Learn how service agreements work under Turkish law, including formation, employee and employer obligations, fixed-term and indefinite-term contracts, termination, transfer of workplace, confidentiality, and non-compete clauses.
Introduction
Service agreements under Turkish law are most closely associated with the service contract regulated in the Turkish Code of Obligations. Under Article 393, a service contract is a contract under which the employee undertakes to perform work for a definite or indefinite period in dependence on the employer, and the employer undertakes to pay remuneration based on time or the work performed. The same article also confirms that regular part-time work can fall within this category. This means the Turkish-law concept of a service agreement is strongly tied to the idea of subordinated work, not merely to the broad commercial idea of “providing services.”
That distinction is essential because not every agreement involving services is legally a “service contract” in the Turkish sense. Turkish law separately regulates the work contract in Article 470, under which the contractor undertakes to produce a work and the customer undertakes to pay a price, and the mandate contract in Article 502, under which the mandatary undertakes to handle a task or transaction for the principal. In other words, Turkish law separates dependent labor from independent production of a result and from mandate-style performance of tasks.
This matters in practice because parties often use the English term service agreement very broadly. But under Turkish law, classification is critical. If the real relationship is one of subordination, ongoing personal performance, and wage payment, then the legal framework for a service contract may apply even if the document is called something else. This point is reinforced by the Labour Act No. 4857, whose Article 1 states that it regulates the working conditions and work-related rights and obligations of employers and employees working under an employment contract, and whose Article 2 defines the employee, employer, and employment relationship.
For that reason, a proper guide to service agreements under Turkish law should not treat the subject as a generic commercial template issue. The real questions are whether the relationship is one of employment or independent contracting, how the contract is formed, what duties arise for the employee and employer, how wages and working conditions are handled, and how the relationship ends. This article explains those issues in practical English and with a focus on the core Turkish statutory framework.
The Legal Framework for Service Agreements in Turkey
The primary source is the Turkish Code of Obligations No. 6098, which regulates service contracts in the chapter beginning with Article 393. The Labour Act No. 4857 also plays a major role, because it regulates working conditions and work-related rights and obligations for employees working under an employment contract. Together, these two sources shape the legal treatment of service agreements where the relationship is truly one of dependent labor.
The broader background is still general contract law. Article 26 of the Turkish Code of Obligations allows parties to determine contract content freely within legal limits, while Article 27 provides that contracts contrary to mandatory law, morality, public order, personal rights, or involving an impossible subject matter are definitively void. This means parties may structure their service relationship contractually, but not in a way that escapes mandatory employment-related protections where those protections apply.
Turkish law also anchors contractual relationships in the good faith principle. Article 2 of the Turkish Civil Code states that everyone must comply with the rules of honesty while exercising rights and performing obligations, and that the legal order does not protect the manifest abuse of a right. In service-agreement disputes, this principle influences interpretation, enforcement, termination behavior, and the use of contractual rights.
What Makes a Service Agreement a Service Contract?
Article 393 is the central starting point. It defines the service contract as one where the worker performs work under the employer’s dependence for a definite or indefinite period and the employer pays remuneration based on time or the work done. The concept of dependence is therefore not incidental. It is what separates the service contract from many independent commercial arrangements.
This helps explain why Turkish law distinguishes the service contract from the work contract and the mandate contract. Under Article 470, a work contract is about producing a specific work or result for a price. Under Article 502, a mandate contract is about handling a task or transaction for another person, with mandate rules also applying to non-regulated service-performance contracts to the extent appropriate. If the real agreement is result-oriented and independent, or task-oriented without subordination, the legal consequences may differ substantially from those of a service contract.
In practice, that means a Turkish-law “service agreement” must be read through its actual structure, not just its title. If one side is integrated into the other’s organization, performs personally, works under direction, and receives wage-type remuneration, the relationship may fall within the service-contract and employment framework even if the text uses different language. The Labour Act’s definition of employee and employment relationship reinforces that focus on the substance of the working relationship.
Formation of the Service Agreement
Article 394 states that, unless the law provides otherwise, the service contract is not subject to a special form. So Turkish law does not require every service agreement to be notarized or follow a special execution ceremony. The same article also states that if a person performs work for a certain time in circumstances where the work would normally be done only for remuneration, and the employer accepts that work, a service contract is deemed to have been formed between them.
