The Employer's Right to Terminate for Valid Cause Arising from the Employee's Conduct

Introduction

Under Turkish law, Labor Law No. 4857 (“Labor Law”) and the relevant sub-legislation regulate the termination of employment contracts both for valid cause and just cause. However, despite these detailed regulations, situations may arise in which a termination is deemed unjust.

This article examines the employer's right to terminate for valid cause in circumstances that do not fall within the scope of termination for just cause as regulated in Article 25 of the Labor Law. Specifically, it addresses employer’s termination for valid cause due to the employee’s conduct or incompetence stemming from negligence, fault, or failure to fulfill their duty of care.

Termination for Valid Cause by the Employer

Under Turkish law, when terminating an indefinite-term employment contract of an employee who has worked for at least six (6) months in a workplace employing thirty or more workers, the employer must have a valid cause. This requirement arises from the principle of “job security,” which applies to all employees except employer representatives who manage and administer the entire business and have the authority to hire and dismiss employees.[1] It is important to note that the six (6) month seniority requirement does not apply to workers employed in underground work.

From the employer's perspective, a “valid cause” must arise from the employee's competence or conduct, or from the requirements of the business, workplace, or work. This criterion reflects the European Social Charter in the Turkish Labor Law. However, the Labor Law explicitly prohibits this valid cause from stemming from the following reasons:

• Participating in union activities outside of union membership or working hours, or during working hours with the employer's consent.
• Serving as a union representative at the workplace.
• Filing a complaint with administrative or judicial authorities against the employer or participating in proceedings already initiated in order to pursue rights or fulfill obligations arising from the law or a contract.
• Race, color, gender, marital status, family responsibilities, pregnancy, childbirth, religion, political views, and any such reasons.
• Absence from work during periods when the employment of female workers is prohibited, as stipulated explicitly by law.
• Temporary absence from work during the period prescribed when illness or accident renders illness untreatable or when the Health Board determines that the worker's presence at the workplace is inadvisable.[2]

Termination by the Employer Due to the Employee's Conduct, Productivity, or Inadequacy

Excluding the reasons stated above, employers have the authority and right to terminate the employment contract based on a valid reason in cases where the employee causes damage to the employer—specifically, without malicious intent—due to reasons stemming from the employee’s conduct or competence, such as negligence, carelessness, failure to adequately fulfill the duty of loyalty, or insufficient performance of their duties concerning the order of the workplace and the operational continuity. According to the Court of Cassation's opinion, in cases of employee incompetence, the employee's fault is not a prerequisite for termination.[3]

• In cases where the continuation of the employment relationship cannot be reasonably expected from the employer's perspective, the termination is deemed to be based on a valid cause.
• A separate criterion is that this situation must be a reason that significantly negatively affects the performance of work at the workplace. The employee's negative behavior must be a fault that breaches the employment contract and negatively affects the employment relationship.[4] If the employee's socially negative behavior, negligence, or incompetence does not have any negative impact on workplace production and the employment relationship, it cannot be considered a valid cause for termination.

The rationale of the Labor Law refers to situations arising from employee incompetence as (i) the employee working less efficiently than others performing similar tasks on average, (ii) performing below expectations relative to their qualifications[5], (iii) a gradual decrease in their focus on work or a determination that they are not suited for the job[6], (iv) failing to develop sufficiently as required by the job description and training, (v) frequent illness[7], (vi) having an illness that, while not rendering the employee unable to work, continuously affects their ability to perform their job properly, or (vii) lack of compliance[8].

Furthermore, situations arising from the employee's behavior include: (i) causing damage to the employer or creating concern that such damage may recur, (ii) inciting other employees against the employer, (iii) performing the job inadequately, poorly, or insufficiently despite warnings[9],  (iv) acting in a manner that negatively impacts the workflow and work environment at the workplace, (v) making long phone calls that interrupt the flow of work, (vi) frequently arriving late to work and wandering around the workplace, neglecting one's duties[10]; (vii) serious incompatibility with supervisors or coworkers, (viii) frequently and unnecessarily engaging in arguments, etc. Although these examples are listed in the rationale of the Labor Law, they are not exhaustive.[11]

Regarding the aspects of the aforementioned examples and criteria that are taken into consideration in Turkish courts, first of all, it is important to note that “The purpose of termination due to the employee's conduct is not to punish or penalize the employee for previous conduct that was contrary to the contract; it is to avoid the risk of the employee continuing to breach their contractual obligations or repeating such conduct. (…) In cases where the reasons stem from the employee's conduct or incompetence, and where it is unreasonable to expect the employer to continue the employment relationship, it must be accepted that the termination is based on valid causes. (…) Breaches of contract caused by the employee's fault (whether intentional or negligent) are relevant to the termination of the contract. For a valid reason for termination to be established, it is not necessary for the employee to have intentionally breached their contractual obligations. It is sufficient that they breached their duty of care through negligent behavior.”[12] This recent decision by the Court of Cassation emphasizes that the risk of the employer suffering damage due to the employee's conduct constitutes a valid cause. Termination for valid cause is possible in situations where continuing the employment relationship is no longer reasonable for the employer and the trust relationship has been damaged. Furthermore, the employee's negligence, incompetence, or negative behavior need not be intentional. Even negligence that constitutes a breach of the employee's duty of care towards the employer is considered sufficient.

