MANDATORY ELEMENTS THAT MUST BE INCLUDED IN THE LABOUR CONTRACT
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ToggleAlthough the Labour Law No. 4857 s. 4857 (“Labour Law” or “Law”) mentions three main elements in order to be able to talk about the existence of an employment contract, there are other elements that are not included in the Law, but which are sought in employment contracts, both in the decisions of the Court of Cassation and in practice. In this article, as GRC Legal, we will evaluate all the mandatory elements that must be included in the employment contract within the framework of the Labour Law, Supreme Court of Cassation Decisions and Doctrine.
1. Performance of Labour, Dependency and Wage
Pursuant to Article 8 of the HR, “An employment contract is a contract consisting of one party (employee) undertaking to perform work dependently and the other party (employer) undertaking to pay wages. The employment contract is not subject to a special form, unless otherwise stipulated in the Law.” In this context, the Law does not require a mandatory form requirement for the existence of an employment contract, but mentions three main elements that must be present in the employment contract. These elements are the performance of labour, remuneration and dependency. For the existence of an employment contract, first of all, an act of performance of work must be undertaken. The work in question is any kind of work of a natural person that can be considered as work in economic terms. In employment contracts, the employee is more or less dependent on the employer. In other words, he/she performs his/her work under the supervision and control of the employer. However, the relationship of dependency in an employment contract should not be understood as an economic or technical dependency, but rather as a personal/legal dependency.
Like the element of performance of work and dependency, remuneration constitutes one of the essential elements of the employment contract. The wage agreed between the employee and the employer during the establishment of the employment contract or the wage declared by the employer when hiring the employee without any condition is defined as “basic wage” or “naked wage”; the sum of the benefits that can be measured in money and money that are added to the basic wage and provided to the employee in the form of side payments is called “dressed wage” or “wage in the broad sense” in the doctrine. Examples of the rights included in the wage in the broad sense are bonuses, premiums, social benefits (food allowance, fuel allowance, clothing allowance, transport allowance), private health insurance.
Unless there is no wage, the existence of an employment contract cannot be mentioned. However, the fact that the wage is a mandatory element of the employment contract does not necessarily mean that it must be clearly stated. In cases where it is deemed necessary and usual to pay a wage for the work performed, as a rule, it will be accepted that a wage has been agreed between the parties. As a matter of fact, pursuant to Article 401 of the Turkish Code of Obligations (“TCO”), the employer is obliged to pay the employee the prevailing wage determined in the contract or collective labour agreement, and in cases where there is no provision in the contract, not less than the minimum wage.
In its decision dated 18.11.1964, 2/4, RG, 27.11.1964, the Supreme Administrative Court of Appeal stated that “It is necessary to distinguish, without any doubt, between unpaid work and paid work for which the wage is not determined. In the second case, if the other elements are present, it cannot be said that the employment contract does not exist solely because the wage is not determined. In such a case, the wage shall be determined on the current basis, not less than the minimum wage.”
Y9HD, 14699/1530, 28.01.2010 dated decision “In cases where the wage is not agreed in the employment contract, the amount of the wage is determined by taking into consideration the personal characteristics of the employee, his/her seniority in the workplace or profession, professional title, the nature of the work performed, the type of employment contract, the characteristics of the workplace, the characteristics of the workplace, peer employees, the wages paid in that workplace or in other workplaces, customs and traditions.” and clearly stated that the amount of the wage is not a mandatory element that must be written in the employment contracts. Although the above-mentioned elements are clearly regulated in the Law, there are other elements that are required in the employment contracts, which are encountered in the decisions of the Court of Cassation. When we consider these elements, some questions arise. Namely
2. Should each page of the employment contracts be signed by the employees?
It is very important that the employment contracts are written clearly, clearly and in accordance with the law and mutual signatures are signed in order to prevent grievances. In addition, each page must be signed by the employee in order for all provisions in the contract to be binding. The provisions on the unsigned pages are not binding for the parties before the Court of Cassation. In its decision dated 20.10.2015, 22nd HD of the Court of Cassation, E. 2015/27842 K. 2015/29273 T. “Although the employment contract signed between the parties stipulates that overtime work up to two hundred and seventy hours per year is included in the wage, there is no signature of the plaintiff on the page where this provision is included in the employment contract. Therefore, this provision of the labour contract does not bind the employee. “, the court ruled as follows.
