Termination of Employment Contracts: Key Considerations

Ending an employment relationship involves more than recording an employee’s departure. The reason for termination, the contract type, the form of notice and the dates on which the parties act can affect notice pay, severance, reinstatement and other claims. Compliance with a notice period does not, by itself, establish that every aspect of the dismissal is lawful.

This article concerns employment relationships governed by Turkish Labour Law No. 4857. Relationships governed by special legislation, including maritime and press employment, and fixed-term contracts require separate consideration.

Identify the contract and the way it ended

Termination of an indefinite-term contract differs from the expiry of a fixed-term contract. Resignation, dismissal and termination by mutual agreement also have different legal consequences. The heading on a document is only one part of the evidence; the parties’ actual intentions and the circumstances must be examined.

The starting documents include the employment contract, commencement date, job description, actual working arrangements and termination notice. A social-security exit code or a single letter may not explain the whole dispute.

Ordinary termination and immediate termination for just cause

Under ordinary termination, an indefinite-term contract generally ends after advance notice. Article 17 sets minimum periods based on service. An employer may also pay the remuneration for that period in advance, subject to the applicable rules.

Immediate termination for just cause requires a separate assessment under Article 24 for employees or Article 25 for employers. Health-related grounds, breaches of morality and good faith, and compelling circumstances have different conditions. An allegation of poor performance and an allegation of serious misconduct should not be treated as interchangeable.

Not every workplace concern justifies immediate dismissal. The seriousness of the event, its supporting evidence and the relevant statutory ground matter.

Minimum notice periods

The statutory minimum periods are:

• Two weeks for service of less than six months.
• Four weeks for service from six months to one and a half years.
• Six weeks for service from one and a half to three years.
• Eight weeks for service exceeding three years.

Contracts may increase these minimums. Failure to observe the notice requirement may result in compensation in lieu of notice. Paying notice remuneration does not remove the need for a valid reason where employment-security rules apply.

Notice compensation and severance are different claims. Entitlement to one does not automatically establish entitlement to the other, and the remuneration components included in the calculation must be considered separately.

When do employment-security protections apply?

The principal criteria under Articles 18–21 include an indefinite-term contract, generally at least six months’ service and employment at a workplace meeting the thirty-employee threshold. The employer’s workplaces in the same branch of activity may need to be considered together when counting employees. Certain employer representatives fall outside the protection; special rules also exist, including for underground workers.

Where the employee is covered, dismissal by the employer must be based on a valid reason relating to capability, conduct or the requirements of the undertaking, workplace or work. Dismissals involving discrimination, trade-union activity or the exercise of legal rights require further scrutiny.

Falling outside reinstatement protection does not mean that all employment rights disappear. Wages, accrued leave and possible notice, severance or discrimination claims have their own conditions.

Written reasons and the employee’s defence

For dismissals within the employment-security framework, the employer must give written notice and state the reason clearly and specifically. Where the reason concerns conduct or performance, the defence safeguard in Article 19 must be considered, together with the exception relating to Article 25/II.

A generic statement that performance was inadequate will not answer every question. Assessment criteria, the concerns communicated to the employee, relevant records and the defence process should be examined together. Evidence used to support a dismissal must also be obtained lawfully.

Time limits for immediate termination

Article 26 contains a six-working-day period from learning of the relevant conduct and, generally, a one-year limit from the event for grounds concerning morality and good faith. The one-year limit does not apply where the employee obtained a material benefit from the incident.

These periods should not be applied indiscriminately to every form of just-cause termination. The statutory ground, who had authority and knowledge, and whether the conduct continued can affect the assessment.

Reinstatement: one month and two weeks

An employee seeking reinstatement on the basis that dismissal was invalid must apply to a mediator within one month of notification of the dismissal. A calendar month should not simply be treated as thirty days.

If mediation ends without agreement, proceedings may be brought before the labour court within two weeks of the date of the final mediation record. These are special reinstatement deadlines, not universal deadlines for every employment claim.

Following a final reinstatement judgment, the employee must apply to the employer to return to work within ten working days of notification of the decision. The application and the employer’s response have further consequences and require separate attention.

Severance, accrued leave and release documents

Severance under the continuing Article 14 of Law No. 1475 generally requires at least one year of service and a qualifying reason for termination. Not every departure qualifies. Unpaid wages, overtime and unused annual leave must be assessed separately under their own rules.

A document stating that the employee has no further claims is not automatically conclusive. Article 420 of the Turkish Code of Obligations requires, among other conditions, a written release, at least one month between termination and the release, clear identification of the type and amount of the debt, and full payment through a bank. Documents of a different legal nature, such as mediation agreements, must be assessed under the rules applicable to them.

Documents useful for an initial assessment

• The contract, amendments and any applicable collective agreement.
• Employment commencement and departure records, dismissal or resignation notices.
• Payslips, bank payments and annual-leave records.
• Requests for a defence, incident reports and performance assessments.
• Relevant correspondence retained through lawful means.
• Mediation application documents and any final record.

Putting documents in chronological order helps clarify when notice was received, what was paid and which claims may need assessment. Missing a document does not prevent an initial review; other evidence may also be relevant.

Two common questions

Does payment in lieu of notice remove the right to seek reinstatement? No. Notice remuneration and the validity of the dismissal are separate issues. Coverage under employment-security rules and the reason for dismissal must still be assessed.

Does signing a resignation document end every entitlement? Its wording, whether it reflects the employee’s actual intention, the reason for departure, payment records and the type of claim all matter. The document’s heading alone should not determine the answer.

A sound assessment brings together the contract, chronology, evidence and applicable application periods rather than relying on one document or one payment.