I. INTRODUCTION
Türkiye began sending employees abroad within the framework of work force agreements starting from the early 1960s. Especially in recent years, with the growth of the Turkish contracting sector in the international arena, the rate of Turkish employees being sent to work abroad has increased rapidly. This development has been further accelerated by the deepening of economic, commercial, political, and cultural relations between countries. Thus, the number of Turkish employees wishing to work abroad has risen inevitably.
However, this situation has made the determination of the applicable law for employment contracts with foreign elements an important issue. In this context, a general overview of employment contracts containing foreign elements is presented below.
II. A GENERAL OVERVIEW OF CONTRACTS INCLUDING FOREIGN ELEMENTS
Employment contracts, unlike other contracts governed by obligations law, inherently involve social and economic inequalities between the parties. This inequality arises because one party provides its workforce while the other provides capital and organization. As a result, the party provides its workforce finds itself in a weaker position often and lacks the power to bargain with the employer. Turkish employment law regulations, taking into account this imbalance, give weight to mandatory provisions and create a solid basis for the protection of employees’ rights in accordance with the principle of beneficence.
The determination of applicable law in employment contracts with foreign elements has consistently been a subject of judicial proceedings. When examining the process related to this issue chronologically, the following can be stated:
• In the past, decisions were made that Turkish law should be applied to these disputes. However, this was criticized for disregarding the country where the employees are employed and for disregarding the provisions of Law No. 5718 on International Private Law and Procedural Law
(“MÖHUK”).
• Since late 2020, the Supreme Court has begun to shift from this settled case law and this development was generally welcomed. However, the inclusion of choice of law clauses in contracts prepared by the Turkish Employment Agency (“İŞKUR”) as part of general terms continues to keep this issue contentious. Despite the reversal of the 9th Civil Chamber of Supreme Court, the Regional Courts of Appeal have resisted this situation.
1 Y. 9. HD, E.2016/15095, K.2016/20715, 24.11.2016, (www.lexpera.com.tr, Erişim tarihi: 17.10.2024); Y 9. HD, E.2016/22007, K.2016/19549, 08.11.2016, (www.lexpera.com.tr, Erişim tarihi: 17.10.2024); Y. 9. HD, E.2012/15508, K.2012/36421, 06.11.2012, (www.lexpera.com.tr, Erişim tarihi: 17.10.2024).
2 Y. 9. HD, E.2020/5617, K.2020/16556, 24.11.2020, (www.lexpera.com.tr, Erişim tarihi: 17.10.2024); 9. HD, E.2022/3339, K.2022/3862, 22.03.2022, (www.lexpera.com.tr, Erişim tarihi: 17.10.2024).
• As a result, in 2023, a dispute regarding an employee taken abroad was brought to Supreme Court Assembly of Civil Chambers and it was concluded by a majority of votes that the choice of foreign law was valid. However, the comprehensive dissenting opinion written in the General Assembly indicates significant divisions of opinion on this matter.
• Currently, the decision of 9th Civil Chamber of Supreme Court E.2024/7673, K.2024/10230, dated 27.06.2024, provides an important perspective on determining the applicable law and sheds light on the ongoing discussions about which law should apply in employment contracts with foreign elements. Within the scope of this article, this decision will be discussed and the applicable law in disputes with a foreign element will be evaluated, taking into account the opinions in the doctrine.
III. EMPLOYMENT CONTRACTS WITH FOREIGN ELEMENTS:
For a dispute involving a foreign element to arise, there must be multiple legal systems associated with a specific legal event or relationship.
When evaluating this within the context of employment contracts, the foreign element may arise if the employee or employer is foreign, if the employer’s place of business is located in a foreign country, if the employee typically performs the work in a foreign country, or if the employment relationship is closely connected to a foreign country. The concept of a “habitual workplace” refers to the location where the employee actually carries out their duties. Thus, the foreign
3 Y. HGK, E.2022/873, K.2023/424, 10.05.2023, (www.lexpera.com.tr, Erişim tarihi: 20.02.2024).
In the decision of 9th Civil Chamber of the Supreme Court E. 2020/5617, K. 2020/16556, dated 24.11.2020, it was stated that when it is understood from the overall situation that the employee or employer is foreign, the employer’s business center is in a foreign country, the employee typically performs their work in a foreign country, or the employment relationship is closely connected to a foreign country, then the employment contract contains a foreign element.