3.Should the date be written on the employment contracts?
Since the date of commencement of employment is taken as a basis in terms of labour receivables such as severance pay and annual leave wages arising from employment contracts, it is necessary to write the date in the employment contracts. In the decision of the 9th HD of the Court of Cassation, E. 2021/1390 K. 2021/5207 T. 1.3.2021, “In the concrete dispute; Article 8 of the employment contract signed between the parties states that 270 hours of overtime work is included in the wage. In the expert report based on the decision of the Court of First Instance, this provision was not taken into consideration since the employment contract was undated and the plaintiff did not receive overtime approval every year.
The Regional Court of Appeal, on the other hand, deducted 270 hours of overtime work per year from the calculated overtime work. However; there is no date in the labour contract in the file. For this reason, the problem arises from which date the labour contract will be effective. Since the provision of the labour contract, which does not contain a date, stating that the 270 hours of annual overtime wage is included in the wage cannot be accepted as valid, the deduction of 270 hours of annual overtime from the overtime period is erroneous and the decision had to be reversed in this respect.” For this reason, although the date does not appear as a mandatory element in the law in employment contracts, it will be important from which date the contract will be valid in case of a possible lawsuit.
4.Should the working hours be explicitly agreed in employment contracts?
Determination of working hours is not among the essential elements of employment contracts. As a matter of fact, pursuant to Article 67 of the HR, “The starting and ending times of the daily work and rest hours are announced to the employees in the workplaces.” no obligation is foreseen. Article 8 of the Regulation on Working Hours Regarding the Labour Law states that “The starting and ending times of daily work and rest hours shall be announced to the employees in the workplaces by appropriate means. Depending on the nature of the work performed, the starting and ending times of work may be arranged differently for employees.” According to the current provision, the employer is obliged to announce to the employees at the workplace at what time their daily work will start and end and at what time they will be given the opportunity to take a break and rest, but how this announcement should be made is not included. Although it is not an obligation to include the working hours in the employment contracts, it will be important to determine the working hours in the employment contract in terms of the quality of proof, especially in the calculation of overtime wages.
Namely; in a recent decision of the Court of Cassation, based on the workplace procedure that determines the weekly working hours as 48 hours through the information form, which is an annex of the workplace, the Court of Cassation decided to evaluate the overtime wage based on 48 hours of work per week. In the decision of the Court of Cassation 9HD, 2022/4469 E., 2022/6420 K. dated 24.05.2022, “According to the statements of the plaintiff witnesses, the overtime work period determined is appropriate. However, considering that the weekly work was agreed as 48 hours (6×8=48) in the information form, which is an annex to the employment contract signed between the plaintiff and the defendant employer, and the wage was determined accordingly, it is necessary to calculate overtime wages for work over 48 hours per week. As such, the work to be done by the Court of First Instance is to calculate the overtime wage for the period exceeding 48 hours per week and to determine the overtime wage receivable to be determined accordingly. Making a decision without considering the principles and principles explained has required a reversal.” With these statements, it has been decided that if the working hours are determined over 45 hours in the contract between the parties and the wage is determined within this scope, the work done over the hours agreed in the contract should be accepted as overtime work.
5.Should the trial period be clearly stated in the employment contract?
Pursuant to Article 15 of the HR, “When a trial period is included in the employment contract by the parties, its duration may be maximum two months. However, the trial period may be extended up to four months by collective labour agreements. During the trial period, the parties may terminate the employment contract without notice and without compensation. The wages and other rights of the employee for the days worked are reserved”. Article 17 of the same Law titled “Termination for a Period of Time” states that “For the employee whose employment has lasted less than six months, the employment contract shall be terminated two weeks after the notification is made to the other party”.
