Guide to Restructuring a Cross-Border Workforce

Yes, there is. An employee is redundant if the following conditions are met:

• the employer adopted a decision on organisational change;
• the change concerns the scope of activities, tasks, technical equipment, number of employees, or otherwise alters the structure of the employer;
• the aim of the change is to increase work efficiency, reduce costs, or otherwise alter the performance of the employer’s enterprise; and
• as a result, the employee’s work is redundant or not needed.

According to case law, the employee’s work is not needed, either at all or at least in part, with the rest being distributed among the current employees or corporate body. Rebranding the position, hiring a new employee to carry out the work of the dismissed employee shortly thereafter, or otherwise fabricating the redundancy with an ulterior motive does not qualify as redundancy.

Czech law provides two other similar reasons based on which an employer is entitled to terminate employment – closing down or relocation of the employer’s undertaking or its part. Together with redundancy, these three reasons are known as “organisational reasons” (in Czech: “organizační důvody”) for termination of employment. However, closing down and relocation of the employer or its part are different reasons than the redundancy itself, and therefore we do not address them further.

Yes, the concept of redundancy is regulated under Article 18 of the Turkish Labour Code No. 4857 (TLC). As per Article 18, in workplaces employing 30 or more workers (international headcount is taken into account when calculating the number of employees), an employer that terminates the indefinite-term employment contract of an employee with at least six months of seniority must rely on a valid reason arising from the employee’s competence or behaviour, or the requirements of the enterprise, workplace, or business (valid reasons). The seniority requirement is not required for workers working in underground works. The above rules are collectively referred to as “job security provisions”.

Accordingly, terminations based on redundancy may be made in the presence of a valid reason (absent the presence of justified grounds), and in writing. The burden of proof lies with the employer in proving that there were, indeed, valid reasons for the redundancy.

The employer must take the following steps:

• review underlying documents (including organisational charts), decide what organisational change needs to be made and work out which positions are no longer needed, and plan the timing;
• adopt a decision on organisational change, including its effective date and which redundant positions are cancelled. The decision doesn’t have to be in writing or state reasons for the redundancy. However, both are highly recommended and a market standard, as this serves as evidence;
• if there are unions, consult the unions in advance (see question 4), and if a union representative is supposed to be made redundant, obtain the union’s consent in advance (see question 11);
• execute dismissal either by a termination agreement (recommended) or a termination notice with the redundant employees. In case of termination notice, the redundancy must (based on the decision) take effect on or before the notice period expired, not after; and
• implement the organisational change (including updating organisational charts).

Organisational changes may also be governed by collective agreements, in which case additional rules may apply (this applies to all the questions below).

The employer may terminate the employment contract based on either: (i) a valid reason; or (ii) a just cause. Redundancies fall under the valid reason category.

If job security provisions apply to the employee in question, as explained in question 1, the employee’s employment contract must be terminated in writing and based on a valid reason.

Accordingly, the employer must clearly inform the employee, in writing, of the valid reason for why their employment is terminated (ie, redundancy, which may be categorised as a decrease in the workforce, operational decisions, or restructuring).

The employer should ideally be in a position to prove that such grounds exist and may choose to attach any probative documents to the written notice it will serve to the impacted employee.

Termination based on redundancy should also be made “as a last resort”. If there are alternative or similar positions that may be offered to the employee, then these should be considered before proceeding with the termination.

The employer must also comply with the notice periods specified in the TLC in cases of termination for valid reason, and is not entitled to immediately terminate the employee’s contract.

Notice periods are determined according to the duration of the employee’s employment under Turkish employment law.

As per the TLC, the notice periods are as follows:

• if the employment has lasted less than six months, the notice period is two weeks;
• if the employment has lasted between six months and one and a half years, the notice period is four weeks;
• if the employment has lasted between one year and three years, the notice period is six weeks; and
• if the employment has lasted more than three years, the notice period is eight weeks.