In the decision of the 9th Civil Chamber of the Supreme Court E. 2021/5065, K. 2021/9195, dated 18.05.2021, the concept of habitual workplace is explained as follows: A habitual workplace is the workplace where the work is predominantly performed in terms of time and content. In other words, the habitual workplace is the place where the employee actually performs his/her work. The manner and currency in which the wages of the employee are paid is not determinative for the determination of the habitual workplace.
IV. COMPETENCE
Article 6 of Law No. 7036 on Employment Courts (“Law on Employment Courts”) establishes a definitive jurisdiction rule aimed at protecting employees by determining the competent courts for cases to be filed in employment courts. According to this provision, the courts of the defendant’s residence and the court of the place where the work is performed are competent. However, this provision does not apply in disputes involving foreign elements. In paragraph 4 of the relevant article, it is stated that other legal regulations regarding the jurisdiction of employment courts are reserved, emphasizing that Article 6 of the Law on Employment Courts does not have an exclusive jurisdiction nature in terms of the MÖHUK.
The international jurisdiction of Turkish courts regarding disputes arising from individual employment contracts or employment relations is regulated in Article 44 of MÖHUK. This article provides for certain courts to be competent, aimed at protecting the weak position of the employee. In lawsuits filed by employees against their employers, the competent courts are the court of the place where the employee regularly performs their work, the court of the employer’s residence, or the court of the employee’s residence. Thus, flexibility and ease in initiating lawsuits for employees are ensured. On the other hand, in lawsuits filed by the employer against the employee, only the court of the employee’s habitual workplace is competent.
Article 44 of MÖHUK is considered a limited jurisdiction rule aimed at protecting employees. Furthermore, the second paragraph of Article 47 of MÖHUK emphasizes that jurisdiction agreements made to determine the competent court cannot exceed the limits set to protect the employee’s weak position.
Finally, according to Prof. Dr. Cemal Şanlı’s view, it is not possible to recognize and enforce in Türkiye the judgments obtained from a foreign court against the employee in violation of the exclusive jurisdiction rule regulated under Article 44 of the MÖHUK because the exclusive jurisdiction rule is intended to protect the employee. However, there is no obstacle to the enforcement of foreign court judgments in favor of the employee in Türkiye. In this context, these regulations are of great importance in terms of protecting the rights of employees and ensuring justice.
V. THE PATH TO FOLLOW REGARDING THE EMPLOYMENT CONTRACTS WITH FOREIGN ELEMENTS
In cases where the employment relationship involves a foreign element, it is necessary to examine Article 27 of the MÖHUK titled “Employment Contracts” The relevant article is as follows:
Article 27- (1) 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.
(2) 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.
(3) In cases where the employee is working constantly in several countries without working habitually in one country, the employment contract is subject to law of state where the main work place of the employer is located.
(4) In consideration of all circumstances if there is a law more tightly related to the contract, instead of the provisions in second and third clauses, that particular law shall govern.
As can be understood from the four paragraphs mentioned above, the following laws will be applied in employment contracts with foreign elements:
i. The Law Chosen by the Parties:
In employment contracts with foreign elements, the first step is to determine whether the parties have made a choice of law. At this point, the law chosen is recognized as having limited effect, due to concerns about imposing a law that may be detrimental to the employee, who is presumed to be in a weaker economic position.
ii. If the Parties Have Not Made a Choice of Law, the Law of the Employee’s Habitual Workplace Applies:
This provision highlights an important point in determining which country’s law governs the employee’s rights under employment law. While the place where the employee habitually works constitutes the basis of the law to which the employee is bound, the fact of working temporarily in another country does not change the law of the employee’s main place of work. Factors such as the duration of employment, the nature of the work, and how much time the employee spends in each country are critical in determining the habitual workplace. Prof. Dr. Cemal Şanlı’s views contribute to a clearer understanding of the complexities in employment law by demonstrating that the country in which the employee uses his/her workforce most intensively should be evaluated. This approach is also significant for the consistency of legal practices in international employment relations.
iii. If the Employee Does Not Habitually Work but Continuously Works in Multiple Countries, the Law of the Country Where the Employer’s Main Workplace is Located Applies:
According to the 3. paragraph of article 27 of MÖHUK, if an employee continuously works in multiple countries rather than solely in a specific country, the employment contract is subject to the law of the country where the employer’s main workplace is located. Here, the main workplace refers to the country where the employer operates centrally.
