Corporate Newsletter – February 2026

CORPORATE NEWSLETTER – FEBRUARY 2026

Legislative Changes

The Grace Period for Calculations of Capital Loss and Insolvency Has Been Extended!

The Ministry of Trade, via the Communication on Amendments to the Communication Regarding the Procedures and Principles for the Application of Article 376 of the Turkish Commercial Code No. 6102, published in the Official Gazette dated 10 December 2025, has extended the transitional application period for “technical insolvency” calculations under Article 376 of the Turkish Commercial Code The transitional application period for ‘technical insolvency’ calculations regulated under Article 376 of the Turkish Commercial Code has been extended until 1 January 2027.

Pursuant to this regulation, companies may choose not to include the following items in their equity calculations until 2027:

• The entire amount of exchange rate losses arising from foreign currency liabilities not yet settled,
• and half of the depreciation and staff costs accrued in 2020 and 2021.

Whilst this calculation method does not require a restatement of the financial statements, it will continue to be applied by disclosing the situation in the notes to the financial statements. Thus, companies are protected from being forced into legal processes such as capital increases or liquidation due to exchange rate fluctuations and costs from previous periods.

Inflation Accounting Implementation Postponed Until 2017!

Pursuant to Transitional Article 37, added to the Tax Procedure Code No. 213 (VUK) by Law No. 7571, published in the Official Gazette dated 25 December 2025 and numbered 33118, the obligation for companies to adjust their financial statements for the effects of inflation has been suspended for three years. The key details of the regulation are as follows:

For the financial years 2025, 2026 and 2027 (including interim tax periods), financial statements will not be subject to inflation adjustment even if inflation rates meet the adjustment criteria. The President has been authorised to extend this deferral period for up to three further financial years. Whilst this deferral decision applies to all taxpayers, the financial sector has been excluded from this exemption.

During these periods when no inflation adjustment is applied, companies may, if they wish, use the ‘Revaluation’ provision under tax laws to revalue their assets to their current values.

Minimum Amounts Banks Are Obliged to Pay in the Event of a Cheque Bouncing Have Been Increased!

The minimum amounts that the drawee bank is obliged to pay to the holder in the event of a cheque bouncing have been increased pursuant to Communication No. 2026/4 dated 29 January 2026 prepared by the Central Bank of the Republic of Turkey. 30 January 2026, the new amounts are as follows:

• The amount banks are obliged to pay for each cheque presented within the time limit has been raised to 16,350 Turkish Lira.
• For old-style cheque books printed prior to Circular No. 2010/2, this liability amount has been set at 14,200 Turkish Lira.

This change means that for companies collecting commercial receivables via cheques, the guaranteed amount they can claim from the bank in the event of a cheque being dishonoured (bounced) has increased. If the cheque amount is below these thresholds, the bank is obliged to pay the full amount of the cheque; if it is above these thresholds and there are no funds in the account, the bank is obliged to pay this minimum amount.

Administrative Fines to be Imposed Under the Labour Act No. 4857 (2026)

Changes to the Jurisdictional Areas of the Commercial Courts of First Instance in Istanbul

Pursuant to the decision of the General Assembly of the Council of Judges and Prosecutors dated 18 February 2026 and numbered 282; it has been decided that the Bakırköy, Istanbul Anatolia and Küçükçekmece Commercial Courts of First Instance shall be abolished and merged with the Istanbul Commercial Courts of First Instance, and that the jurisdiction of the Istanbul Commercial Courts of First Instance shall be redefined as ‘the administrative boundaries of the province of Istanbul’. In this context, the jurisdictions of the Bakırköy, Istanbul Anatolia and Küçükçekmece Commercial Courts of First Instance have been removed from the jurisdictions of their respective High Criminal Courts; it has been ordered that the cases pending before the said courts be transferred to the Istanbul Commercial Courts of First Instance. It has been decided that this decision shall apply as of the date on which the operations of the courts whose operations have been suspended were suspended.

JUDICIAL DECISIONS

Decision of the 9th Civil Chamber of the Court of Cassation Regarding Termination of Employment Based on Compelling Cause

In its decision dated 17 September 2025, numbered E.2025/5850, K.2025/6491, the 9th Civil Chamber of the Court of Cassation drew attention to the incorrect application of Article 25(III) of the Labour Code No. 4857 in cases of termination based on compelling reasons arising at the workplace.

