NEWSLETTER-2020-metin

Penalty Clauses Related to Termination of Employment Contracts in Light of the Unification of Case Law* Att. Ece Özsü Introduction In its decision dated 08.03.2019, numbered 2017/10 E and 2019/1 K. (“General Assembly Decision”) the Court of Cassation General As- sembly on the Unification of Case Law (“General Assembly”) decided that, “the penalty clause on unjust termination prior to the anticipated term of the contract” in employment contracts that are signed for a fixed-term, but accepted as indefinite-term contracts due to the lack of objective conditions, is valid for the period fixed in the contract. The General Assembly Decision is published in the Official Gazette dated 18.07.2019 and numbered 30835. Fixed-term, Indefinite Term, and Minimum Term Employment Contracts Employment contracts may be concluded for a fixed term or an indefinite term, within the limitations prescribed by law. According to Turkish Labor Law (“Labor Law”) numbered 4857, a contract is deemed to be for an indefinite term if the employment relationship is not established for a certain period of time 1 . The general rule is that employment contracts are concluded for an indefinite term; mean- while, fixed-term employment contracts are subject to certain objec- tive conditions. In order to conclude an employment contract for a fixed-term, the nature of the job to be dealt with should be limited to a certain period; in other words, it should be predictable by the parties when the job will be completed, or the employment contract must be made for the completion of a specific job, or the employment contract * Article of January, 2020 1 Labor Law Article 11/1.