What Is an Employment Contract? Types of Employment Contracts and Employee Rights

Meta Title: What Is an Employment Contract? Types of Employment Contracts and Employee Rights

Meta Description: What is an employment contract and what types are there? Learn about fixed-term and indefinite-term employment contracts, employee rights, employer obligations, foreign employees, and employment contracts for foreign employers.

Keywords: employment contract, what is an employment contract, types of employment contracts, fixed-term employment contract, indefinite-term employment contract, employee rights, foreign worker, foreign employee, foreign employer, work permit

What Is an Employment Contract?

One of the most important legal documents forming the basis of the employment relationship between an employee and an employer is the employment contract. An employment contract is a legal agreement under which an employee agrees to work for an employer for a definite or indefinite period, while the employer agrees to pay the employee in return for the work performed.

In Türkiye, the fundamental legal framework governing employment contracts is established primarily by Labor Law No. 4857, the Turkish Code of Obligations, and other relevant legislation.

An employment contract is not merely a document specifying how much salary an employee will receive. Many matters, including the employee’s duties, workplace, working hours, method of payment, leave entitlements, overtime, duration of the contract, and termination conditions, are connected to the employment contract.

Preparing the contract in a clear and understandable manner is particularly important for preventing potential disputes between the employee and employer in the future.

When foreign employees are employed in Türkiye, the importance of the employment contract becomes even greater. In addition to the employment contract, matters such as work permits, work permit exemptions, social security, and the foreign employee’s legal status in Türkiye may also arise.

What Are the Essential Elements of an Employment Contract?

Certain fundamental elements must exist for an employment relationship to be considered an employment contract.

The most important of these are performance of work, remuneration, and dependency.

Obligation to Perform Work

The employee is required to perform the work specified under the employment contract. The nature of the work may be expressly defined in the contract, while the employee’s duties and the activities of the workplace may also be taken into consideration.

Remuneration

One of the employer’s fundamental obligations is to pay the employee in return for the work performed. The amount of the wage, payment period, and any additional payments should be stated as clearly as possible in the employment contract.

Dependency

One of the important elements distinguishing an employment contract from certain other service relationships is the element of dependency. The employee works within the employer’s organizational structure and under the employer’s direction and supervision.

The existence of these three elements together is important when determining the legal nature of the relationship.

Does an Employment Contract Have to Be in Writing?

It cannot be said that every employment contract must necessarily be made in writing.

Under Labor Law No. 4857, employment contracts are generally not subject to a specific form unless otherwise provided by law. However, employment contracts lasting one year or longer must be made in writing.

Even where there is no mandatory requirement for a written contract, there are circumstances in which the employer must provide the employee with a written document setting out the working conditions.

For this reason, preparing an employment contract in writing is highly important in practice.

A written contract can help reduce disputes between the parties concerning:

• wages,
• working hours,
• job duties,
• leave,
• overtime,
• workplace location,
• duration of the contract,
• termination conditions.

What Information Should an Employment Contract Contain?

The content of an employment contract may vary depending on the nature of the work. However, a well-prepared employment contract should contain clear and understandable provisions whenever possible.

Generally, the contract should include:

• Identification details of the employee and employer
• Workplace address
• Employee’s position and job description
• Start date
• Type of employment contract
• Wage and payment method
• Working hours
• Weekly working hours
• Overtime conditions
• Annual leave and other types of leave
• Provisions concerning a probationary period, if applicable
• Conditions for termination of the contract
• Workplace rules applicable to the employee
• Confidentiality or non-compete provisions, where applicable
• Signatures of the parties

Every provision of the employment contract must comply with applicable legislation. The fact that the parties have included a particular provision in the contract does not necessarily mean that the provision will be legally valid in all circumstances.

What Are the Types of Employment Contracts?

Employment contracts can be classified according to various criteria. The most common types include indefinite-term employment contracts, fixed-term employment contracts, full-time employment contracts, part-time employment contracts, on-call employment contracts, and remote-working contracts.

Indefinite-Term Employment Contract

An indefinite-term employment contract does not specify in advance when the employment relationship will end.

Indefinite-term employment contracts are very common in Türkiye.

An indefinite-term contract may be preferred when the employee and employer intend to establish a long-term employment relationship.

When an indefinite-term contract is terminated, provisions concerning termination, notice periods, severance pay, and, depending on the circumstances, job security may become relevant.