The decision stated that it was incorrect to conclude that the employer had valid grounds for termination by classifying the suspension of workplace activities due to administrative decisions as a compelling reason, and consequently to reject the claim for notice pay. In its review following an appeal in the public interest by the Ministry of Justice, the Court of Cassation interpreted the scope of Article 25/III narrowly.

The Court emphasised that, for a just cause for termination to arise, the compelling reason must occur not at the workplace but in the employee’s immediate environment, and the employee must be temporarily unable to perform their duties through no fault of their own. In this context, it was stated that the employer cannot terminate the contract justifiably under this provision on the basis of compelling reasons arising at the workplace, and consequently, the notice pay does not cease to apply.

On these grounds, it was ruled that the decision should be quashed in the interest of the law, and it was established that employers must exercise caution when relying on Article 25/III in terminations based on compelling reasons.

Decision of the 9th Civil Chamber of the Court of Cassation Regarding How Days for Which Reports Are Taken Are Reflected in the Employee’s Wages

In its decision dated 20 October 2025, Case No. 2025/6599, Judgment No. 2025/8115, the 9th Civil Chamber of the Court of Cassation assessed whether deductions may be made from the wages of employees paid a fixed monthly wage during periods when they are on sick leave.

In the decision, it was stated that, pursuant to Article 48/2 of the Labour Code No. 4857, the temporary incapacity allowance paid by the Social Security Institution for the days on which the employee is on sick leave may be offset by the employer against the wage calculation. However, the Court of Cassation explicitly emphasised that this deduction is limited solely to the amount covered by the Social Security Institution, and that the remaining portion of the fixed-salary worker’s monthly wage must continue to be paid by the employer.

Consequently, the ruling establishes that the wages of employees on a fixed-salary basis cannot be entirely withheld during sick leave; only an amount equivalent to the temporary incapacity allowance paid by the Social Security Institution may be deducted, and the remaining portion of the wage must be paid in full by the employer.

In this respect, the decision highlights the importance, from the employers’ perspective, of correctly structuring wage practices during sick leave periods to prevent labour claims arising from underpayment and disputes over termination.

Constitutional Court Decision on the Assessment of the Statute of Limitations and the Right to a Fair Trial in the Application of Foreign Law

The Constitutional Court, in its decision dated 29 July 2025 and bearing application number 2024/48855, ruled that the right of access to the courts had been violated due to the dismissal of a claim for wages on the grounds of the limitation period prescribed under foreign law. In the application at issue, the lower courts and the Court of Cassation had accepted that the customary labour law of the workplace should apply to the dispute; within this framework, the worker’s claim was dismissed without consideration of its merits on the grounds that the limitation period for bringing an action under foreign law had expired. This approach accepted that the law applicable alongside the employment contract had also been determined.

Whilst acknowledging that limitation periods may be established for the purposes of legal certainty and stability, the Constitutional Court emphasised that any restrictions on the right of access to the courts must be proportionate. The judgment stated that the interpretation regarding the determination of the applicable law must not result in the effective elimination of the right to bring a claim. The Court found that, in the specific case, the judicial authorities had reached their conclusion solely on the basis of the habitual place of work criterion, without carrying out the ‘closely connected law’ assessment set out in Article 27 of Law No. 5718. It was noted, however, that the application of short time limits under foreign law without such an assessment imposes an unbearable burden on the worker and disproportionately restricts the freedom to seek redress.

On these grounds, the Constitutional Court ruled that the right of access to the courts, guaranteed under Article 36 of the Constitution as part of the right to a fair trial, had been violated; it ordered a retrial to remedy the violation.

The Council of State Annulled the ‘Violation of Rules of Morality and Good Faith’ Code in SGK Termination Records

By its Decision No. 2020/2598 E., 2024/3991 K., the 10th Chamber of the Council of State; annulled the ‘breach of rules of morality and good faith’ code appearing in SGK employment termination records, finding it contrary to the law in terms of the protection of personal data and the right to work.