When the provisions of the article are examined, it is seen that the employee or the employer who is in the trial period has the right to terminate the employment contract without being bound by the notice period (without prior notice to the other party). The purpose of the probationary period is to allow the employee or the employer to terminate the employment contract without having to notify the other party in advance or pay any compensation. Therefore, the employee or the employer who dismisses the employee during the probationary period is not obliged to pay notice compensation to the other party. A written trial period is not a condition of validity. However, the probationary period is subject to the written proof requirement. For this reason, in cases where written proof is not possible, the notice periods must be complied with.
In the decision of the 9th Court of Cassation, 2019/15921 E. 2009/13019 K. regarding the trial period, “… The most important element that distinguishes the employment contract containing a trial period from other employment contracts is that it stipulates a trial period. The main thing is that the employment contract is concluded without a trial period. The fact that the employment contract is concluded with a trial period is an exceptional situation. The fact that the employee has just entered the workplace, by itself, is not considered as evidence that the trial period has been stipulated by the parties. The termination of the employment contract by the employee or the employer without giving a notice period before the expiry of two months from the date of the employee’s employment does not indicate a probationary period. For this reason, unless it is proved by other evidence and indications, the party claiming the existence of a probationary period must be held liable to prove this claim, since he has asserted an exceptional situation. This is because the party claiming a situation contrary to the rule is obliged to prove his/her claim. There is no clear provision in the law regarding the form of the probationary employment contract. However, it must be in writing, especially in terms of the burden of proof. It is not a condition of validity, but a condition of proof…” and it is stated that the party claiming that there is a trial period must prove this claim. For this reason, although the trial period, which should be included in the employment contracts, does not appear as a condition of validity, it should be accepted among the mandatory elements that must be present as a condition of proof.
6.Should the Wage Deduction Penalty Implemented at the Workplace be Clearly Stated in the Employment Contract?
Pursuant to Article 38 of the HR, “The employer cannot impose a wage deduction penalty on the employee except for the reasons specified in collective agreements or labour contracts.” In its decision dated 29.02.2012, the Court of Cassation, 9th HD., E. 2009/45074 E. 2012/6465 K., ruled as follows: “The work to be done by the court is to decide according to the result by taking into account Article 38 of the Law No. 4857, by obtaining all documents such as regulations, penalty tables, other documents annexed to the labour contract, etc. applied in the workplace and determining whether these documents stipulate a wage deduction penalty for the alleged action of the plaintiff.” Both the HR and the Supreme Court have clearly stated that if the penalty of wage deduction is not regulated in detail in the employment contract or its annexed documents, the employee cannot be penalised with a wage deduction. The aim here is to ensure that the employee knows which behaviour will result in a penalty and refrains from doing that behaviour. For this reason, the employer should immediately notify the employee of the reason for the wage deduction, the amount of the wage deduction and the reasons for the wage deduction, and the employee should clearly know which action he/she is penalised for.
The deductions to be made from the wages of the employee within this scope should not be more than two days’ wages in a month or more than two days’ earnings of the employee in the wages paid per piece or according to the amount of work performed. The legislator has set a limitation for the deductions to be made with the provision “The deductions to be made from the workers’ wages in this way cannot be more than two days’ wages in a month or more than two days’ earnings of the employee in the wages given per piece or according to the amount of work performed.” Wage deductions in collective labour and labour agreements that exceed the wage deduction limit specified in the law will be deemed invalid and the employee will be able to demand the reimbursement of the excessive deduction. The employee has the right to object to the wage deduction penalty, and if the employer does not accept this objection, the dispute may be brought to the judiciary. Therefore, in order for the employer to avoid any problems in the possible judgement, it is necessary to make deductions from the employee’s wages within the conditions stated above. However, although the legislator has limited the wage deduction penalty to two days in a month, it should be accepted that it is possible to impose more wage deduction penalties than the specified amount, provided that they are not applied within a month. Accordingly, it should be possible to impose 3 or more days of wage deduction penalty for various behaviours of the employees, and several penalties should be imposed for several behaviours requiring wage deduction within a month. However, it is important that these penalties should not be collected within the same month. 1 Finally, although it is not an obligation under the Labour Law to obtain a defence from the employee in the application of the wage deduction penalty, it is important for the employer not to face other problems in a possible trial.