Procedure and Timeframe for Termination for Valid Cause

Pursuant to International Labor Organization (ILO) Convention No. 158 and the explicit provisions of the Labor Law, an indefinite-term employment contract cannot be terminated for valid cause based on the employee's conduct or productivity without hearing the employee's defense. The Court of Cassation rulings emphasize that in cases such as employee incompetence or low productivity, the employer must obtain the employee's defense in order to exercise their right to terminate for valid cause. Furthermore, the procedure for obtaining the defense is clearly specified: “The employee's defense must be obtained before the termination of the contract. The employee must be invited to provide a defense before termination, and the invitation letter must clearly and explicitly state the reasons based on their conduct or performance, specify a reasonable period of time in advance, and indicate the place, date, and time at which they must be present. If they fail to appear, they must be reminded that they may submit a written defense; if they fail to appear at the specified place on the specified date and time and nevertheless fail to submit a written defense, they shall be deemed to have waived their right to defend themselves.”[13] Case law holds that requesting the employee's defense together with the termination notice, after termination, or failing to obtain the defense before termination will, in itself, render the termination null and void.

Once this requirement is fulfilled, the termination notice must be served on the employee in compliance with the statutory notice periods set out in the Labor Law[14], clearly and explicitly stating the valid reason for termination. Employers who do not wish to fulfill the notice period may terminate the employment contract by paying the advance salary for the notice period.

Review and Conclusion

Where the above criteria are satisfied and the employer loses trust in the employee's ability to perform their job properly, the employer has the right to terminate the employment contract for valid cause, in accordance with the applicable notice periods and procedural requirements. However, the employer must also bear in mind that this does not prevent the employee from pursuing legal proceedings regarding the termination.  of their employment contract. Even if the employer terminates the employment contract for a valid cause and in compliance with procedure employee's right to file a lawsuit under Turkish law will always prevail. If the employer wishes to eliminate the possibility of the employee filing a lawsuit, they may also choose to terminate the employment contract by mutual rescission agreement. In any case, if the employer terminates the employment contract for a valid cause arising from the employee's conduct and competence, the performance evaluation criteria must be predetermined and communicated to the employee. A Performance Evaluation System should be developed and implemented to evaluate employees' workplace-specific performance.[15] It is crucial for future labor lawsuits that the employer maintain records and documentation evidencing the employee's poor performance, that the employer has given the employee an opportunity to defend themselves, and that the necessary documentation is completed.

References

(Only in Turkish) 22nd Civil Chamber of Court of Cassation, E. 2011/4093, K: 2011/7195 Numbered Decision. (2011, 12 12).

(Only in Turkish) 22nd Civil Chamber of Court of Cassation, E. 2012/1291, K. 2012/15916 Numbered Decision. (2012, 07 06).

(Only in Turkish) 22nd Civil Chamber of the Court of Cassation, 2017/35020 E., 2017/13877 K. Numbered Decision. (2017, 06 12).

(Only in Turkish) 22nd Civil Chamber of the Court of Cassation, E. 2013/25813, K. 2014/35243 Numbered Decision. (2014, 12 11).

(Only in Turkish) 22nd Civil Chamber of the Court of Cassation, E. 2016/491, K. 2016/3411 Numbered Decision. (2016, 02 10).

(Only in Turkish) 7th Civil Chamber of Court of Cassation, E. 2014/12322, K. 2014/19586 Numbered Decision. (2014, 10 28).

(Only in Turkish) 9th Civil Chamber of Court of Cassation, E. 2017/26377, K. 2018/12504 Numbered Decision. (2018, 06 04).

(Only in Turkish) 9th Civil Chamber of the Court of Cassation, E. 2023/12200, K. 2023/12412 Numbered Decision. (2023, 09 20).

(Only in Turkish) General Assembly of Case Law Unification of the Court of Cassation, E. 2017/9, K. 2018/10 Numbered Decision. (2018, 10 19).

(Only in Turkish) General Assembly of Case Law Unification of the Court of Cassation, E. 2017/9, K. 2018/10 Numbered Decision. (2018, 10 19).

(Only in Turkish) Labor Law (4857) - Article 19 Rationale. (n.d.). Retrieved from Lexpera: https://www.lexpera.com.tr/mevzuat/gerekceler/is-kanunu-madde-gerekceleri/1

(Only in Turkish) Labor Law No. 4857. (n.d.). Retrieved from Turkish Legislative Information System: https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=4857&MevzuatTur=1&MevzuatTertip=5

(Only in Turkish) The 9th Civil Chamber of Court of Cassation E. 2016/12678, K. 2017/8046 Numbered Decision. (2017, 05 08).

Duman, B. (2020). (Only in Turkish) In Accordance With Labour Law No.4857 Receiving The Defense of the Labor Contract. Inonu University Law Review, 11(1), pp. 1-17. Retrieved from https://dergipark.org.tr/tr/download/article-file/969215

Yıldız, M. Ş. (2021). (Only in Turkish) Legal Consequences of Job Security, Master of Laws Thesis. Retrieved from Council of Higher Education Thesis Center: https://tez.yok.gov.tr/UlusalTezMerkezi/TezGoster?key=tqUiYt63sTQLTpozMJ92QvcJ7SuCzQ4Yp5fVFGVu8Mfev68J5QDrp_aId15YegpH