Is the Penal Clause Applicable Regarding the Termination of the Employment Contracts Which Are Deemed to Be Indefinite Termed for Not Fulfilling the Objective Conditions? 17 March 2020
According to Article 11/1 of the Labor Law No. 4857 (“Labor Law”), the contract is deemed to have an indefinite period, if the employment relationship is not established for a fixed term. Whether an employment contract is indefinite termed or not, has importance in case of an indemnity due to termination, benefiting from job security provisions and initiation of a reemployment lawsuit. Article 19 of the Labor Law explicitly mentions termination of an indefinite term employment contract among the conditions for benefiting job security and therefore; it is clear that the employee who is working under a fixed term employment contract, cannot benefit from the provisions of the job security and correspondingly, the right to file a reemployment lawsuit. Likewise, fixed term contract can be used to prevent the legal rights of the employee, as the fixed term employment contract terminates automatically at the end of the term without need for a termination notification and without paying any indemnities, especially severance payment.
According to the second sentence of Article 11/1 of the Labor Law, a fixed term employment contract is a written employment contract between the employer and the employee, depending on the objective conditions as jobs with fixed terms or completion of a particular job or the occurrence of a particular fact. The employment contract signed shall be deemed to be an indefinite term employment contract, if the job mentioned in the article is not for a fixed period of time or for the completion of a certain task and if there are no objective conditions such as the occurrence of a certain phenomenon.
The penal clause is most commonly envisaged in fixed term contracts and minimum term contracts in labor law. The minimum term contracts are intended to prevent unfair termination of the contract before the minimum period determined by the parties. However; in fixed term contracts, it is intended to prevent unfair termination of the contract by the parties before the completion of the specified period of the contract.
In Turkish Labor Law it is principal that the employment contract is indefinite term since it is more favorable for the employees. In this sense, since a fixed term employment contract is exceptional, it can only be concluded if the conditions set out in the law and specified in detail above exist. However, the employment contract shall be deemed to be indefinite termed in the absence of the objective conditions of a fixed term employment contract.
Accordingly, if the employment contract is concluded by the employee and the employer for a certain period of time and the contract provides for the provision of a “penal clause due to unjust termination before the deadline”, although the contract is accepted as an indefinite term employment contract since it does not have objective conditions, hereby, in accordance with the Article 27/2 of the Turkish Law of Obligations No. 6098, partial invalidity sanctions shall be applied and will of the parties shall be excelled and it shall be accepted that the provision of "penal clause due to unjust termination before deadline" remains valid for the agreed period.
Thus; it was decided by Court of Cassation General Assembly of Civil Chamber on the Unification of Judgements’ numbered 2017/10, 2019/1 and dated 08.03.2019 that "penal clause due to unjust termination before the deadline" provision which was determined in the fixed term employment contract thereafter accepted as an indefinite term employment contract since it did not satisfy objective conditions, is valid for the determined period of time.
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