However, under the TLC, if the employer opts to dismiss the employee before the employee’s notice period expires, the employer will have to pay the corresponding notice pay in lieu of a notice period. The employment commencement date must be taken as a basis when calculating the notice period of the employee. 

Please note that if: (i) the employer terminates the employment contract based on justified grounds regulated under the TLC; (ii) the employment contract is a fixed-term employment contract; or (iii) the employment contract is terminated due to retirement, military service, marriage, or the death of the employee, it is not obligatory to comply with the notice period.

Yes, Czech law provides a special procedure for “collective dismissal” in all three cases of organisational changes (see question 1).

The threshold is:

• ten employees if the employer has 20 to 100 employees;
• 10% of employees if the employer has 101 to 300 employees; and
• 30 employees if the employer has more than 300 employees.

The respective number of employees must be dismissed due to redundancy within a period of 30 days. If at least five employees are dismissed within 30 days by termination notice due to redundancy, then employees dismissed in the same period by termination agreement are included in these thresholds.

In addition to the process above, collective dismissal must be:

• consulted with unions 30 days in advance, or notified to each affected employee if there are no active unions at the employer; and
• notified to the local Labour Office: (i) in advance, including information on commencement of the consultation process with unions; and (ii) on its result once it’s completed, in the form of a written report that must be delivered in copy to unions, which then have the right to comment on it – employment relationships can terminate only after the lapse of 30 days following this.

Pursuant to Article 29 of the TLC, collective redundancies may be made by the employer due to economic, technological, structural, and similar business, workplace, or work-related requirements.

If the following number of employees are dismissed within a period of one month, it shall be considered a “collective redundancy”:

• if the number of employees in the workplace is between 20 and 100, dismissal of at least ten employees;
• if the number of employees is between 101 and 300, dismissal of at least 10% of the employees; and
• if the number of employees is 301 or more, dismissal of at least 30 employees.

In such cases, employers must notify the workplace union representatives, the relevant regional directorate, and the Turkish Employment Agency at least 30 days before the collective redundancy. This notification must include information on the reasons for the redundancy, the number and groups of employees who will be affected, and the timeframe in which the termination of employment will take place. Termination notices shall take effect 30 days after the employer notifies the regional directorate of the collective redundancy request.

Yes, the employer must consult any termination notice in advance. Agreement doesn’t have to be reached (with the exception of employees with enhanced protection; see question 11). In practice, the consultation is more of an announcement.

In case of collective dismissal, consultation must take place, and the employer must try to reach an agreement and inform the Labour Office of the result.

Yes, as explained in detail in question 3, if the thresholds relating to the number of employees in the workplace and the number of impacted workers are reached, then employers must notify this in writing at least 30 days in advance to the workplace union representatives (if any), the relevant regional directorate, and the Turkish Employment Agency.

If the workplace permanently ends its activities, the employer will not have to notify the workplace union representatives. The employer will only be obliged to notify the relevant regional directorate and the Turkish Employment Agency at least 30 days in advance, and announce the situation at the workplace.

Moreover, no agreement needs to be reached with the union representative at the end of the notification. However, after the notification, a meeting must be held between the union representatives and the employer. During the meeting, issues such as preventing collective dismissal, reducing the number of employees to be dismissed, or minimising the negative effects of the redundancy for the employees must be discussed. At the end of these negotiations, a document must be issued to indicate that the meeting has taken place.

It is the employer’s right to make an organisational change and its factual validity cannot be challenged. However, the individual dismissals may be challenged by employees. If successful (ie, the employer doesn’t prove redundancy), the restructure in the individual case may be prevented.

In the case of collective dismissals, it may be delayed by the unions prolonging the consultation. However, even then the unions and the Labour Office can’t prevent the dismissal, and the only way to prevent individual dismissal is a successful individual challenge by the dismissed employee.

