TERMINATION OF EMPLOYMENT AGREEMENT DUE TO THE DOWNSIZING OF WORKPLACE
Briefly state the legal regulation about the termination of employment agreements by the employer; according to the Employment Code No. 4857 in Turkey, an employee who work in a workplace that has more than 30 employees and who has seniority more than 6 months, is under employment security. An employer may terminate legally the employment agreement of an employee under employment security by two ways; termination with rightful reason and termination with valid reason. Termination with rightful reason is possible with limited cases regulated in the Article 25/II of the Employment Code No. 4857. Termination with valid reason is not limited by the codes but it is possible with the Supreme Court practices if there is no other remedy but termination; related to the cases such as employee’s behaviour and performance, the economic situation of the workplace, etc. The most important difference between the rightful termination and the valid termination is to; while in the rightful termination, the employer may terminate the agreement without paying the severance pay to the employee and waiting the notice period, but in the valid termination, the employer must pay the employee the severance pay and must allow the employee to work by the notice period or pay the employee the notice payment.
Termination due to the downsizing of workplace is not one of the limited cases regulated in the Article 25/II of the Employment Code No. 4857. Therefore, termination due to the downsizing of workplace should be considered as the termination with the valid reason. According to the Supreme Court’s settled practices;
In order for the termination to be based on a valid reason, the termination must be an ultimate remedy. (ultima ratio) If it is possible for the employer to assign employee in another department or in another position instead of termination, the employer should use this option. Otherwise, the termination would not be valid.
The management body of the workplace should take an operational downsizing/contraction resolution. The termination that is not based on such resolution would not be valid.
- Within the 6 months periods before and after the termination; the employer should not recruit any employee to the same or equivalent category department of the employee whose employment agreement has been terminated. Otherwise, the termination would be invalid due to the contrary to the principle of Ultimate Remedy. (ultima ratio)
- In addition to the downsizing/contraction resolution stated above, there should be downsizing on profit, turnover, tax assessment vs. of the workplace.
- Instead of all employees’ agreement in a department, if the employment agreements of some employees will be terminated due to downsizing; the employer should be objective, and determine the social selection criteria, and act moderately to determine employee whose employment agreement would be terminated. What is meant by objective, social selection criteria; who are singles, marrieds but childless, close to retirement, on probation period, out of job security, got disciplinary punishment, etc. could be the criteria.
If the employer does not comply with these criteria and terminates the employment agreement without valid reason, the employee has the right to file a reemployment lawsuit. If the court rules on reemployment of employee and hereunder, if the employee applies for reemployment to the employer, the employer should either reemploy the employee and pay idle time fee for up to 4 months; or reject the application and pay the compensation for not to reemploy which is between 4- and 8-months fee to be determined by the court and idle time fee for up to 4 months.
