Employment Law Developments in Türkiye: A Look Back at 2024 and Ahead to 2025

2024 brought noteworthy developments in labour law in Türkiye with several legislative updates and important court decisions shaping the legal landscape.

The government expanded the occupational health physician requirements, now making it mandatory for small and low-risk workplaces to employ them, in addition to occupational safety experts. Additionally, authorities revised the criteria for foreign work permits and increased employer contribution rates for short term insurance. On the legal front, the courts issued several significant rulings. The Constitutional Court upheld the enforceability of post-termination non-competition clauses, confirming their validity under specific conditions. Meanwhile, the Court of Appeal has dismissed request for unused annual leave payment based on excessive days on the basis that it is unreasonable for senior executives to work for long periods without taking holidays.

Looking ahead to 2025, key updates include adjustments to employment related monetary thresholds, with the most significant ones effecting the minimum wage, statutory severance payment ceiling, and employment related administrative fines.

In this publication, we aim to provide a concise overview of recent key legislative changes and court precedents in Turkish employment law from 2024 along with important updates related to 2025, summarised as follows:

UPDATES ON MONETARY THRESHOLDS

Adjustments to minimum wage, severance payment and administrative fines have been announced as follows:

• Statutory severance payment: The ceiling applicable to severance payment, which is a statutory termination compensation to be paid to employees meeting the eligibility criteria, has been increased to TL 46,655.43 (approximately EUR[1] 1,300) gross to be applicable for the period between 1 January 2025 and 30 June 2025.
• Minimum monthly wage: The Ministry of Labour and Social Security of Türkiye has announced the gross minimum monthly wage for 2025 as TL 26,005.50 (approximately EUR 700), which corresponds to net TL 22,104.67 (approximately EUR 600). The wages paid to foreign employees, whose salaries are legally determined (depending on the nature of work performed and the job title) to be between at least the gross minimum monthly wage and five times of this amount will also need to be adjusted accordingly.
• Administrative fines under Labour Law No. 4857: The administrative fines to be imposed in 2025 under the provisions of Labour Law No. 4857 have been increased with a 43.93% revaluation rate in line with 2024 inflation, will range from TL 2,017 (approximately EUR 55) to TL 241,043 (approximately EUR 6,500) depending on the type of the violation. Details regarding the applicable administrative fines can be found in the following link.

LEGISLATIVE UPDATES

Employer contribution rate for short-term insurance increased to 2.25%.

Effective from September 2024, employer contribution rate for short-term insurance premium (covering work accidents, occupational diseases, sickness, and maternity) regulated under Law No. 5510 on Social Insurance and General Health Insurance has been increased from 2% to 2.25%, as published in the Official Gazette dated 2 August 2024 and numbered 32620.

Workplace safety specialist and an occupational physician requirement have been introduced for workplaces employing less than 50 employees.

As of 1 January 2025, companies employing less than 50 employees, which are classified as low-risk workplaces, will employ a workplace safety specialist and an occupational physician or obtain these services from joint health and safety units or occupational health centres. Previously, this obligation only applied to workplaces with more than 50 employees; however, the requirement has now been expanded to cover all workplaces, including those with fewer than 50 employees in the low-risk category.

The evaluation criteria for foreign work permits have been updated.

On 1 October 2024, the Directorate-General of International Labour of the Ministry of Labour and Social Security updated the criteria regarding employment, financial adequacy, salary criteria for foreign employees to the employed in Türkiye.

As a general rule, companies employing foreign personnel are required to employ at least five Turkish citizens for each foreign employee. However, the updated regulations provide an exemption to the companies with a net annual sales of at least TL 50,000,000 (approximately EUR 1,350,000), allowing them to employ up to five foreign employees without the need to meet Turkish employment quota.

Minimum paid-up share capital required to be eligible for making a work permit application for both newly established and existing companies, has been increased from TL 100,000 (approximately EUR 2,700) to TL 500,000 (approximately EUR 13,500). In addition, the existing companies are required to have an annual net sales of TL 8,000,000 (approximately EUR 215,000)in the previous financial year that was increased from TL 800,000, and an export revenue of USD 150,000 (approximately EUR 4,000), which was reduced from USD 250,000 (approximately EUR 6,750) due to increase in FX rates.