7. Should the prohibition of moonlighting be explicitly included in the employment contract?
There is no explicit and general provision in the law regarding the prohibition of working in another job. However, if the employee works in a side job that will harm the employer’s legitimate interests or poses a danger, it will be included in the behaviours that do not comply with the integrity and loyalty within the scope of the loyalty obligation specified in Article 25 of the HR, and for this reason, the employer’s right to justified termination or termination for valid reason may be raised. Therefore, which side job is prohibited or not for the employee should be evaluated within the scope of the duty of loyalty. Article 396 of the TCO defines the employee’s duty of loyalty by stipulating that “The employee is obliged to perform the work undertaken diligently and to act loyally in protecting the employer’s legitimate interest.”
The Court of Cassation has defined the duty of loyalty as follows: “In the performance of the obligations arising from the contractual relationship, the parties to the contract are obliged not to harm the person, property and other legally protected assets of the other party, and to avoid any behaviour that may jeopardise the purpose pursued by the contract, especially to undermine the mutual trust outside the scope of the contractual relationship.” Although it is not possible to determine in advance and enumerate one by one the numerous employee behaviours that may constitute a breach of the duty of loyalty, the TCO stipulates in paragraph 3 of the relevant article that “As long as the service relationship continues, the employee may not provide services to a third party for a fee in violation of the duty of loyalty, and in particular may not engage in competition with his own employer.” 2 Within the scope of the prohibition of moonlighting, it is more important whether the moonlighting constitutes a breach of the duty of loyalty or not, rather than the employee’s moonlighting. Therefore, in cases where the employer does not have a legitimate interest in the employee not working in a side job, the employee may have the freedom to do a side job. If the side job of the employee adversely affects his/her productivity in his/her main job, then the employer may have a justified interest. 3 As a matter of fact, the Supreme Court states that if the performance in the main job is affected or the employer is harmed due to the side job, the employee’s working in another job will constitute a just cause for the termination of the employment contract within the scope of Article 25(2)(e) of the HR by considering the “behaviour of the employee that does not comply with integrity and loyalty”.
The Court of Cassation 7th HD., 2015/4567 E., 2015/12025 K. dated 15.6.2015 states that “There is no provision in the employment contract or in our legal system that prohibits the defendant from working in another workplace after working hours. The employer has not claimed and proved that the employee has suffered damages due to his after-hours work or that the order in the workplace has deteriorated or that the employee’s performance has decreased.” It is stated that in order to terminate the employment contract on the grounds that the employee works at another workplace, it is necessary to check whether there is a provision regarding this in the employment contract. The Court of Cassation considers such contractual records as valid in its recent decisions and accepts the employee’s working in another job despite the prohibition of side work in the contract as a valid reason for the termination of the contract on the grounds that it constitutes a breach of the employment contract between the parties.
Finally, as a rule, although the legislator does not prohibit working in another job, this work of the employee must comply with the limits set by the law. In this context, the employee should not work in another job during the time he/she takes paid annual leave from his/her main job. Because the purpose of the annual paid leave is to ensure that the employee who works for a year rests, and the employee’s work during this period will be contrary to the purpose of the annual paid leave. Article 58 of the HR stipulates that if it is understood that the employee who is using his/her annual paid leave is working in a paid job during the leave period, the wage paid to him/her during this leave period may be recovered by the employer.6 In addition to the annual leave, the employee should not work in another job during the period when he/she is on sick leave.
Kind regards,
GRC|LEGAL