The decision assessed the effects of the code in question on the worker’s working life and the protection of personal data. The claimant argued that recording the reason for termination of the employment contract in the SGK system using this code resulted in an unresolved dispute being officially recorded, that this situation made it difficult to find new employment, and that it infringed upon the right to respect for private life and the freedom to work. The defendant authority, however, argued that termination codes are mandatory for determining social security entitlements.

The Council of State emphasised that information regarding the reason for termination constitutes personal data; it noted that legislation lacks sufficient safeguards regarding the processing of this data and the consequences it may entail for third parties. Furthermore, it was stated that due to the broad and general nature of ‘code 29’, the employee could face the risk of being stigmatised.

On these grounds, it was decided to annul the relevant provision in Annex 5 of the Regulation with regard to code 29 and the associated wording. The decision highlights the need for generalised codes, which could have serious consequences for employees, to be revised in line with data protection principles. In this respect, the decision reinforces the need for more measured and transparent coding in practice.

NEWS FROM AROUND THE WORLD

New Obligations for Member States Under the Pay Transparency Directive

The European Union has introduced new and binding rules on pay transparency to strengthen the principle of equal pay for equal work between women and men. As outlined by the Council of the EU, these regulations aim to combat pay discrimination, reduce the gender pay gap and strengthen employees’ ability to seek redress.

According to the European Council’s statement, the lack of pay transparency is seen as one of the main obstacles to closing the gender pay gap. In this context, it is reported that the gender pay gap averages around 12–12.7 per cent across the EU, whilst the gap in retirement income stands at approximately 26.1 per cent.

• Access to information during the recruitment phase

• Employers will be required to inform job seekers of the starting salary or salary range (in the job advertisement or prior to the interview).
• Employers will be prohibited from asking candidates about their salary history.

• Access to information during the employment relationship

• Employees will be able to request information on average pay levels, broken down by gender, for groups of employees performing the same or equivalent work.
• Criteria determining pay and career progression are expected to be objective and gender-neutral.

• Reporting obligation and the 5% threshold

• Companies with 250 or more employees are expected to produce annual reports on gender-based pay gaps; reporting periods vary for smaller businesses.
• Where the pay gap exceeds 5% and cannot be justified by objective or gender-neutral criteria, measures such as a ‘joint pay assessment’ involving employee representatives may be considered.

• Remedies, compensation and sanctions

• Compensation options for employees subjected to pay discrimination are being strengthened; deterrent sanctions and fines are envisaged for breaches.
• In claims of pay discrimination, the burden of proof does not automatically remain with the employer; an approach is adopted whereby, in certain circumstances, the employer is expected to demonstrate that “no breach has occurred”.

Implementation of the Pay Transparency Directive in Member States: The Examples of Sweden and Cyprus

In Sweden, the first comprehensive proposal regarding the transposition of the Pay Transparency Directive into national law was published on 29 May 2024. The most recent development in this process was on 15 January 2026, when the Swedish Government referred the proposed amendments to the Discrimination Act—intended to enable the implementation of the Directive—to the Legislative Council. According to the proposed timetable, these amendments are expected to come into force on 1 July 2026; the final bill is expected to be submitted to parliament in mid-March 2026.

Key provisions of the proposal include a requirement for employers to inform candidates of the starting salary or salary range during the recruitment process, and a ban on asking questions regarding salary history. Furthermore, it appears that certain obligations under the Directive, which currently apply only to employers of a specific size, are planned to be extended to cover all employers in Sweden. In this respect, the Swedish approach reflects a stance that goes beyond the minimum EU standards.

In Cyprus, a comprehensive draft law on the implementation of the Pay Transparency Directive was published in November 2025; following a brief consultation period on the draft, it was announced that full compliance is targeted by 7 June 2026. The draft text sets out a comprehensive framework covering both public and private sector employers.

In the draft regulation, the concept of ‘pay’ is broadly defined; the explicit prioritisation of objective and gender-neutral criteria in the assessment of work of equal value is made mandatory. Whilst the sharing of pay information during the recruitment stage and the prohibition of questions regarding pay history are envisaged, employees are granted the right to request information on the average pay, broken down by gender, of groups performing the same work or work of equal value. Furthermore, in cases of pay gaps exceeding 5% that cannot be objectively justified, employers are required to implement short-term corrective measures, followed by a joint pay review.