This is a very important practical rule. Turkish law does not let parties easily avoid the existence of a service relationship merely by failing to sign a formal written contract. If the factual circumstances show dependent work in return for remuneration and that work is accepted, the law may treat the contract as formed. That means substance can prevail over paperwork.
Article 394 adds an even more striking consequence: if a service contract is later found to be invalid, it still produces the effects of a valid service contract until the service relationship is removed. This is a highly protective rule. It prevents the entire employment relationship from being treated as though it never existed in a way that would unfairly destroy accrued rights.
The Employee’s Core Obligations
The first duty is personal performance. Article 395 states that unless otherwise understood from the contract or the circumstances, the employee must perform the work personally. This reflects the personal and trust-based nature of the service contract. The employer is usually engaging the employee’s own labor, not just any substitute labor.
The second major duty is the duty of care and loyalty. Article 396 requires the employee to perform the work carefully and act loyally in protecting the employer’s legitimate interests. The same article states that the employee must properly use the employer’s machinery, tools, technical systems, facilities, and vehicles and must take care of materials delivered for the work.
Article 396 also directly addresses competition during employment. It states that while the service relationship continues, the employee may not provide paid services to a third person in breach of loyalty and, in particular, may not compete with the employer. This means Turkish law already restricts competitive behavior during the ongoing employment relationship even before any separate post-employment non-compete clause is considered.
The same article is also a cornerstone of Turkish confidentiality law in employment. It states that the employee may not use for personal benefit or disclose information learned during the performance of work, especially production and business secrets, during the service relationship, and must continue to keep secrets after the relationship ends to the extent necessary to protect the employer’s legitimate interests. So even without a stand-alone NDA, Turkish law already imposes a statutory secrecy duty in the employment setting.
Article 397 adds another practical obligation: the employee must promptly deliver to the employer items, especially money, received from third parties for the employer in connection with the work and must account for them. The employee must also deliver to the employer anything gained through the performance of the service. This reinforces the fiduciary and accountable nature of the employment relationship under Turkish law.
Working Time and Extra Work
Article 398 regulates overtime work in the Turkish Code of Obligations framework and describes it as work beyond the normal period set in the relevant laws and performed with the employee’s consent, subject to urgent and necessary exceptions. This shows that even within the Code of Obligations, Turkish law treats working time and additional work as regulated matters rather than as entirely free bargaining territory.
At the same time, Article 402 provides that the employer must pay at least 50 percent more than normal wage for overtime work, although with the employee’s consent, time off proportionate to overtime may be provided instead. This rule is a practical reminder that compensation structure in service agreements under Turkish law is not simply whatever the stronger party chooses if the relationship is one of employment.
The Employer’s Core Obligations
The employer’s most obvious duty is to pay wages. Article 401 states that the employer must pay the wage set by the contract or collective labor agreement, and if the contract is silent, must pay at least the comparable wage, which may not be below the minimum wage. This means that silence on compensation does not eliminate the wage duty in a valid service relationship.
Article 406 states that, unless custom requires otherwise, wages are paid at the end of each month, though shorter payment periods may be set by contract or collective agreement. The same article also requires advances where a pressing necessity arises and the employer is able to pay according to equity. Turkish law therefore regulates not only the existence of wage obligations but also timing.
Article 407 protects wages operationally. It authorizes payment through bank accounts and states that employers who are placed under such obligation cannot pay wages outside those bank accounts. It also requires that a wage slip be provided in each payment period. In modern practice, this reflects the statutory emphasis on traceability and wage protection.
The employer also has equipment and expense obligations. Article 413 states that unless otherwise agreed or required by local custom, the employer must provide the tools and materials needed for the work. Article 414 adds that the employer must pay all expenses required by performance of the work and, where the employee is made to work outside the workplace, the expenses necessary for subsistence as well.
Turkish law also recognizes employer liability where the work cannot be performed because of the employer. Article 408 states that if the employer prevents performance through its own fault or is in default in accepting the performance, it must still pay the wage and cannot later require the employee to make up the work, though saved expenses and substitute earnings are deducted. Article 409 provides a limited wage-protection rule where, in a long-term service relationship, the employee is unable to work for a relatively short period without fault due to illness, military service, or similar reasons.
