasons include: seasonal work, completion of a specific project, temporary increase in workload, temporary workers hired to replace employees on sick leave or maternity leave, fixed-term public projects, seasonal tourism activities, and specialized work needed for a specific period. The existence of an essential reason must be evaluated separately in each specific case.

The Court of Cassation interprets the essential reason requirement strictly. The mere intention of the employer to make a fixed-term contract is not accepted as an essential reason. The nature of the work must be limited in duration or dependent on the occurrence of a specific event. Otherwise, the contract is deemed indefinite-term and the employee benefits from all indefinite-term contract rights.

Prohibition on Successive (Chain) Contracts

Pursuant to Article 11/2, a fixed-term employment contract may not be made successively (in a chain) more than once without an essential reason. Contracts made successively are deemed indefinite-term from the outset. The purpose of this prohibition is to prevent employers from depriving employees of the protective rights provided by indefinite-term contracts by successively renewing fixed-term contracts.

The exception to the successive contract prohibition is the continuation of the essential reason. If the essential reason continues to exist, renewal of the fixed-term employment contract is possible. For example, if a specific project's duration is extended, renewal of the fixed-term contract is based on an essential reason as long as the project continues.

The Court of Cassation broadly interprets the successive contract prohibition and seeks the existence of an essential reason with each renewal. The burden of proving the essential reason lies with the employer. The employer must demonstrate with concrete evidence that the essential reason continues for each renewal [TO BE VERIFIED].

Termination of Fixed-Term Contract

A fixed-term employment contract automatically terminates upon expiration of the agreed period or completion of the work. In this case, no notice is required and notice pay is not owed. Severance pay is not paid when a fixed-term contract automatically terminates at the end of its term; however, if terminated early by the employer, it is paid if conditions are met.

If a fixed-term contract is unlawfully terminated before its expiration, wages for the remaining period (balance period wages) may be claimed as compensation. Pursuant to Article 438 of the Turkish Code of Obligations, the party that terminates the contract without just cause is obligated to pay the other party the amount that would have been earned if the contract period had been observed. However, the amount the employee avoided earning by working or being able to work at another job is deducted from this compensation.

Part-Time Employment Contract

A part-time employment contract is, pursuant to Article 13, a contract established by determining the employee's normal weekly working time as significantly less than that of a comparable full-time employee. According to Article 13/2, the wages and divisible monetary benefits of a part-time employee are paid proportionally to their working time compared to a full-time comparable employee.

In determining part-time work, whether the weekly working time exceeds two-thirds is examined. An employee working less than 30 hours per week is considered part-time, while an employee working 30 hours or more is considered full-time. This threshold is regulated in the Regulation on Working Hours Related to the Labor Law [TO BE VERIFIED].

Rights of Part-Time Workers

Pursuant to Article 13/2, an employee working under a part-time employment contract may not be treated differently from a comparable full-time employee solely because the employment contract is part-time, unless there is a reason justifying the distinction. This prohibition on discrimination is the fundamental principle in protecting part-time workers.

The rights of part-time workers are applied proportionally to the rights of comparable full-time workers. Monetary rights such as wages, bonuses, and premiums are calculated proportionally to working time. Regarding annual leave, however, a part-time employee earns annual leave of the same number of days as a full-time employee regardless of working time.

In calculating severance pay for a part-time employee, the total period from the start of the employment contract is taken into account, not the total of the periods actually worked. However, wages are calculated based on part-time working wages. For example, a part-time employee working 3 days a week with 5 years of seniority earns severance pay based on 5 years, but the compensation amount is calculated based on part-time wages [TO BE VERIFIED].

The social security rights of part-time workers also differ from full-time workers. Social security premiums are reported based on the number of days the part-time employee actually worked. This directly affects the employee's retirement period and premium day count.

On-Call Work

On-call work is, pursuant to Article 14, an employment relationship in which it is agreed that the employee will perform work when needed in connection with the work they have undertaken. This type of contract is a special form of part-time work.

