Understanding Turkish Labor Law: A Guide for Employers

For businesses operating in Turkey, understanding the country's labor laws is essential for maintaining compliance and fostering positive workplace relations. Whether you're a foreign company establishing operations in Turkey or a local business seeking clarity on employment regulations, this comprehensive guide will help you navigate Turkish labor law with confidence.

Turkey's labor legislation strikes a balance between protecting employee rights and providing employers with the flexibility needed to operate effectively. With recent amendments and ongoing changes to keep pace with economic conditions, staying informed about Turkish labor laws is more important than ever for employers.

Legal Framework of Turkish Labor Law

Turkish labor law is founded on constitutional principles that establish fundamental workers' rights. The Turkish Constitution explicitly guarantees workers the right to form unions without prior permission, freely join or leave unions (Article 51), engage in collective bargaining (Article 53), and strike (Article 54). These constitutional protections are further detailed in the Labor Act of 2003, which serves as the primary legislation governing employer-employee relations in Turkey.

Employment Contracts in Turkey: Types and Requirements

The cornerstone of any employment relationship in Turkey is the employment contract. Turkish law recognizes two main types of employment contracts:

Indefinite-Term (Open-Ended) Contracts

While indefinite-term contracts don't require written documentation under Turkish law, having a written agreement is still advisable to clearly define the employment relationship and prevent potential disputes. These contracts continue until terminated by either party according to legal provisions.

Fixed-Term (Definite) Contracts

Fixed-term contracts must be in writing if they extend for one year or longer. These contracts are subject to important limitations:

• Maximum duration of two years
• Cannot be extended or renewed more than once
• If employment continues beyond these limits, the contract automatically converts to an indefinite-term contract

To protect your business interests, ensure all employment contracts clearly outline:

• Detailed job descriptions and responsibilities
• Working hours and overtime policies
• Compensation structure and benefits
• Leave entitlements
• Termination clauses
• Trial periods (if applicable)

Working Hours and Overtime

Standard working hours in Turkey are regulated as follows:

• The standard workweek is 45 hours, typically distributed as 9 hours per day across 5 days
• Some industries may extend to 50 hours per week
• Any work beyond 45 hours in a week qualifies as overtime
• Overtime must be compensated at a rate 50% higher than the employee's regular hourly wage
• Annual overtime is capped at 270 hours per employee

Proper documentation of overtime hours and accurate compensation are essential for compliance. Failure to adhere to these regulations can result in financial penalties and legal disputes.

Rest Periods and Breaks

Turkish labor law mandates specific break periods during the working day:

• 15-minute breaks for work days up to 4 hours
• 30-minute breaks for work days between 4 and 7.5 hours
• 1-hour breaks for work days exceeding 7.5 hours

These breaks are not counted as working hours and should be properly scheduled and documented.

Leave Entitlements

Annual Paid Leave

Full-time employees who have completed at least one year of service are entitled to annual paid leave based on their length of service:

• 14 working days for employees with service of 1-5 years
• 20 working days for employees with service of 5-15 years
• 26 working days for employees with service of 15+ years

Important considerations for employers:

• Annual leave periods cannot be converted to monetary compensation while employment continues
• The timing of leave can be determined by the employer, with consideration for employee preferences when possible
• Unused leave must be compensated upon termination of employment

Other Types of Leave

Turkish labor law also provides for various other types of leave, including:

• Sick leave
• Maternity leave
• Paternity leave
• Marriage leave
• Bereavement leave
• Compassionate leave

Each type has specific eligibility requirements and durations that employers must observe.

Termination of Employment

Terminating employment in Turkey requires careful adherence to legal requirements to avoid costly disputes.

Valid Grounds for Termination

Employers may terminate employment contracts for valid reasons, including:

• Misconduct (providing false qualifications, disparaging the employer, sexual harassment, theft)
• Poor performance despite warnings
• Unauthorized absence (two consecutive days or three days in a month)

Notice Periods

Statutory notice periods vary based on the employee's length of service:

• 2 weeks for less than 6 months of service
• 4 weeks for 6 months to 1.5 years of service
• 6 weeks for 1.5 to 3 years of service
• 8 weeks for more than 3 years of service

Employers who fail to provide adequate notice must pay "notice pay" equivalent to the wages the employee would have earned during the notice period.

Severance Pay

Employees who have completed at least two years of service are entitled to severance pay upon termination, calculated at 30 days' pay for each year of service. The severance pay ceiling was recently amended to 46,655.43 TL, effective from January 1, 2025, to June 30, 2025.

Non-Compete Agreements

Employers can use non-compete agreements to protect their business interests and prevent former employees from engaging in competing activities. For these agreements to be enforceable, they must be:

• Reasonable in scope
• Limited in duration
• Geographically appropriate
• Necessary to protect legitimate business interests

Overly restrictive non-compete clauses may be deemed unenforceable by Turkish courts.

Anti-Discrimination Provisions

The Turkish Labor Act explicitly prohibits discrimination based on sex, religion, or political affiliation. Employers must ensure equal treatment of all employees in:

• Hiring processes
• Promotion decisions
• Compensation structures
• Termination procedures

Implementing clear anti-discrimination policies and regular training can help prevent discrimination claims.