Protection of the Employee’s Personality and Workplace Safety
Article 417 is one of the most important employer-side provisions in the Turkish Code of Obligations. It states that the employer must protect and respect the employee’s personality in the service relationship and ensure a workplace order consistent with good faith, including taking the necessary measures so that employees are not subjected to psychological or sexual harassment and that those who have been subjected to such harassment do not suffer further harm.
The same article also states that the employer must take every measure necessary for occupational health and safety, keep the tools and equipment complete, and that employees must comply with those measures. It further provides that damages arising from death, bodily injury, or violation of personality rights because the employer acted contrary to law or contract are governed by the rules on contractual liability. This makes Article 417 a central provision for workplace dignity and safety in Turkish service agreements.
Fixed-Term and Indefinite-Term Service Agreements
Turkish law distinguishes carefully between fixed-term and indefinite-term service contracts. Article 430 states that a fixed-term service contract ends automatically at the end of the term unless otherwise agreed. If it continues tacitly after expiry, it converts into an indefinite-term contract. The same article also allows either party to terminate a service contract lasting more than ten years after the tenth year with six months’ notice.
For indefinite-term service contracts, Article 431 gives both parties the right to terminate by observing notice periods. Article 432 then sets the notice periods: two weeks where service lasted up to one year, four weeks where it lasted from one to five years, and six weeks where it lasted more than five years. These periods cannot be shortened, though they may be increased contractually, and different contractual notice periods for the two sides are equalized upward to the longer one.
Turkish law also allows a probation period. Article 433 provides that the parties may include a probation period not exceeding two months, and during that time either party may terminate without notice and without compensation, while the employee’s wage and other accrued rights for days worked remain protected.
Protection Against Improper Termination
Article 434 states that where the right to terminate the service contract is abused, the employer must pay the employee compensation equal to three times the wage corresponding to the notice period. This is a significant rule because it shows Turkish law does not treat notice-based termination as unlimited managerial discretion. The right of termination must still be exercised properly.
Article 435 then regulates immediate termination for just cause. Either party may terminate immediately for justified reasons, and the terminating party must notify the reason in writing. The statute defines just cause broadly as all circumstances that make continuation of the service relationship objectively unreasonable under the rules of honesty. Article 436 adds that if the employer becomes insolvent and does not secure the employee’s rights within an appropriate time, the employee may also terminate immediately.
Article 437 provides that if the justified reason arose from one party’s breach of contract, that party must fully compensate the damage caused, taking into account all rights arising from the service relationship. Article 438 further provides remedies where the employer immediately terminates without just cause, including compensation measured by what the employee would have earned during the relevant notice or remaining contract period, subject to deductions and the possibility of additional court-awarded compensation capped at six months’ wages.
Transfer of the Workplace and Transfer of the Service Relationship
Articles 428 and 429 regulate changes on the employer side. Article 428 states that where the whole workplace or part of it is transferred to another person by legal transaction, the service contracts existing on the transfer date pass to the transferee together with all rights and obligations. For rights dependent on length of service, the employee’s start date with the transferor is taken as the basis. The transferor and transferee are jointly and severally liable for debts born before the transfer and due on the transfer date, though the transferor’s liability is limited to two years from the transfer date.
Article 429 separately states that a service contract can be permanently transferred to another employer only with the employee’s written consent. With the transfer, the transferee becomes the employer side of the service contract together with all rights and obligations. This is a very important employee-protection rule: the employer side of the service contract cannot simply be moved around freely without the worker’s written approval where the transaction is a direct transfer of the contract itself.
Non-Compete Clauses in Service Agreements
Turkish law also permits post-employment non-compete obligations, but only under strict rules. Article 444 states that an employee with legal capacity may undertake in writing to refrain from competing with the employer after the contract ends, including by opening a competing business, working for a competitor, or entering another kind of interest relationship with a competing business. However, the clause is valid only if the employment relationship gave the employee access to customer circles, production secrets, or information about the employer’s business, and use of that information could cause significant harm to the employer.
Article 445 then limits the covenant by place, time, and type of work and states that it may not unfairly endanger the employee’s economic future. As a rule, the duration may not exceed two years, except in special circumstances, and the judge may narrow an excessive clause taking all circumstances into account. Article 447 adds that the non-compete ends if the employer no longer has a real interest in maintaining it or if the employer terminated without just cause, or the employee terminated for a reason attributable to the employer.