Furthermore, the minimum salary requirements for foreign employees, which was previously set at 6.5 times the gross minimum monthly salary determined by the Turkish state on bi-annual basis, have been reduced to 5 times the minimum wage as of 2025.

Update in liability for court expenses in connection with mediation attendance.

Pursuant to the Law No. 7036 on Labour Courts, it was originally stipulated that if a party failed to attend the first mediation meeting without a valid excuse, they would be responsible for all legal costs, even if the lawsuit partially or fully concluded in their favour and no attorney’s fee will be awarded in this regard. However, with the amendment published in the Official Gazette dated 7 November 2024 and numbered 32722, this provision has been amended to provide that a party failing to attend the mediation without a valid excuse will be liable for half of the judicial expenses incurred by the other party, and half of the attorney’s fee as determined in accordance with the Minimum Fee Tariff for Attorneys.

SIGNIFICANT COURT RULINGS

The Constitutional Court ruled that post-termination non-compete clauses are consistent with the Turkish Constitution.

On 4 April 2024, the Constitutional Court ruled that a non-compete provision between an employer and an employee, applicable after the termination of an employment agreement, comply with the Turkish Constitution. The case originated from the Izmir 4^th Civil Commercial Court, which challenged the constitutionality of a provision related to the enforcement of a penalty clause for breaching a non-compete obligation, and sought its annulment. The Constitutional Court rejected the challenge, stating that there is no regulation prohibiting payment to the employee or the employer’s assumption of a similar obligation. It concluded that the non-compete provision neither imposed an excessive burden on the employee nor created an unreasonable and disproportionate obligation for either party. Consequently, the Court held that the rule does not infringe upon the principles of contractual freedom and business freedom. Further details regarding the Constitutional Court’s ruling can be found in the following link.

The Court of Appeal ruled that mediation initiated without an actual dispute cannot be used to validate settlement agreements or termination related payment documents.

In its decision dated 10 October 2024, the 9^th Civil Chamber of the Court of Appeal ruled that any final protocol or settlement document arising from mediation initiated in the absence of a genuine dispute between the parties, such as without an actual termination, cannot be deemed valid. The Court emphasised that the mediation should not be used as a mechanism to terminate employment contracts or to draft post-termination payment protocols of employment contracts. In a case concerning labour claims, the Court noted that employers often initiate mediation processes even in the absence of an actual dispute, resulting in settlement documents. The decision highlighted that the existence of a legal dispute between the parties is a pre-requisite for mediation and in the absence of such a dispute, any final protocol or settlement document produced through voluntary mediation cannot preclude the initiation of legal proceedings. The Court further stated that mediation cannot serve as a tool for terminating employment contracts or settling financial obligations arising from the terminations. In cases where there is no actual termination, the payment of severance and notice payments through a mediator does not alter the nature of it being an advance payment. Similarly, converting annual paid leave entitlements into a monetary compensation via a mediation settlement agreement without termination is also deemed unacceptable. This decision reinforces the requirement for a legitimate legal dispute as the foundation for mediation proceedings.

The Court of Appeal applied a 50% reduction finding the claimed annual leave payment contrary to the ordinary course of life of a senior executive.

With its decision dated 4 June 2024, the 9^th Civil Chamber of the Court of Appeal overturned the first-instance court’s decision determining the unpaid annual vacation of a senior executive by accepting the employee’s claim that he had not used any paid annual leave over a course of nine years. The Appeal Court emphasised that the employee held the position of general manager at the company and had the authority to file his/her own annual leave documentation, and that it was against the ordinary course of life for an employee to work uninterruptedly for nine years without taking annual vacation, and therefore, applied a 50% reduction in the claimed amount.

[1] In this document, the exchange rate of 1 EUR = 37.1 is used, as per the reference rate determined by the Central Bank of the Republic of Türkiye on 31 January 2025.