In on-call work, the parties may determine how long the employee will work in a time period such as a week, month, or year. If not determined, the weekly working time is accepted as 20 hours. The employer must require the employee to work at least 4 consecutive hours each time they are called.

The employer must notify the employee of the work to be performed at least 4 days in advance. An employee who fails to comply with a call made within this period is deemed to have acted contrary to the employment contract. A call made by the employer without observing this period is not binding on the employee, and the employee cannot be held responsible for not complying with the call.

In on-call work, although the employee stands ready to perform work for the determined period, the employee does not lose the right to wages even if not called by the employer. Pursuant to Article 14/3, the employer is obligated to pay wages whether or not the employee is put to work during the agreed period.

Probationary Employment Contract

Pursuant to Article 15, the parties may include a probation clause in the employment contract. The probation period is a maximum of 2 months. This period may be extended to 4 months by collective bargaining agreements. The probation period allows both the employer to evaluate the employee and the employee to evaluate the workplace.

During the probation period, the parties may terminate the employment contract without a notice period and without compensation. This right is granted to both the employee and the employer. However, even during the probation period, the employee's wages and other rights for the days worked are reserved.

The probation period is included in the seniority period. If the employment contract continues after the probation period, the probation period is included in the seniority calculation. The probation period also counts as working time for earning the right to annual leave.

Team Contract and Temporary Employment Relationship

Team Contract

Pursuant to Article 16, a team contract is a contract made between an employer and one of the workers representing a team of multiple workers, acting in the capacity of team leader. The team contract must separately indicate the identity of each worker and the wages they will receive. The team contract must be made in writing.

The team leader receives the workers' wages as an intermediary and distributes them to the workers. However, the team leader may not make deductions from the workers' wages. The employer's payment obligation is toward each individual worker directly, not toward the team leader.

Temporary Employment Relationship

Pursuant to Article 7, a temporary employment relationship is the employer's temporary transfer of an employee to another workplace within the holding structure or belonging to the same group of companies, on the condition of obtaining written consent at the time of transfer. A temporary employment relationship may be established for a maximum of 6 months and may be renewed at most 2 times.

A temporary employment relationship may also be established through private employment agencies. The 2016 legal amendment determined the conditions and limits for establishing temporary employment relationships through private employment agencies. In this context, the temporary worker works at the workplace of the employer with whom the temporary employment relationship is established, but the employment contract is established with the private employment agency [TO BE VERIFIED].

Formal Requirements and Content of Employment Contracts

An employment contract is, as a rule, not subject to any form and may also be established verbally. However, written form is mandatory in certain situations: fixed-term employment contracts (Article 11), team contracts (Article 16), and contracts providing for on-call work (Article 14). Indefinite-term contracts with a duration of one year or more must also be made in writing.

The fundamental elements that should be included in a written employment contract are: identification information of the parties, job description, working hours, wage amount and payment time, contract duration (if fixed-term), probation period (if provided), annual leave periods, and other working conditions. Pursuant to Article 8/3, in cases where no written contract is made, the employer is obligated to provide the employee with a written document within 2 months at the latest showing general and specific working conditions, daily or weekly working hours, basic wage and any wage supplements, wage payment period, contract duration if fixed-term, and rules to be observed by the parties upon termination.

Provisions in the employment contract may not contravene the mandatory provisions of the Labor Law. Contract provisions that fall below the minimum standards set by the law in favor of the employee are invalid, and the provisions of the law apply in place of such provisions. The standards in the law may be increased but not decreased by contract.

Comparison of Employment Contract Types

This comparison table summarizes the fundamental differences between types of employment contracts. However, the determination of the contract type in each specific case must be based on the nature of the relationship between the parties and the characteristics of the work. The actual working conditions, not the title of the contract, are decisive.

This content is for general informational purposes only and does not constitute legal advice. It is strongly recommended that you seek professional support from a lawyer for your specific legal issues.