This means a post-employment non-compete clause in a Turkish service agreement is not just a template add-on. It is a highly regulated restriction that must be justified by a legitimate business interest and kept proportionate.
Limitation Periods for Service-Related Monetary Claims
Turkish law also sets limitation rules relevant to service agreements. Article 147 of the Turkish Code of Obligations states that wage claims and other periodic performances are subject to a five-year limitation period. This is an important practical rule for claims involving unpaid salary, periodic remuneration, and similar recurring entitlements.
Practical Drafting Lessons
A Turkish-law service agreement should first be classified correctly. If the relationship is genuinely one of dependent labor, parties should not assume that calling it a consultancy or service agreement will automatically remove it from the service-contract and employment framework. Turkish law looks to the real structure of the relationship, especially dependence and wage-based performance.
It is also important to draft the core economic and operational terms clearly: role, remuneration basis, payment timing, tools and materials, expense handling, confidentiality, reporting duties, termination mechanics, and where relevant, transfer and non-compete language. Turkish law supplies many default rules, but a well-drafted agreement reduces the need to rely on judicial reconstruction later.
Finally, employers should remember that some protections arise by statute even without detailed drafting, especially loyalty, confidentiality, wage protection, workplace safety, and certain termination consequences. The best Turkish-law service agreement is therefore not the one that tries to contract around the law, but the one that fits the statute and documents the real employment relationship coherently.
Conclusion
Service agreements under Turkish law are best understood through the statutory concept of the service contract, which is built around dependent work and wage payment. The Turkish Code of Obligations defines the relationship, regulates its formation, imposes personal performance and loyalty duties on the employee, imposes wage, expense, dignity, and safety duties on the employer, distinguishes fixed-term and indefinite-term contracts, structures notice and immediate termination, protects employees in transfers of workplace or employer, and strictly controls post-employment non-compete clauses. Many such relationships also fall within the scope of the Labour Act No. 4857, which broadly regulates employment relationships in Turkey.
The practical takeaway is simple. In Turkey, a service agreement is not just any agreement about services. If the relationship is one of subordinate work, Turkish law brings a structured employment-style regime with mandatory protections, interpretive discipline, and significant consequences for wages, termination, confidentiality, and non-compete obligations. Correct classification and careful drafting are therefore essential from the beginning.
FAQ
What is a service agreement under Turkish law?
Under Article 393 of the Turkish Code of Obligations, a service contract is an agreement under which the employee undertakes to perform work for a definite or indefinite period under the employer’s dependence, and the employer undertakes to pay remuneration based on time or the work performed.
Does a service agreement have to be in writing in Turkey?
As a general rule, no special form is required for the formation of a service contract unless the law provides otherwise. Article 394 states that the service contract is not subject to a special form, though a written contract is highly advisable in practice.
What is the difference between a service contract and an independent contractor arrangement?
A service contract under Article 393 is built on dependence and wage-based work. By contrast, Article 470 regulates the work contract, which focuses on producing a work for a price, and Article 502 regulates the mandate contract, which concerns carrying out a task or transaction.
What duties does the employee owe under Turkish law?
The employee owes personal performance, care, loyalty, non-competition during employment, confidentiality regarding business and production secrets, and duties of delivery and accounting for items or money received in connection with the work.
What duties does the employer owe?
The employer must pay wages, provide tools and materials unless otherwise agreed or required by custom, reimburse necessary work expenses, protect the employee’s personality, maintain workplace order consistent with good faith, and take necessary occupational health and safety measures.
How can a service agreement be terminated in Turkey?
Fixed-term service contracts generally end automatically at term expiry under Article 430. Indefinite-term contracts may be terminated with statutory notice periods under Articles 431 and 432. Immediate termination for just cause is governed by Article 435.
Are post-employment non-compete clauses valid?
Yes, but only under strict conditions. Article 444 requires legal capacity, written form, and a legitimate interest based on access to customer circles, production secrets, or business information that could cause significant harm if used. Articles 445 and 447 limit and may terminate the restriction.
How long is the limitation period for wage claims?
Article 147 provides a five-year limitation period for wage claims and other periodic performances.
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