An Overview of the Turkish Legal Framework - Business & Human Rights Series 2
Altug Ozgun,Atakan Gungordu
An Overview of the Turkish Legal Framework
The first article in our Business & Human Rights series explored the legal trend towards holding businesses accountable under international human rights law, and outlined why businesses should respect human rights even in cases where there is a regulatory gap and no binding rules. Building on that, in this article we will provide an in-depth analysis of how businesses could be held responsible for human rights abuses under Turkish law in the absence of any domestic human rights legislation directed at business.
1. Business & Human Rights in Turkey: Fragmented Accountability
Legislative and policy developments with regard to business and human rights in Turkey lag behind in comparison to many European countries. Turkey has not introduced any mandatory human rights due diligence laws nor has it established a national action plan as per the UN Guiding Principles.
The concept of corporate social responsibility (CSR) is still the focus of business responsibility in respect to human rights in Turkey. Numerous companies operating in Turkey engage in voluntary philanthropic deeds based on CSR to enhance their corporate reputation and image. However, there is a significant regulatory gap in Turkey as international legal “obligations” have not become national laws that place duties on businesses or create any cause for action against them.
With that said, a lack of explicit national hard laws on business and human rights does not spare companies from legal risks they may face for their adverse human rights impact. The Turkish domestic legal system offers a number of legal avenues for victims of business-related human rights abuses even though such claims do not use human rights law terminology. The main legal avenues available are addressed below.
1.1. Private Law Liabilities of Businesses for Human Rights Violations
1.1.1. General Tort Liability
While tort law and human rights may seem like they are unrelated areas of law, the reality is the opposite. In essence, tort law obliges businesses not to infringe on individuals’ rights through unlawful acts. Of course, not all human rights can be regarded as claimable rights under tort law but there is a significant overlap between the two.
With this dynamic in mind, tort liability for business, in relation to human rights violations, arises under Turkish law if the four conditions in Article 41 of the Turkish Code of Obligations (Law no. 6098) are met in a given case. These conditions are (i) the existence of an unlawful act, (ii) loss of an injured party, (iii) the fault of a perpetrator, and (iv) a causal link between an unlawful act and an injured party’s loss. Once these conditions are met, a business can be held accountable for its adverse human rights impact and ordered to pay monetary compensation to its victims.
However, in comparison to tort law cases faced by corporations in the United States, United Kingdom, Netherlands and other Western states, general tort liability is an under-explored area in Turkey in business-related human rights cases.
1.1.2. Employer Liability
The Turkish Labour Code (Law no. 4857) and the Occupational Health and Safety Code (Law no. 6331) provide safeguards against certain human rights violations in the workplace. Needless to say, employment law has an established regulatory framework that often overlaps with human rights law. Our article on employment relations legislation that businesses must be aware of provides a sound overview of this complex regulatory framework.
The Turkish Labour Code provides explicit provisions with regard to the protection of human rights in employment relations. In line with the principle of equality before the law under Article 10 of the Turkish Constitution, Article 5 of the Turkish Labour Code stipulates that “discrimination based on language, race, sex, political opinion, philosophical belief, religion, religious sect, and similar reasons is prohibited in employment relationships”. Also, the same provision explicitly prohibits unequal pay for equal work based on the gender of employees. If an employer is in breach of Article 5 of the Turkish Labour Code, an affected employee has the right to claim up to four months of salary as compensation, in addition to claiming their other rights.
Moreover, “the protection of the worker” is a fundamental principle in Turkish labour legislation. In this respect, the Occupational Health and Safety Code provides various safeguards against occupational accidents and hazards. Though it would be beyond the aim of this article to name each safeguard, in general, businesses are required to comply with a strict regime of health and safety standards in the workplace, which include conducting occupational risk assessments and employing occupational health and safety experts.
If an occupational accident occurs, an employer will be held liable under Turkish labour legislation unless all of the requirements of the legislation have been met, and the accident is considered to be “unavoidable” based on a scientific examination. Therefore, it is of the utmost importance for businesses to fully assess their risks in line with relevant labour regulations, and to conduct human rights due diligence within the workplace in an ongoing basis to mitigate and prevent any of these risks from actualizing.
