In Comparison: Turkish and German Employment Law
Turkey remains a popular investment destination for foreign investors, in part because of its geo-strategic position, the many qualified specialists among its younger, technology-savvy population, and also because of its dynamic domestic market. Due to all of these factors, innovative companies often find that their investments pay off handsomely in Turkey. Businesses planning a subsidiary in Turkey will quickly run into a challenge, however: when it comes to personnel management and the legal provisions surrounding employment, there are both some key similarities and some key differences between German and Turkish employment law. For an overview of some critical points you should be aware of, Christof Kleinmann and Dr. Gökce Uzar Schüller offer their insight.
Between German and Turkish employment laws, there are some notable similarities but also many differences. The Turkish Employment Act of 2003 built on German labor provisions in some areas, such as in cases of termination and protection against dismissal. Other areas, such as some of the compensation laws for departing employees, are completely unknown in German law.
Overall, Turkish labor laws -- especially in practice -- are clearly more employer-friendly.
Employment contracts:
As in Germany, the following applies: Employment contracts may be concluded orally or in writing, but each contract should be in writing so that is clear as to what has been agreed upon.
For temporary employment, a written contract is always required in Germany for the time limitation to be effective. This is true in Turkey only for fixed-term contracts of more than one year.
Turkish Employers have to make a decision more quickly as to whether a new employee fits into the company. For individual contracts, the trial period ends after two months at the latest. Even with regards to payment contracts, trial periods in Turkey have a maximum length of four months, as opposed to the six months that are standard in Germany.
Work Hours:
According to German labor laws, a standard work day is 8 hours, resulting in a maximum work week of 48 hours. The maximum weekly working time in Turkey is 45 hours per week.
In Turkey, employees cannot legally work more than 270 overtime hours in a year. This number must not be exceeded. If no overtime pay is specified in the contract, the employee is entitled to wage supplements of 50 percent.
In Germany, overtime hours are compensated if circumstances dictate that compensation should be expected for those hours.
Termination:
In both German and Turkish law, employment can be terminated through ordinary or extraordinary termination, through mutual agreement, through death or if temporary contracts have reached their expected end.
Permanent contracts may be terminated with notice under specific deadlines. The deadlines for termination by the employer are calculated according to the duration of employment. These are the periods in Turkey, which are similar to German periods:
- 0 - 6 months: 2 weeks
- 6 months - 1.5 years: 4 weeks
- 1.5 years - 3 years: 6 weeks
- More than 3 years: 8 weeks
If these deadlines are not met, damages may be claimed.
The rules pertaining to an extraordinary termination also show how Turkish labor law builds on German law. The parties to the employment contract may terminate the employment relationship without notice, so long as a valid reason exists. The scenarios that constitute valid reasons for termination are listed both in Turkish and in German law.
While under German law, termination can only be done within two weeks of becoming aware of the reasons for said termination, in Turkey the parties to the employment contract have to declare the termination without notice within six days after becoming aware of the grounds for termination, but not later than within one year. The notice must be given in writing.
Protection from dismissal:
In Turkey, there is a special dismissal protection for employees who have been employed at the same company for more than 6 months. However, this protection comes into effect only at companies with more than 30 employees, to the advantage of employers. In Germany, employees can already claim this protection from dismissal if there are more than 10 employees at the same company.
Within one month after termination, complaints against unfair dismissal may be filed (in Germany, it is within three weeks). If the complaint is successful, the employer must reinstate the employee, or, if he or she does not want to, the employer must instead offer the employee a court-mandated compensation, which will be between four and eight month's wages. In addition, there is compensation for missed working hours.
Compensation:
If an employee in Turkey was employed for a minimum of 12 months, compensation regulations in Turkish law must be observed. Employers are obliged in this case to pay seniority severance (Kıdem Tazminatı). This compensation is made up of 30 days of salary per year of employment, with a maximum payment of approximately 3,438.22 TL (nearly 1,200 €) per year, effective June 2014.
Seniority compensation is also payable when employees have given notice for legitimate reasons (such as compulsory military service for men, retirement, marriage for women) or based on health or compelling reasons.
Vacation:
One peculiarity of Turkish vacation law is that the legal minimum amount of vacation days depends on the length of employment. Employees in Germany are entitled to a legal minimum of 24 workdays (4 weeks) of vacation. Employees in Turkey are only entitled to a minimum of 26 vacation days when they have worked at the company in question for 15 years. The initial minimum allotment of vacation days is 14 work days, which is extended to 20 days after the employee has been at the company for five years.
German workers can claim their vacation days at the end of a six-month waiting period. In Turkey, employees must wait a year. Thus, in this respect as well, Turkish labor law is employer-friendly.
Minimum wage / Social security contributions
Turkey has had a statutory minimum wage for many years, in contrast to Germany. As of June 2014, the monthly minimum wage is TL 1,071.00 gross per month (approximately 370 euros) and 846 TL net (about 290 euros). However, the minimum wage is adjusted every six months.
Employers pay for their employees' social security through a contribution of about 18.5 percent of the gross salary to the so-called SGK (Sosyal Güvenlik Kurumu). The employee's share is 14 percent. While in Germany employers and employees share contributions of 3 percent to unemployment insurance, in Turkey, employers pay a larger amount to unemployment benefits, 2 percent of gross salary. Employees pay 1 percent of their gross salary to the unemployment insurance.
About the authors:
Christof Kleinmann is a lawyer who specializes in labor law in the Frankfurt office of GvW Graf von Westphalen. Since 2009, he has been the managing partner of the firm. He advises companies and entrepreneurs across the spectrum of employment law, with one of his focuses being on advising Turkish companies about German labor law.
Dr. Gökce Uzar Schüller is a lawyer in the Munich office of GvW Graf von Westphalen. She advises companies on Turkish laws as it pertains to their market entry into Turkey as well as Turkish investors in their international operations. In addition, Dr. Uzar Schüller leads the Turkey desk at GvW and has a strong experience in the German-Turkish legal relations. In the following article, the two offer a primer on key differences and similarities between Turkish and German employment law.