Fixed-Term Employment Contract

A fixed-term employment contract is one in which the duration of the contract or the date on which it will end is definite or determinable.

However, an employer cannot simply use a fixed-term employment contract for every employment relationship.

Under Labor Law No. 4857, the existence of the statutory requirements and an objective, essential reason is important for entering into a fixed-term employment contract.

For example, the completion of a specific project, performance of a specific temporary task, or occurrence of a certain event may constitute an objective reason justifying a fixed-term contract.

Repeated renewals of fixed-term employment contracts must also be evaluated carefully. If successive fixed-term contracts are concluded without an essential reason, different legal consequences may arise regarding the legal nature of the employment relationship.

Full-Time Employment Contract

Under a full-time employment contract, the employee works in accordance with the normal working hours of the workplace.

Under Labor Law No. 4857, the general weekly working time is a maximum of 45 hours, unless otherwise agreed, and this period is generally distributed among the working days of the week.

However, the distribution of working hours, averaging arrangements, and special workplace conditions must also be evaluated separately.

Part-Time Employment Contract

In part-time employment, the employee works for a significantly shorter period than a comparable full-time employee.

Part-time employment may be preferred by various groups, including:

• students,
• retirees,
• individuals with family responsibilities,
• individuals who wish to work a second job.

Part-time employees should not automatically be considered to have fewer rights than other employees merely because they work fewer hours.

The principle of equal treatment and rights proportional to the employee’s working time must be evaluated in accordance with the applicable rules.

On-Call Employment

On-call employment is a special form of employment based on the employee working when their services are needed.

Under this model, the time and duration of work may be determined in the employment contract.

On-call employment may be used particularly in the service sector and in seasonal or periodic work.

However, an on-call employment relationship must also comply with the mandatory provisions of Labor Law concerning working hours, wages, and other employment rights.

Remote-Working Employment Contract

With the development of technology, remote working has become an increasingly important form of employment.

Remote working is a form of employment in which the employee performs their work outside the workplace, such as from home, using technological communication tools, within the organizational structure established by the employer.

In a remote-working contract, it is particularly important to clearly regulate matters such as:

• job description,
• method of performing the work,
• working hours,
• communication methods,
• wages,
• use of work equipment,
• data security,
• occupational health and safety.

What Is a Probationary Employment Contract?

At the beginning of an employment relationship, the employee and employer may agree on a probationary period in order to evaluate whether the employment relationship is suitable for both parties.

A probationary period allows both the employee and employer to assess whether the employment relationship meets their expectations.

Under Labor Law No. 4857, the probationary period may generally not exceed two months. However, this period may be extended up to four months through a collective bargaining agreement.

Termination during the probationary period is subject to specific rules under the law.

It is important to note that an employee does not lose all employment rights during the probationary period. The employee is entitled to wages for the period during which they actually work.

How Is Remuneration Determined in an Employment Contract?

Wages are one of the most important elements of an employment contract.

The employer is required to pay the employee in return for the work performed. One of the fundamental rules concerning remuneration is that payment cannot be made below the legally applicable minimum wage.

The employment contract should clearly regulate payments such as:

• monthly salary,
• hourly wage,
• bonuses,
• premiums,
• transportation allowances,
• meal allowances,
• other benefits.

It is important not to think of remuneration solely as the employee’s “salary.” An employee may also have various monetary rights arising from legislation, the employment contract, or established workplace practices.

Employment Contracts and Working Hours

It is important to clearly specify working hours in the employment contract.

In Türkiye, the general weekly working time is 45 hours. However, the distribution of these hours across the days of the week, daily working hours, break periods, and averaging arrangements must also be evaluated.

Where an employee works beyond the normal working hours, provisions concerning overtime may become applicable.

Therefore, when preparing an employment contract, the employer should clearly define the working schedule and monitor actual working hours in compliance with applicable legislation.

Termination of an Employment Contract

An employment contract may end for various reasons.

These may include:

• mutual agreement between the parties,
• expiration of a fixed-term contract,
• resignation by the employee,
• termination by the employer,
• termination for just cause,
• other legally recognized grounds for termination.

The legal method used to terminate the contract is extremely important.

For example, when an employer terminates an employment contract, different legal consequences may arise concerning notice periods, severance pay, job security, and reinstatement, depending on the circumstances.

