• Collective Dismissal of Employees under Turkish Law
  • December 3, 2015
  • Law Firm: Erdem Erdem Law Office - Istanbul Office
  • Introduction

    The collective dismissal of employees is regulated under Art. 29 of the Labor Act numbered 4857 (“Act”). There are certain criteria to be met in order for a given lay-off to be identified as collective dismissal under Turkish Law.

    The subject matter of this article will be the definition of collective dismissal, the employer’s obligations, and the sanctions applicable concerning breaches of collective dismissal rules.

    Definition

    Art. 29 of the Act defines collective dismissals in quantitative and qualitative terms that must be collectively present for a given lay-off to be deemed as a collective dismissal. Art. 29 (1) describes the qualitative measure as “...collective terminations for reasons of an economic, technological, structural or similar nature necessitated by the requirements of the enterprise, the establishment or activity...”

    In a quantitative dismissal, an employer shall dismiss a certain number of employees specified in the said provision in order to be subject to collective dismissal rules: (i) a minimum of 10 employees for workplaces where 20 and 100 employees are employed, (ii) at least 10% of the employees for workplaces where 101 and 300 employees are employed, (iii) a minimum of 30 employees for the workplaces where 301 or more employees are employed.

    It must be noted that even though the employees may be dismissed on the same date or on different dates, all dismissals must be affected within one month. Moreover, as can be observed from the numbers provided by the Act, the collective dismissal rules apply only if there are at least 20 employees within the workplace.

    Obligations of the Employer

    The employer intending the collective dismissal of employees has additional obligations to those which arise in the termination of individual employment contracts.

    Obligation to Notify the Contemplated Collective Dismissal to Relevant Authorities: In accordance with Art. 29 (1) of the Act, the employer shall deliver its notification of its intention to collectively dismiss its employees, in writing, to the workplace labor union representatives, the relevant regional directorate of the Ministry of Labor and Social Security (Çalisma ve Sosyal Güvenlik Bakanliǧi), and the Turkish Employment Organization (Türkiye Is Kurumu - ISKUR) 30 days prior to such dismissal. Such written notification shall include the reason for the contemplated lay-off, the number of persons and groups to be affected by the lay-off, as well as its timing.

    Obligation to Notify the Employees of Termination of Employment Contract: Apart from the notifications to be made to the above-mentioned persons and bodies, pursuant to Art. 17 of the Act, the employer is required to provide separate notices to each of the employees whose labor contract will be terminated. This “notice of termination” will include the notice periods applicable to each employee. It must be emphasized that notices of termination served upon the employees shall be effective 30 (thirty) days after written notification is given to the relevant regional directorate of the Ministry of Labor and Social Security as per Art. 29 (1) of the Act. In other words, the notice periods granted to the employees for termination specified under Art. 17 of the Act shall start only after the said 30-day period expires. Once the 30-day period expires, the employer may choose to wait for the expiry of the notice period applicable to a given employee, or it may choose to compensate the employee (notice pay), in lieu of a notice period, together with the notice of termination and, therefore, terminate the employment contract with immediate effect.

    Obligation to Hold a Meeting with Labor Union Representatives: As per Art. 29 (4) of the Act, the employer shall hold a consultative meeting with the workplace labor union representatives, if any. The measures to be taken to avert or to reduce the layoffs, as well as measures to mitigate or minimize their adverse effects on the concerned employees are the subject matters of this meeting. Pursuant to the last sentence of Art. 29 (4) of the Act, minutes of this meeting confirming that the said consultations have been held shall be drawn up at the conclusion of the meeting.

    Obligation to Notify the Closure of a Workplace: If the collective dismissal of employees is due to the closure of the workplace, which means a definite and permanent ceasing of activities, the employer shall solely notify the relevant regional directorate of the Ministry of Labor and Social Security and Turkish Employment Organization 30 days prior to the closure, pursuant to Art. 29 (6) of the Act. In this case, there is no obligation of the employer to notify the labor union representatives or to conduct a consultative meeting of the impending collective dismissal.

    As per Art. 29 of the Act, if the employer wishes to hire persons for positions of the same nature within six months from the finalization of the collective dismissal, the employer must initially offer the position to his former employees who have the relevant qualifications.

    Sanction for the Breach of Obligations

    In accordance with Art. 100 of the Act, the employer who dismisses employees contrary to its obligations arising from Art. 29 of the Act shall be liable for an administrative fine for each employee whose labor contract was unlawfully terminated. In accordance with the chart provided by the Ministry of Labor and Social Security in relation to the applicable labor law administrative fines, the said fine is TL 554 per employee for 2015.

    At this point, one may claim that the employer is not obliged to respect Art. 29 of the Act, provided that it pays the administrative fine. This is controversial in the doctrine. One of the experts considers such terminations to be null and void, by claiming that stipulating only an administrative fine does not rule out legal sanctions that are applicable to an unlawful act[1]. The precedents of the Court of Cassation vary on this issue. In one of its judgments, the Court rejected the view that the collective dismissals violating Art. 29 of the Act are null and void, by stating that “...the sanction for the violation of the rules concerning collective dismissals is the administrative monetary fine...”[2]. Another judgment of the Court accepted that along with the administrative sanctions, the termination of the labor contracts of the employees who were subject to collective dismissal shall be deemed as null and void: “... The fact that the violation of the collective dismissal rules is sanctioned by administrative monetary fines does not mean that the terminations are valid...”[3]. Therefore, in the event that a collective dismissal does not fulfill the obligations set under Art. 29 of the Act, it may be argued that the terminations are null and void, and that the employer must pay the administrative fine.

    Conclusion

    In the light of the foregoing, it may be concluded that (i) in order for a lay-off to be considered as a collective dismissal, the qualitative and quantitative conditions that are specified under Art. 29 of the Act must be met; (ii) the employer who intends to collectively lay-off its employees in line with Art. 29 of the Act must notify the relevant authorities and the employees of the collective dismissal. The notice periods for employees commence following the expiry of 30 days as of the notification of the collective dismissal to the relevant authorities. (iii) the obligation of the employer to make payments that the employee is entitled to due to the termination of its employment contract remains valid; (iv) administrative monetary fines apply for each employee who was dismissed in breach of Art. 29 of the Act. However, payment of these administrative fines does not necessarily deem the collective dismissal as valid. In the event that the obligations are not fulfilled, the termination may be deemed to be null and void in addition to the payment of the administrative fine.



    [1] Sarper Süzek, Labor Law, Istanbul 2013, pg. 621.

    [2] Court of Cassation 9th Civil Chamber Decision dated 26.01.2004 and numbered 1320/1174 (www.kazanci.com).

    [3] Court of Cassation 9th Civil Chamber Decision dated 19.10.2009 and numbered 37726/27756 (Süzek, p. 621-622).