Fixed Term Employment Contract - Indefinite Term Employment Contract
Primary Employer & Sub-Employer
For employers to carry out their business relations in accordance with the regulations of Labor Law No. 4857 (“Labor Law”), they should be aware of the basic concepts and their scope. Terms such as employment contract, employee, employer, fixed term employment contract - indefinite term employment contract, subcontractor, employer representatives and workplace are commonly used. Sometimes, however, these concepts are not understood as defined by the law, which may cause serious conflict. Therefore, the scope of these definitions must first be determined so that business relations are based on a solid grounding and all parties will be able to better comprehend the framework of their business relations and be more aware of their rights and responsibilities.
An employment contract is defined in Article 8 of the Labor Law and Article 393 of the Turkish Code of Obligations No. 6098 (“TCO”). According to these regulations, an employment contract is one in which one party undertakes to work as a dependent and another party undertakes to pay wages.
As it can be seen, in order for a contract to be considered an employment contract it must include service, wage, and dependency elements. In the presence of these elements, the relationship between the parties will be considered an employment contract and the parties will be referred to as employees and employers. The most significant element that distinguishes an employment contract from other service contracts is the dependency. The meaning of dependency is the personal and legal dependence of an employee. An employee fulfils his obligation to work under the authority, management, and supervision of an employer. An employee's obligation to comply with an employer's orders and instructions and loyalty to an employer also indicate dependency here.
An employee is an individual who undertakes to work for a certain period, or continuously, depending on the employer in return for a wage. An employee personally undertakes to work under the order and direction of an employer.
All employees whether white or blue collared are defined as employees in labor law. Senior executives working under an employment contract are also legally qualified as employees. An exception to this is employer representatives, which is defined below.
The concept of employee is also a major element in terms of collective labor law. The main regulations in collective labor law are included in Law No. 6356 on Unions and Collective Labor Agreements (“Law No. 6356”). Individuals who are defined as employees under labor law are also considered as employees under Law No. 6356. However, in addition to these, employees that work without an employment contract in transportation, independent contract work, procuratorship, publication, commissioning, and persons who carry out independent and professional activities are also accepted as employees in some parts of Law No. 6356. In this context, the concept of employee in collective labor law includes a wider scope than in individual labor law.
Employers are the real or legal persons that employ workers based on an employment contract, or institutions and organizations that do not have a legal personality. In accordance with this definition, public institutions that do not have a legal personality are also considered as employers. In the case of legal entities employing individuals the title of employer belongs to the legal entity, not the company shareholders.
In certain business relations we see that more than one person or entity may seem to be an employer. This scenario usually arises when an employee works for more than one company within a holding company. In such circumstances, each company in which the employee fulfils their duty of employment is considered as an employer within the scope of this relationship. This is called co-employment.
According to labor law, the main rule for employment contracts is that they are established for an indefinite period. However, contracts may be established for a certain period of time in the presence of some objective conditions. Fixed-term employment contracts are subject to a duration stipulated by the parties that terminates without notice.
In line with labor law principles, fixed-term employment contracts must be agreed in written form. Moreover, with Article 12 of the law, it has been acknowledged that no distinction can be made between employees working on fixed and indefinite-term employment contracts, simply because an employment contract is temporary, this regulation is a requirement of the equal treatment principle which prevails in Turkish law. In a fixed-term employment contract, the term may be decided explicitly or implicitly. These types of contracts must be for the completion of a certain job or the occurrence of a certain event.
The general principle is that a fixed-term employment contract should be made for a single term, if not precluded by other exceptions in the law. Renewing a fixed-term employment contract will result in changing the contract status to an indefinite term as applied by supreme court decisions. This will result in notice period requirements in the event that any party would like to terminate the contract.
Primary employers may use sub-employers to assist with the production of goods and services in the whole or part of the workplace for ancillary services and technical assistance.
A subcontractor - contractor relationship can only take place in situations where labor law allows. A subcontractor - contractor agreement signed without meeting legal requirements is defined as a collusive subcontractor relationship, and a subcontractor’s employees will be considered to be the employees of the primary employer. In principle primary employers are liable for the acts of sub-employers collectively with the sub-employers.
Details of the subcontractor – contractor relationship will be explained expansively in the next articles in the CETINKAYA Employment Law Series.
The correct determination of the employer representative concept is of great importance for the resolution of disputes arising from employment contracts, especially in employment security and re-instatement cases. The examination of the concept of employer representative should be carried out separately in terms of individual labor law and collective labor law.
Under labor law, an employer representative is defined as a person acting on behalf of an employer and taking part in the management of the business, the workplace, and the enterprise. In this respect, the representative of the employer must be authorized by the employer and also take part in the management of the work, the workplace, and the enterprise.
In the presence of the above conditions, employer representatives will be excluded from employment security and will not be able to file a reemployment lawsuit. However, in labor law, not all employer representatives are excluded from the scope of employment security. If, and only if, employer representatives and their assistants who manage and lead an entire enterprise or workplace also have the authority to recruit and dismiss employees, they will be excluded from the scope of employment security. Employer representatives who do not have this authority may benefit from employment security and thus they may file re-instatement lawsuits against an employer.
The workplace and workplace coverage are crucial for labor law practice. The workplace is a unit in which material and non-material elements and employees are organized together by the employer to produce goods or services. Labor law considers places connected to the workplace as well as other extensions and tools such as areas for resting, breastfeeding, eating, sleeping, washing, examination and care, physical and vocational training, and courtyards as the workplace. All of these elements together are evaluated as the workplace as a whole within the scope of the organization. The definition of the workplace is of the utmost importance in determining working hours and workplace accidents. Home offices and how they fit into the scope of the workplace will be explained expansively in the next articles in the CETINKAYA Employment Law Series.
Ultimately, the importance of basic concepts in labor law are of great value in terms of business relationships and the essential elements of employment contracts. It is clear that the primary source determining the elements of employer-employee relations is labor law and its basic concepts. One of the first conditions for employers to fully understand their rights and responsibilities is their familiarity with these concepts. The evaluation of matters such as determining the rights and responsibilities of parties, occupational health, job security, reemployment cases, compensation and many more will be completely shaped by the framework of these concepts. Correct diagnosis of those elements will lead to correct analysis. In this context, determining issues such as what constitutes an employment contract and what types of employment contract exist, who qualifies as employees or employers, who qualifies as an employer representative, and which departments are within the scope of the workplace will provide clear vision for employers to act in accordance with the present legislation.