Therefore, simply stating that “the employee was dismissed” is not sufficient from a legal perspective. The reason for termination, the method used, timing, employee’s length of service, and workplace conditions must be evaluated together.

Employment Contracts for Foreign Employees

When employing a foreign employee in Türkiye, preparing the employment contract requires consideration of certain additional issues beyond those applicable to ordinary employment contracts.

First, it must be determined on what legal basis the foreign national has the right to work in Türkiye.

If the foreign national is subject to a work permit requirement, allowing the person to begin actually working without obtaining the necessary permit may result in significant legal and administrative consequences for the employer.

Therefore, when preparing an employment contract for a foreign employee, the following matters should be carefully considered:

• foreign employee’s passport and identification details,
• job description,
• workplace,
• remuneration,
• working hours,
• duration of the contract,
• work permit status,
• scope of the work permit, where applicable,
• social security procedures.

The Relationship Between a Work Permit and an Employment Contract

One of the most important distinctions concerning foreign employees is that an employment contract and a work permit are two different legal instruments.

The employment contract regulates the private-law relationship between the employee and employer.

The work permit, on the other hand, concerns the public-law aspect of the foreign national’s right to work in Türkiye.

Therefore, signing an employment contract with a foreign employee does not, by itself, mean that the foreign national has the legal right to work in Türkiye.

It may also be important to determine the employer, workplace, and position for which the work permit was issued.

For example, if a foreign employee has a work permit for one employer but is employed by another employer, the scope of the work permit must be separately examined.

For this reason, it is extremely important that the employment contract and work permit information are consistent with each other when employing foreign workers.

What Should a Foreign Employer Consider When Preparing an Employment Contract?

The content of employment contracts is also highly important for foreign employers operating in Türkiye.

The fact that a foreign employer does not speak Turkish does not eliminate the requirement to prepare employment contracts in accordance with Turkish labor legislation.

In particular, where a foreign employer employs workers through a company or business operating in Türkiye, the employer must fulfill the obligations arising from its status as an employer.

The employer should:

• prepare employment contracts in compliance with applicable legislation,
• pay wages on time,
• comply with working-hour requirements,
• provide annual leave rights,
• fulfill social security obligations,
• comply with occupational health and safety regulations,
• follow the applicable termination rules when ending employment contracts.

If foreign employees are also working at the workplace of the foreign employer, their work permits and relevant legal statuses should be separately reviewed.

How Is the Wage of a Foreign Employee Determined?

When determining the wages of foreign employees, Turkish labor legislation and, where applicable, relevant work permit criteria should be taken into consideration.

The fact that an employee is a foreign national does not justify setting the employee’s wage at an unlawfully low level.

If an employer pays different wages to employees in the same or similar positions, it may be necessary to determine whether the difference is based on a legitimate and objective reason.

In particular, differences in wages or working conditions between foreign and Turkish employees based solely on nationality may raise issues under the principle of equal treatment.

However, objective factors such as the employee’s expertise, experience, position, seniority, performance, or additional responsibilities may justify differences in remuneration.

Leave Rights of Foreign Employees

The fact that a foreign employee works in Türkiye does not automatically deprive the employee of basic statutory leave rights under labor law.

Rights such as annual paid leave, weekly rest, national holidays, and public holidays should be evaluated within the framework of the applicable legislation.

However, the foreign employee’s legal status in Türkiye and the nature of the employment contract must also be taken into account.

An employer should not adopt the approach that a foreign employee has no right to leave simply because the employee is a foreign national.

Termination of an Employment Contract of a Foreign Employee

The termination of a foreign employee’s employment contract is also generally evaluated under the applicable labor-law rules.

If an employer wishes to terminate an employment contract with a foreign employee, the reason for termination, type of contract, employee’s length of service, and other statutory requirements must be taken into account.

In addition, circumstances affecting the foreign national’s work status, such as the expiration or loss of validity of a work permit, may need to be evaluated separately.

Therefore, the termination of a foreign employee’s employment contract should not simply be reduced to the statement that “the work permit has expired.”

Both labor law and the legislation governing foreign nationals’ right to work should be evaluated together in the specific circumstances of the case.

Common Mistakes When Preparing an Employment Contract

Certain mistakes made when preparing employment contracts can lead to serious disputes in the future.