As an example of this subject, it should be emphasized that the law of the country where the workplace is located is important for seafarers working on the high seas.
iv. If There is a Law More Tightly Related to the Employment Contract, That Law Applies:
The term “more tightly related law” refers to the law that has the closest connection to the specific case. The legislator has granted judge’s discretion in applying the law that is more closely related to the employment contract, and it is accepted that the employee’s interests must be considered when exercising this discretion. According to a view, the aim is to lean towards the law that provides better protection for the employee.
For example, if the employee’s social environment is in Türkiye, they are included in the Turkish social security system, their salary is paid in Turkish Lira, the employer is a Turkish citizen, the employment contract is prepared in accordance with Turkish law, there is a reference to a previously made contract under Turkish law, and the contract is written in Turkish, all or a significant portion of these factors would suggest that the employment contract has a strong connection to Turkish law.
VI. REVIEW OF THE DECISION
Güncel olarak, Yargıtay 9. Hukuk Dairesi’nin E.2024/7673, K.2024/10230, 27.06.2024 tarihli kararında durum özetle şu şekildedir: Davacı işçi, davalı işverenin yurt dışında bulunan şantiyesinde çalıştığını ve bu çalışması süresince ücretinin Amerikan Doları olarak ödendiğini belirterek, ödenmeyen ihbar tazminatının mahkeme tarafından hüküm altına alınmasını talep etmiştir. Davalı işveren ise, işçinin yurt dışındaki projelerde çalışması sebebiyle uyuşmazlığın yabancı hukuka göre çözülmesi gerektiğini savunmuştur.
İlk Derece Mahkemesi, davalı vekilinin bu savunmasına değer vermeksizin, uyuşmazlığa Türk hukukunu uygulamak
Currently, in the decision of the 9th Civil Chamber of the Supreme Court of Appeals dated E.2024/7673, K.2024/10230, 27.06.2024, the case is summarized as follows: The plaintiff employee stated that he worked at the defendant employer’s construction site abroad and that his salary was paid in US Dollar during this period, requesting the court to rule on the unpaid payment in lieu of notice. The defendant employer, on the other hand, argued that the dispute should be resolved according to foreign law since the employee was working on projects abroad.
The First Instance Court completed the proceedings by applying Turkish law, disregarding the defendant’s attorney’s defense, and issued a final decision. However, this decision did not align with the case file. It was established that the plaintiff worked in the Republic of Tatarstan, Russian Federation, from 23.07.2014 to 19.01.2015, and that the work was actually performed in that country. This situation indicates that the dispute should be evaluated under Russian law rather than Turkish law.
The third paragraph of Article 24 of the MÖHUK states that it is possible for the parties to choose or change their choice of law until the merits of the case are examined. When the concrete dispute is evaluated within this framework, the defendant’s counsel objected to the applicable law by requesting the application of the habitual workplace law in the response petition. However, there was no agreement between the parties regarding the application of Turkish law at least by the time of the preliminary hearing.
The employment contracts in the case file cover the dates of 25.07.2014, and 01.01.2025. However, the language of the contracts is Russian, and it has not been proven that the plaintiff employee understands Russian. In this case, even if a choice of law was made in the employment contract, it is not binding on the plaintiff employee.
As a result, there is no valid choice of law in the specific case. According to MÖHUK, unless a law more tightly related to the case is found, the law of the Republic of Tatarstan, Russian Federation, which is the habitual workplace law, should be applied to the dispute. The court’s decision without considering these issues has been deemed unlawful within the scope of Article 363 of the Code of Civil Procedure No. 6100, and therefore, it was stated that the request for appeal in the interest of the law should be accepted, and the decision should be overturned
VII. CONCLUSION
As a result, the increase in employment contracts with foreign elements due to Türkiye’s sending of workers abroad has created a complex process regarding the determination of applicable law. The decisions of the Supreme Court have developed important precedents on how Turkish law and foreign law should be applied. Particularly, if there is no valid choice of law made between the parties to the employment contracts, the law of the place where the employee is actually working is considered applicable. This situation is supported by imperative provisions aimed at protecting workers’ rights. The decision of the 9th Civil Chamber of the Supreme Court of Appeals dated E.2024/7673, K.2024/10230, 27.06.2024, has become an important reference point in determining the applicable law. Ultimately, clarifying the legal framework of employment contracts with foreign elements is critical for both worker rights and international employment relations.
BIBLIOGRAPHY
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