Workplace Harassment (Mobbing)

Turkish labor law prohibits workplace mobbing, which includes any form of harassment or bullying. Employers have a responsibility to:

• Create and maintain a safe and respectful work environment
• Establish clear policies against harassment
• Implement effective reporting mechanisms
• Take prompt and appropriate action when harassment occurs
• Protect whistleblowers who report wrongdoing

Special Considerations for Young Workers

Turkish law provides special protections for young workers:

• "Young worker" refers to individuals aged 15-18
• "Child worker" refers to individuals aged 14-15 who have completed primary education
• Employment of children under 14 is prohibited
• Young workers cannot work more than 8 hours daily or 40 hours weekly
• Child workers attending school are limited to 7 hours daily and 35 hours weekly during school holidays

Employing Foreign Nationals

Employers hiring foreign nationals in Turkey must navigate additional requirements:

• Work permits are mandatory for all foreign employees
• Certain professions (dentistry, pharmacy, legal services) are restricted for foreign employees
• Employers must ensure compliance with all work permit regulations
• Applications for work permits should be initiated well in advance of the intended employment start date

Collective Bargaining and Labor Unions

The Turkish Constitution guarantees workers' rights to engage in collective bargaining. However, employers should note that:

• There are restrictions on strikes in certain essential industries (education, national defense, sanitation, utilities)
• Collective bargaining agreements may modify certain statutory provisions
• Union membership and activities are protected under law

Employer-Friendly Provisions in Turkish Labor Law

Despite its strong employee protections, Turkish labor law includes several provisions that benefit employers:

Flexible Working Arrangements

Employers and employees can agree on flexible working arrangements, provided the total weekly working hours don't exceed legal limits. This flexibility can help accommodate diverse workforce needs while maintaining productivity.

Trial Periods

Employment contracts can include trial periods to assess employee suitability:

• Up to two months for individual employment agreements
• Up to four months with collective labor agreements
• During this period, either party can terminate the contract without notice or compensation

Fixed-Term Contracts for Specific Projects

The ability to use fixed-term contracts for specific projects or temporary needs provides businesses with the flexibility to adjust their workforce based on operational requirements.

Recent Developments and Future Trends

Turkey has made significant progress in improving the quality of life of its citizens over the past two decades, but challenges remain in the labor market. The employment rate in Turkey is relatively low compared to other OECD countries, and a significant portion of the workforce is employed in the informal sector.

Turkish labor law continues to evolve in response to economic conditions and global trends:

Minimum Wage Adjustments

The minimum wage for 2025 was set at 22,104 TL, representing a 30% increase from 2024, primarily due to high inflation. Employers should anticipate potential multiple wage increases throughout the year to keep pace with inflation and retain valuable employees.

Early Retirement Law

The recently enacted Early Retirement Law (EYT Law) presents both challenges and opportunities for employers. While many experienced employees may become eligible for retirement, creating operational and financial challenges, this also opens opportunities for workforce renewal and restructuring.

Remote Work Regulations

In response to changing work patterns, legislation is anticipated to implement flexible and/or partial working arrangements, including remote work. Employers should prepare for these developments by establishing clear remote work policies and ensuring appropriate technological infrastructure.

Resolving Labor Disputes

When disputes arise, understanding the resolution process is crucial

Labor Courts

Specialized labor courts have jurisdiction over employment-related disputes in Turkey. These courts handle matters such as:

• Wrongful termination claims
• Unpaid wages
• Discrimination allegations
• Workplace harassment complaints

Mediation Requirement

Before filing a lawsuit, parties must attempt mediation for certain employment disputes. This mandatory mediation process aims to resolve conflicts efficiently and reduce court backlogs.

Key Takeaways for Employers

Turkish labor law provides a comprehensive framework for regulating employment relationships. Employers must stay informed about the latest regulations and ensure they comply with all legal requirements. By understanding the key provisions and employer-friendly aspects of Turkish labor law, businesses can create a productive and legally sound work environment while protecting their interests.

Here are some key takeaways for employers:

• Prioritize clear and comprehensive employment contracts: This is crucial to avoid misunderstandings and potential disputes.
• Stay informed about changes in labor law: Turkish labor law is subject to regular amendments, so it is essential to keep up-to-date with the latest regulations.
• Seek expert legal advice when needed: Consulting with a labor law specialist can help employers navigate complex issues and ensure compliance.
• Foster a positive and respectful work environment: This can help prevent workplace disputes and improve employee morale and productivity.
• Understand the rights and obligations of both employers and employees: This is essential for creating a fair and balanced work environment.
• Be aware of the challenges and opportunities in the Turkish labor market: Factors such as high inflation, low female labor force participation, and rigid labor market rules can impact employers' decisions.

By proactively addressing these key aspects of Turkish labor law, employers can create a thriving and compliant workplace that benefits both the company and its employees.

Understanding and complying with Turkish labor law is essential for businesses operating in Turkey. By maintaining clear employment contracts, fair workplace policies, and staying informed about legal developments, employers can create productive work environments while minimizing legal risks.

For complex employment matters or specific legal challenges, consulting with a specialized labor law attorney in Turkey is advisable. At Lawzana, we connect employers with qualified legal professionals who can provide expert guidance on Turkish labor law compliance and help resolve employment-related issues effectively.

Disclaimer: This guide provides general information about Turkish labor law and should not be construed as legal advice. For specific guidance regarding your business's employment practices, please consult with a qualified attorney specializing in Turkish labor law.