Some of the most common mistakes include:

Unclear Job Description

If the employee’s duties are not clearly defined, disputes may arise regarding changes to duties and the limits of the employer’s managerial authority.

Failure to Clearly Specify Remuneration

It should be clearly stated whether the wage is gross or net, as well as the scope of additional payments and payment dates.

Failure to Specify Working Hours

Leaving working hours and work schedules unclear may result in disputes concerning overtime and wages.

Failure to Check the Foreign Employee’s Work Permit

One of the most important mistakes concerning foreign employees is allowing them to start working without adequately checking their work permit status.

Including Provisions Contrary to Law

Not every provision included in an employment contract is automatically valid. Provisions that violate mandatory rules of labor legislation may create legal problems.

What Should Be Considered When Preparing an Employment Contract?

A well-prepared employment contract should not merely be a standard document containing the signatures of the parties.

When preparing the contract, the actual conditions of the employment relationship should first be determined.

The employee’s duties, workplace, remuneration, working hours, and duration of the contract should be clearly specified.

For foreign employees, the work permit and the foreign national’s legal status should also be examined in addition to these matters.

Preparing the contract in accordance with both Turkish law and the specific conditions of the employment relationship is extremely important for preventing future disputes.

Frequently Asked Questions

What is an employment contract?

An employment contract is an agreement under which an employee undertakes to perform work under the direction and supervision of an employer, while the employer undertakes to pay wages in return.

Does an employment contract have to be in writing?

Not every employment contract must be in writing. However, employment contracts lasting one year or longer must be made in writing. Certain special types of employment contracts may also be subject to written-form requirements.

What is the difference between a fixed-term and an indefinite-term employment contract?

A fixed-term employment contract has a definite or determinable duration or termination date, whereas an indefinite-term employment contract does not have a predetermined termination date.

Can an employment contract be concluded with a foreign employee?

Yes. However, the foreign employee’s work permit or work permit exemption requirements must also be evaluated to determine whether the person can legally work in Türkiye.

If a foreign employee has a work permit, does an employment contract still need to be concluded?

A work permit and an employment contract are different legal instruments. A work permit concerns the foreign national’s right to work, while an employment contract concerns the employment relationship between the employee and employer. Therefore, the legal requirements applicable to both must be evaluated separately.

Can a foreign employer employ workers in Türkiye?

Foreign employers operating in Türkiye may employ workers provided that they comply with the applicable legal requirements. As employers, they must fulfill their obligations under Turkish labor legislation.

Can a foreign employee be subject to the same employment contract as a Turkish employee?

Depending on the nature of the employment relationship, Turkish labor-law rules may apply to a foreign employee. However, the requirements of work permit legislation and international labor-force regulations must also be considered.

Are foreign employees entitled to annual leave?

Foreign employees should not automatically be deprived of employment-related leave rights simply because they are foreign nationals. Leave rights should be evaluated according to the employment contract and applicable legislation.

Conclusion

An employment contract is one of the most important legal documents forming the foundation of the employment relationship between an employee and an employer. Properly preparing the contract ensures that the parties’ rights and obligations concerning wages, working hours, job duties, leave, overtime, and termination of employment are clearly established.

Different types of employment contracts, including fixed-term, indefinite-term, full-time, part-time, on-call, and remote-working contracts, have their own specific legal characteristics. Therefore, employers should determine the type of contract that corresponds to the actual nature of the employment relationship.

For foreign employees, additional matters such as work permits, work permit exemptions, social security, and the foreign national’s legal status in Türkiye must also be considered.

In particular, it is important to remember that an employment contract and a work permit are not the same legal instrument. Signing an employment contract with a foreign national does not, by itself, create a legal right to work in Türkiye where a valid work permit is required.

Likewise, foreign employers employing workers in Türkiye must comply with the obligations arising from their status as employers. The fact that the employer is a foreign national does not eliminate the application of Turkish labor-law rules.

In conclusion, when preparing an employment contract, it is not sufficient merely to put the commercial or working conditions agreed upon by the parties into writing. The contract must be compatible with Labor Law No. 4857, the Turkish Code of Obligations, social security legislation, and, where foreign employees are involved, the applicable international labor-force legislation.

A properly prepared employment contract makes an important contribution both to protecting employee rights and to reducing the legal risks that an employer may face in the future.