Transferring employees on an outsourcing in Turkey: overview

A Q&A guide to outsourcing in Turkey.

This Q&A guide gives a high level overview of the rules relating to transferring employees on an outsourcing, including structuring employee arrangements (including any notice, information and consultation obligations) and calculating redundancy pay.

To compare answers across multiple jurisdictions, visit the Transferring employees Country Q&A tool.

This Q&A is part of the global guide to outsourcing. For a full list of jurisdictional Q&As, visit www.practicallaw.com/outsourcing-guide.

For the general rules relating to outsourcing, visit Outsourcing: Turkey overview.

Contents

Transferring employees

Transfer by operation of law

1. In what circumstances (if any) are employees transferred by operation of law?

Article 6 of the Turkish Labour Code provides that where a legal transaction implies the transfer of a workplace in whole or in part, the employment agreements of all the employees at the workplace, as well as all the associated rights and obligations, automatically transfer to the purchaser.

The Court of Appeals has established the following criteria to assess whether a transaction amounts to a workplace transfer implying an automatic transfer of employees:

  • Whether the tangible assets of the workplace have been transferred, such as building or movable assets.

  • The value of intangible assets of the workplace.

  • Whether the new employer has taken over all or a major part of the workforce in terms of numbers and skills.

  • Whether the customer portfolio has been transferred.

  • Whether the operations of the workplace are similar before and after the transfer.

  • Whether there has been an interruption in operations following the transfer.

It is essential that the transferee continues or resumes the same or similar business activity. The Court of Appeals has indicated that even a mere transfer of employees can constitute a workplace transfer to the extent the economic unity continues.

For outsourcings that do not fall under Article 6 of the Turkish Labour Code, the transfer of employment agreements requires the written consent of each employee.

Change of supplier

If a change of supplier results in transfer of business/workplace, the rules under Article 6 of the Turkish Labour Code apply.

Termination

If termination of an outsourcing agreement leads to the retransfer of the outsourced business from the supplier to the customer, the rules under Article 6 of the Turkish Labour Code apply.

 
2. If employees transfer by operation of law, what are the terms on which they do so?

If employees transfer by operation of law, all of the existing terms and conditions of the employment contracts are transferred. Under Article 6 of the Turkish Labour Code, the transferor and the transferee remain jointly liable for a period of two years from the date of the transfer for debts accrued in relation to the transferred employees (including salaries or overtime work pay) before the transfer date and that are due and payable on the transfer date. However, the transferor always remains liable for the severance payment obligations related to the term that the employee has worked at the transferor's workplace.

Redundancy pay

3. How is redundancy pay calculated?

Severance payments are equivalent to 30 days' gross salary (including continuous monetary benefits) for each full year of service, based on the most recent gross salary of the employee, with a cap currently set at TRY3,828.37. Severance payments are due to all employees with a seniority of more than one year, in case of termination by the employer for a valid reason or with a just cause such as health reasons or force majeure. They are also due in case of termination by the employee with just cause on retirement or disability, following marriage (for female employees), on departure to military service (for male employees) and on death of the employee. They are not due in case of termination by the employer with just cause related to the employee's behaviour. Workplace/business transfers under Article 6 of the Turkish Labour Code do not entitle the employees to severance pay as the employment agreements do not terminate but transfer. See Question 4.

Harmonisation

4. To what extent can a transferee harmonise terms and conditions of transferring employees with those of its existing workforce?

Under Article 22 of the Turkish Labour Code, if a workplace transfer results in a material change of working conditions (such as an aggravation of working conditions or a reduction of salary, according to case law), the transferred employee is entitled to terminate the employment agreement and request severance payment from the employer.

Dismissals

5. To what extent can dismissals be implemented before or after the outsourcing?

Workplace/business transfers under Article 6 of the Turkish Labour Code do not constitute by themselves a just cause or valid reason for either the employer or the employee to terminate an employment agreement.

National restrictions

6. To what extent can particular services only be performed by a local national trained in your jurisdiction?

Certain activities under Turkish law can exclusively be performed by Turkish citizens, such as legal practice and customs operations, among others. Therefore, such works can only outsourced to local nationals.

Secondment

7. In what circumstances (if any) can the parties structure the employee arrangements of an outsourcing as a secondment?

In a workplace transfer, employment agreements transfer to the transferee. Therefore, the parties cannot structure the employee arrangements of an outsourcing as a secondment.

Information, notice and consultation obligations

8. What information must the transferor or the transferee provide to the other party in relation to any employees?

Although there are no specific stipulated legal obligations in this regard, it is advisable in practice for the transferor to provide to the transferee:

  • Unpaid due employee entitlement amounts.

  • Employment starting dates.

  • Details of working conditions.

 
9. What are the notice, information and consultation obligations that arise for the transferor and the transferee in relation to employees or employees' representatives?

There is no need for a workers' council approval or consultation under Turkish law. And there is no specific rule regarding notification. However, it is advisable to announce the transfer to the employees as, or before, the information becomes public.

 

Online resources

Directorate of Legislation Development and Publication

W www.mevzuat.gov.tr

Description. All of the laws of Turkey are available at the website with the most recent amendments.



Contributor profiles

Elvan Aziz, Partner

Paksoy

T +90 212 3664730
F +90 212 2902355
E eaziz@paksoy.av.tr
W www.paksoy.av.tr

Professional qualifications. Turkey

Areas of practice. Mergers and acquisitions; corporate and commercial; private equity; labour and employment; real estate.

Non-professional qualifications. Maltepe University, School of Law, University of Sheffield, School of Law, LL.B., Middle East Technical University, Sociology, BA

Recent transactions

  • Extensively advising sellers, strategic buyers and PE clients in M&A projects.
  • Advising clients regarding corporate and commercial issues, including corporate restructuring and restructuring of business, legal mergers and spin-offs and corporate governance.
  • Advising on employment law, including implementation of management incentive schemes, strategy building on HR aspects of restructuring or closure of business, preparation of employment agreements and internal bye-laws, dealings with the trade union as well as collective and individual termination of employees and top management.
  • Advising on structuring of real estate development, including residential, commercial property and hotel development, drafting and negotiating relevant project agreements for developers and investors, as well carrying out legal land due diligence to determine whether the property is fit for its purpose.
  • Advising on high profile and strategic transactions, including cross-border acquisitions and international joint ventures.
  • Acting for foreign and Turkish strategic investors and PEs in their acquisitions in Turkey, as well as advising selling shareholders in transactions of all sizes and sectors.

Languages. English

Professional associations/memberships. International Bar Association

Selen Terzi Ozsoylu, Senior Associate

Paksoy

T +90 212 3664741
F +90 212 2902355
E sterzi@paksoy.av.tr
W www.paksoy.av.tr

Professional qualifications. Turkey

Areas of practice. Mergers and acquisitions; corporate and commercial; labour and employment.

Non-professional qualifications. Galatasaray University, School of Law, LL.B., 2006

Recent transactions

  • Advising clients on due diligence reviews, drafting the transaction documents such as SPAs, SHAs, and other ancillary agreements.
  • Advising clients on compliance in pharmaceutical and medical device industries, monitors industry standards as well as legislation changes, and providing consultancy regarding relations with health care professionals and promotion of pharmaceuticals and medical devices.
  • Reviewing and/or drafting compliance procedures and SOPs, and realising compliance interviews.

Languages. English


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