The Constitutional Court annulled Article 27, paragraph 1 of Law No. 5718 on Private International and Procedural Law (“PIL”) as unconstitutional in its decision dated 05/11/2025 and published in the Official Gazette dated 10/03/2025. The relevant provision gave the parties the right to choose the law in employment contracts, without prejudice to the minimum protection provided by the law of the employee’s habitual place of work. The Court emphasized that the employee does not have equal bargaining power with the employer and may not have complete freedom of choice of law, and concluded that this provision did not adequately protect the employee and violated the principle of worker protection and the state’s obligation to protect employees, as the employer’s choice of law limited the employee’s rights arising from the law of the habitual place of work. It is also stated that the workers may not have sufficient information about the content of the foreign law chosen and this may lead to loss of rights.
1. Annulled Article 27/1 and Grounds for Annulment
The annulled provision of Article 27/1 of the PIL reads as follows: “The employment contracts are subject to law which is designated by parties as long as the provisions which foresee the minimal protection due to statutory provisions of his habitual work place law are reserved.” The Constitutional Court ruled for the annulment of the relevant provision by evaluating that granting the parties the right to choose the law in employment contracts pursuant to the aforementioned provision may have consequences to the detriment of the employee due to the imbalance of power between the employee and the employer.
In this decision, the Constitutional Court considered the weak negotiation power of the employee due to the fact that the employee does not have free will regarding the contract terms offered by the employer as an important factor in practice, even though the right to choose the law belongs to the parties on paper.
The Constitutional Court also emphasized the risk that the worker’s rights cannot be effectively protected in the event that the foreign law contains provisions to the detriment of the worker, as the workers do not know exactly what kind of rights the chosen foreign law provides for them.
The Court also drew attention to the fact that the relevant provision excludes the more closely related law pursuant to Article 27/4 of the PIL. Pursuant to Article 27/4 of the PIL, the judge may apply the law more tightly related to the employee in the absence of a choice of law. The Constitutional Court concluded that the exclusion of this protective provision limits the rights of the employee when employers make a choice of law in order to subject the employee to a less protective law.
Finally, the annulled regulation was also found to be contrary to the state’s obligation to raise the standard of living of workers and to protect the worker as per Article 49 of the Constitution. The Constitutional Court found that the regulation in question did not provide a reasonable balance in employee-employer relations and did not sufficiently guarantee the protection of the worker.
2. Article 27/2 and Grounds for Not Being Annulled
Article 27/2, which has not been annulled, reads as follows: “In cases where the parties have not designated a law, the law of the habitual work place of the employee shall govern the employment contract. In case the employee is temporarily working abroad, this work place will not be deemed as the habitual work place.” The relevant regulation stipulates that in the absence of a choice of law, the law of the employee’s habitual place of work shall apply.
While deciding that Article 27/2 of Law No. 5718 is in conformity with the Constitution, the Constitutional Court firstly took into account the discretionary power granted to the judge. Article 27/4 of the Law authorizes the judge to apply the more tightly related law when the parties have not made a choice of law. This power was considered as an important mechanism to ensure the protection of the worker.
In addition, it is stated that the application of the law of the employee’s habitual place of work serves to protect the employee from uncertainty. In the event that the parties do not make a choice of law, it is stated that the application of the law of the place where the worker is habitually employed is a guarantee that protects the worker against unforeseen loss of rights. In line with these reasons, the Constitutional Court concluded that paragraph 2 of Article 27 is in conformity with the Constitution and decided to keep the provision in force.
3. Consequences of the Decision
The Constitutional Court annulled paragraph 1 of Article 27 of Law No. 5718 and ruled that the decision shall enter into force 6 months after its publication in the Official Gazette. On the other hand, paragraph 2 remains in force and it has become certain that the law of the employee’s habitual place of work will continue to apply in the event that the parties do not make a choice of law.
With this annulment decision of the Constitutional Court, the possibility for the parties to make a direct choice of law in employment contracts with foreign elements has disappeared. However, the Court did not suggest that the choice of law should be completely prohibited; on the contrary, the Court emphasized that new regulations shall be made to ensure the protection of the worker. In this context, it is envisaged that new legal regulations that will guarantee the rights of workers will be implemented in the upcoming period.
4. Dissenting Opinions
In their dissenting opinions, some justices opposed the annulment decision and emphasized that the protection of the employee can be ensured through public order intervention in labor law and stated that the choice of law should be based on the will of the parties and should not be restricted since the employee has the right to freely contract with the employer. Furthermore, it was pointed out that international regulations such as the Rome I Regulation recognize the choice of law in employment contracts and the issue of contradiction with international law was raised. Finally, it was criticized that the prohibition of choice of law would create more uncertainty rather than protecting the employee.
5. Evaluation
This decision of the Constitutional Court is an approach that aims to protect the employee and it is taken into consideration that the employee may be subject to less protective law through choice of law since he/she is the weaker party in labor law. However, the decision has been criticized on the grounds that it may also prevent the choice of law in favor of the employee and limit the freedom of contract. In this context, it is considered that a new legal arrangements shall be made to protect workers’ rights in the upcoming period.