1.1.3. Liability under the Turkish Commercial Code
Under the Turkish Commercial Code (Law no. 6102), Article 371/5 states that a business would be held liable for tortious acts committed by anyone authorized to represent or manage the business. This provision expands the liability of businesses, but it only includes tortious acts that authorized persons commit within the scope of their duties.
Accordingly, anyone authorized to represent or manage a business is obliged to act based on a duty of care towards the benefit of the business as per Article 369/1 of the Commercial Code. This inevitably requires directors and managers of businesses operating in Turkey to ensure full compliance with human rights standards in order to avoid any legal liability.
1.1.4. Liability under the Personal Data Protection Code
Turkey enacted the Personal Data Protection Code (PDPC) (Law no. 6698) in 2016 which largely follows in the footsteps of the European Union’s GDPR. This has been a significant regulatory step in the protection of privacy rights in Turkey. Businesses operating in Turkey have allocated significant time and resources to comply with the PDPC since non-compliance comes with hefty administrative fines enforced by the regulatory watchdog, the Personal Data Protection Authority.
The administrative fines under Turkey’s PDPC with regard to personal data security and unlawful processing of such data can go up to almost 2 million Turkish Liras (approx. 200,000 EUR) as per Article 18 of the law. Moreover, in line with the enactment of the PDPC, Turkey has introduced a number of criminal provisions to the Turkish Criminal Code (TCC) (Law no. 5237). In this regard, unlawful processing of personal data carries a prison sentence of up to three years and dissemination of such data is punishable by up to four years in prison as per Article 135 and 136 of the TCC, respectively.
1.2. Criminal Liabilities of Businesses for Human Rights Violations
Much attention has been paid above to businesses’ civil liabilities for human rights violations, so now it is time to address criminal law. Under Article 20 of the Turkish Criminal Code legal entities cannot be held criminally liable. Accordingly, Article 60 of the Criminal Code stipulates that only two types of security measures may be applied against legal entities: (i) annulment of public permits, and (ii) confiscation of goods acquired through crime.
However, the absence of criminal liability for businesses does not exclude their directors and managers from being held criminally liable for a business’ involvement in a crime. In order for authorized personnel to be held criminally liable, their intent or negligence along with the causal link between their actions and a crime must be established in criminal proceedings.
Crimes that could become relevant in a company’s activities are wide-ranging. In cases of occupational hazards, negligent manslaughter or criminal injury provisions may be invoked. In cases of violence and harassment at work, criminal law provisions on defamation, duress, extortion, torment or discrimination may be relevant. In terms of economic crimes, bribery, money laundering, and tax evasion are among the criminal provisions that carry significant prison sentences.
With regard to criminal liability, businesses should be aware of one very crucial point: even though charges are not officially levelled against a business itself, if a manager, director or an employee of a company is charged with an alleged crime, the company will, without a doubt, suffer significant reputational harm. Such incidents can very well signify the end of halcyon days and the start of a gloomy future for a company. The collective memory of Turkish citizens is not short of stories about the crimes of business executives that ruined their companies altogether.
It is evident that Turkey’s national laws and policies are slow in aligning the business world with current international developments to hold businesses accountable for their human rights violations. Nonetheless, businesses still face human rights litigation risks through various national legislation that we have discussed above.
Sure, most of these liabilities are indirectly linked to human rights, do not use human rights law language and the chance of success for claims may be slim. But what poses a greater risk for businesses is the reputational harm, toxic culture, lack of employee engagement and terrible publicity that comes with having been sued by human rights advocacy groups or the victims themselves.
In this sense, it is highly advisable that companies operating in Turkey have a robust human rights compliance strategy based on the UN Guiding Principles on Business and Human Rights along with the awareness of legal consequences, in order to “know and show” before Turkish courts that they have taken all measures reasonably expected of them and discharged their duty of care.