A Bill on the Prevention of Sexual and Gender-Based Violence in the Workplace Has Been Submitted to the French Parliament!

On 2 December 2025, a new bill on the prevention of sexual and gender-based violence in the workplace was submitted to the French Parliament. The key provisions for employers under the proposal are as follows:

• A mandatory training obligation for all employees, and the inclusion of this topic in career reviews conducted every four years,
• Making it mandatory for companies with 50 or more employees to appoint a contact person for sexual harassment and sexist behaviour (the current threshold is 250 employees),
• Granting victims the right to paid leave for legal, medical, psychological or administrative proceedings,
• Inclusion of the matter within the scope of mandatory collective bargaining at sectoral level.

Failure to Sign the Pre-Termination Meeting Invitation Does Not Invalidate the Termination!

Under French employment law, employers are obliged to invite the employee to a meeting prior to termination. The invitation may be sent by registered post or delivered in person against signature.

In the specific case, the employee refused to sign the pre-termination meeting invitation delivered in person; however, they attended the meeting and their employment contract was subsequently terminated. The employee claimed compensation, arguing that the procedure had not been followed because the invitation had not been confirmed by signature.

In its ruling of 21 January 2026, the French Supreme Court stated that the purpose of the signature was merely to prevent disputes regarding the date of the invitation; it ruled that the absence of a signed delivery confirmation would not affect the validity of the termination, given that the employee had attended the meeting and had not denied the invitation.

COMPLIANCE CORNER

Corporate Email Accounts of Departing Employees: The GDPR Approach and Its Implications for Turkey

As outlined in our January 2026 Data Protection and Compliance Bulletin, the Belgian Data Protection Authority ruled in its decision dated 06.01.2026 that keeping corporate email accounts belonging to a former employee active for approximately two years was in breach of the General Data Protection Regulation (“GDPR”).

The decision acknowledged that keeping email accounts open for one month following resignation—as a “reasonable period”—could be considered within the legitimate interest of the employer, as the data controller, for the purpose of business continuity. However, it was emphasised that exceeding this period would cause the data processing to lose its characteristics of being relevant, limited and proportionate to the purpose; and that even the technical maintenance of an email account constitutes a personal data processing activity in itself.

The Authority has assessed that keeping corporate email accounts belonging to former employees active for an extended period cannot be justified under legitimate interest; this practice leads to the data processing activity exceeding the principles of purpose limitation and proportionality. Furthermore, it has deemed the failure to comply with the former employee’s requests regarding access to the accounts and the deletion of their data to be unlawful.

Assessment from a Turkish Perspective

Although the Law on the Protection of Personal Data No. 6698 (“KVKK”) does not explicitly stipulate a retention period, it is considered that the European approach serves as a guiding principle for Turkey when the principles of purpose limitation and proportionality, along with the obligations regarding retention and destruction, are taken into account.

In this context, as best practice:

• The corporate email account of an employee who has left the company should, as a rule, be immediately deactivated,
• the activation of an automatic reply mechanism on an exceptional basis to ensure business continuity,
• limiting this period to 1 month as a general rule, and allowing it to be extended to a maximum of 3 months for senior or critical positions, provided this is justified,
• and ensuring that the account is completely closed and destruction processes are carried out at the end of the period.

HUMAN RESOURCES CORNER

Current Status of Overtime Approvals

The overtime working arrangement is regulated under Article 41 of the Labour Code, which stipulates that overtime is subject to the employee’s consent. The principles of implementation are determined by the Regulation on Overtime and Extended Working Hours under the Labour Code.

With the amendment made to the aforementioned Regulation in 2017, the requirement to renew the written consent for overtime at the start of each year has been abolished. Nevertheless, in practice, there may occasionally be uncertainty as to whether the old regulation remains in force. Under current legislation, it is not necessary to obtain consent for overtime at the start of each calendar year.

However, the requirement to obtain written consent from the employee for overtime work remains in force. Consent may be obtained either at the time the employment contract is concluded or during the course of the employment relationship. Furthermore, the employee has the right to withdraw their consent in writing. For this reason, it is important that consent procedures are conducted in writing and recorded.