1. Legal Framework
Employment relationships between foreign employers and Turkish nationals working in Turkey are primarily governed by:
- Turkish Labor Law No. 4857
- Turkish Code of Obligations No. 6098
- Private International and Procedural Law (Law No. 5718 – PIL)
- Social Security Legislation
- Yargıtay (Turkish Supreme Court) precedents
- Bilateral social security agreements (if applicable)
📌 Even if the employer is not based in Turkey, if the place of work is in Turkey, Turkish labor law generally applies (PIL Art. 27–28).
2. Applicable Law in Employment Contracts
According to the Private International Law (PIL):
- Parties may agree on the applicable law (e.g., French law, English law).
- However, such a choice cannot override mandatory protections granted to the employee under Turkish law.
- If no legal choice is made, the law of the habitual workplace applies → Turkey.
⚠️ For example, if a Dubai-based company employs a Turkish software developer in its Istanbul office, Turkish labor law provisions will protect the employee.
3. Common Disputes in Practice
✅ Unjust or Unlawful Termination
- If the foreign employer terminates the contract without valid or just cause, the employee can file for reinstatement or claim compensation.
✅ Severance and Notice Pay
- Employees working for more than one year are entitled to severance pay.
- If the employer fails to provide proper notice, notice compensation is also payable.
✅ Annual Leave, Overtime, and Weekly Rest Days
- These entitlements can be claimed via lawsuits, provided the 5-year statute of limitations is not exceeded.
✅ Unregistered Employment / Social Security Evasion
- If a foreign employer fails to register the employee with SGK (Turkish Social Security Institution), fines and administrative sanctions may apply.
4. Dispute Resolution Process
A) Mandatory Mediation
Since 2018, mediation is a mandatory precondition before filing a labor lawsuit in Turkey.
B) Labor Court Proceedings
If mediation fails:
- The employee may initiate proceedings before the Labor Courts.
- Evidence may include payroll slips, bank statements, emails, contracts, witness testimony, etc.
5. Sample Case
Scenario: A French IT firm terminates a Turkish software engineer’s employment in its Istanbul office without explanation.
Legal Evaluation:
- Even if the contract designates French law, Turkish law prevails for mandatory employee protections.
- The employee may seek severance pay, notice compensation, and unused leave payments.
- The process starts with mediation, followed by a lawsuit if needed.
6. Yargıtay’s Approach (Turkish Supreme Court)
The Turkish Supreme Court generally holds that when an employee is a Turkish citizen working in Turkey, mandatory provisions of Turkish labor law apply, even if foreign law is selected.
“Even if the parties choose a foreign law in the employment contract, the employee’s rights arising from Turkish mandatory labor law shall prevail if the employee is a Turkish citizen working in Turkey.”
— Yargıtay 9th Civil Chamber, 2018/9343 E., 2019/11857 K.
7. Conclusion and Legal Assessment
Foreign employers operating in Turkey or employing Turkish workers should:
- Ensure all employment contracts comply with Turkish labor law
- Follow proper termination procedures with documented justification
- Fulfill all SGK registration and reporting obligations
📌 Recommendations:
- Seek legal counsel before hiring or terminating employees.
- Keep all employment documentation organized and up to date.
- Maintain proper payroll, leave, and social security records.
Prepared by:
Attorney Ferhat Küle
Istanbul Bar Association
Labor Law & Foreign Investment Advisor
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