- Entitlement to Overtime Payment
- February 16, 2017
- Law Firm: Erdem Erdem Law Office - Istanbul Office
Labor Law is a branch that is developed by jurisprudence rather than through codes and communiqués. Many notions of this branch have been formed through Court of Cassation decisions, and these notions are common in practice. One of these notions is white collar - blue collar employee distinction. Even though this distinction exists neither in the Labor Code, nor in any other code or communiqué, Turkish Law adopted this distinction, as is the case with all legal systems around the World, and Labor Code’s provisions are adapted to this distinction through jurisprudence. Another notion formed through Court of Cassation decisions in Labor Law is the equity reduction made in favor of the employer, and is related to overtime work. This article will shed light on white collar workers’ entitlement to overtime payment and equity reduction on overtime work payments.
Overtime Work Payments
Detailed information regarding overtime work was shared in our previous article. Within this scope, it was stated that the employees can make overtime work, only after their written approvals, and that these approvals are to be taken from the employees at the beginning of each year and retained in each employee’s personal file. Overtime payment for each hour of overtime work is calculated by increasing the normal hourly wage by 50%.
The application of these regulations differs between white collar employees - who gain a permanent salary each month, and blue collar employees - whose salary depends on the hours worked. As stated above, this difference is not caused by any code or communiqué, but by business course and jurisprudences.
Overtime Work Payments of White-Collar Employees
Working conditions for all employees, without making white-blue collar distinctions, are determined by the Constitution, Labor Code, legislation regarding occupational health and safety and related codes and communiqués, collective and individual labor contracts, as well as workplace practices. Within this scope, employees working more than their contractual hours as determined by the collective and individual labor contracts are entitled to overtime payment, and employees may be required to work a maximum of 270 hours of overtime work within any given calendar year.
As a common practice, and different than these regulations, employers place a clause in the labor contracts of white collar employees stating "overtime work payments are included in their monthly salary," and the employees’ salaries are determined in this manner. Through this clause, the employee gets only the contractual salary whether s/he works overtime or not. However, pursuant to Court of Cassation decisions, the application of these clauses remains limited because, in accordance with Article 41 of the Labor Code, the hours of overtime work cannot be more than 270 hours per year. This provision aims to protect employees. The Court of Cassation accepts that all employees should benefit this provision without considering the white collar - blue collar distinction.
Therefore, employers may add only 270 hours of overtime work to the contractual salary and an employee working overtime per year, and only 270 hours of this overtime work can be included in the yearly salary. If the employee proves that s/he has worked more than 270 hours per calendar year, then s/he can claim for compensation.
The points to be taken into consideration here are the existence of a clear regulation in the labor contracts, and that the employees should not be able to determine their working hours by themselves. As a result, white collar employees who do not have such a clear clause in their labor contracts shall be entitled to payment for every hour of their overtime work. Furthermore, the Court of Cassation decided that employees who are not taking instructions from managers or/and any other person, cannot demand overtime work payment because they determine their working hours by themselves in order to fulfill their duties. Within this scope, a senior manager, who commands high salary, and determines his/her own working hours and conditions, works in excess of 270 overtime hours per year, he/she is not entitled to overtime work payment.
The Court of Cassation acknowledges that working regularly for a long periods and overtime hours is against the normal course of life and human nature, and one cannot work for years without being ill or having a day off for a marriage, deaths, births, or any other special needs. Working continuously, without considering the production activities in the workplace, and the nature of the work undertaken by the employee, are not to be admissible, as well. In this regard, although there are no legal provisions governing the reduction from overtime work payment, the Court of Cassation finds it appropriate to make an equity reduction with a rate of 1/3 and 1/4 beyond overtime work payment calculated in this case.
Pursuant to Turkish law, the party who claims the overtime work is obliged to prove his/her claim, and may use any kinds of evidence, such as office records, internal correspondences, witnesses, etc. In the previous years, the Court of Cassation used to accept the equity reduction in any kind of cases, regardless of the usage of types of evidence. However, we should emphasize that the Court of Cassation amended its settled jurisprudences recently, and now adjudges that there shall not be any reduction in favor of the employer, if the employer proves its claims with written evidences and/or office records, instead of calling witnesses.
Labor contract provisions regarding the inclusion of 270 hours of overtime work payment per calendar year in employees’ salaries are valid. Employees who have this clause in their labor contracts are eligible for overtime payment only by exceeding the 270 hour limit, and proving this overtime work. In addition to these contractual regulations, the employee should not be determining his/her working hours by him/herself, and should be taking instructions for his/her work. If the employee proves his/her overtime work through witnesses, then the employers shall be entitled to an equity reduction at a rate of 1/3 or 1/4
 For more information http://www.erdem-erdem.av.tr/publications/law-post/overtime-work-and-working-with-extra-periods/ (Accessed on 22.10.2016)
 Decisions of 9th Chamber of Court of Cassation dated 25.10.2001 numbered 2001/10041 E., 2001/16651 K and dated 27.02.2013, numbered 2010/42421 E., 2013/7129 K. can be shown as an example.
 Decisions of 9th Chamber of Court of Cassation dated 01.04.2008 numbered 2007/33244 E., 2008/7135 K. and dated 30.01.2006, numbered 2005/20001 E., 2006/1763 K. can be shown as an example.
 Decision of 9th Chamber of Court of Cassation dated 27.02.2013 numbered 2010/42421E., 2013/7129 K can be shown as an example.
 Decision of General Chamber of Court of Cassation dated 04.02.2009 numbered 2009/9-2 E., 2009/48 K. and decision of 9th Chamber of Court of Cassation dated 27.01.2011 numbered 2009/1652 E., 2011/1044 K can be shown as an example.
 Decision of 9th Chamber of Court of Cassation dated 27.01.2011 numbered 2009/1652 E., 2011/1044 K. can be shown as an example.
 Decisions of 7th Chamber of Court of Cassation dated 27.04.2016 numbered 2015/1661 E., 2016/9561 K. and dated 28.03.2016 numbered 2015/6754E., 2016/7184 K can be shown as an example.