If the unions believe that the collective agreement was violated by the redundancy or in the process of its implementation, they may dispute this violation. The dispute may be resolved by a mediator or escalated to an arbitrator. However, this doesn’t prevent the employer from executing the dismissals or restructure (only if violation is later found, it may have certain implications based on the individual collective agreement and nature of its violation).

No, the restructure cannot be delayed, nor prevented. However, as stated in question 17, trade unions are authorised to file a lawsuit on behalf of their members (employees) for their rights arising from their employment contract, the labour relationship, and social security rights.

In case of individual dismissal, the consultation process is, rather, a notification (with the exception of employees with enhanced protection; see question 11) including:

• the identity of the employee;
• termination grounds (redundancy); and
• basic details of the redundancy (why and when).

It should take place prior to the dismissal (no specific deadline is given).

In case of collective dismissal, the consultation process includes:

• measures preventing or limiting the collective dismissal;
• mitigation measures (eg, employing the redundant employee at other workplaces of the employer);
• reasons;
• number and professions of redundant employees;
• number and professions of all the employees;
• the period during which the collective dismissal takes place;
• selection method of redundant employees; and
• severance pay and other rights of the redundant employees.

The consultation process must take place no later than 30 days prior to the collective dismissal. The local Labour Office must be notified as well (see question 3).

The administrative fine for violation of the consultation process with unions is up to 200,000 koruna. Employees who suffer damage as a result may claim compensation.

As stated in question 4, after the employer notifies the union representatives about the collective redundancy, a meeting shall be held between the union representatives and the employer. During the meeting, the issues of preventing collective dismissal, reducing the number of employees to be dismissed, or minimising the negative effects of the redundancy for the employees shall be discussed. At the end of the negotiations, a document shall be issued to indicate that the meeting has taken place.

An administrative fine of 3,475 liras is imposed on employers who violate the collective redundancy provisions regulated under the TLC.

Yes, an economic business rationale should be the reason for organisational change, and therefore the redundancy, and as such should be part of the consultation.

In the event of collective redundancy, pursuant to Article 29 of the TLC, the employer is required to indicate the reasons for the dismissal in the notification to the workplace union representatives, but the workplace union representatives will not be able to prevent this without filing a lawsuit. However, as stated in detail in question 17, unions will be able to file a lawsuit on behalf of their members, at their own discretion.

In case of collective dismissals, if there are no unions or employee representatives, the employer must inform and directly consult the affected employees to the same extent.

In case of individual dismissal, it is not a requirement, nor best practice, and highly depends on the strategy in the individual case.

There is no such requirement. That said, if it is deemed to be strategically favourable, employers may choose to do so before proceeding with the termination, with a view to perhaps conclude a “mutual termination agreement”[1] to reduce the risk of litigation (reinstatement and employment receivables).

[1] Please see question 19 for further information.

The only rule is that the employee’s position or work must be genuinely redundant (see question 1). If more than one employee fulfils this condition, it is up to the employer which employee to select. However, this choice must not indicate that there are in fact different motives for the redundancy of the selected employee (eg, disputes with the employer, unsatisfactory performance, or gender or other discriminatory motives).

The TLC embodies the principle of equal treatment and obliges employers to treat their employees in an equal manner. Accordingly, no discrimination based on language, race, colour, gender, disability, political opinion, philosophical belief, religion, sect, and similar reasons may be made in relation to the employment relationship.

That said, the Court of Appeals has ruled that certain social selection criteria and objective criteria should be taken into account in the termination of employment contracts. Social selection is the employer’s obligation to select the employees to be dismissed through certain criteria to protect the socially disadvantaged in terminations arising from business necessities. Court precedents exemplify the criteria for social selection as follows: “productivity, absenteeism due to illness, lack of diligence in fulfilling the obligation to perform work, seniority, entitlement to retirement, being married and having children or being young”. Accordingly, it is deemed acceptable by the courts to select employees who will stay in the team, according to objective criteria such as capabilities and performance, as long as the employer ensures that employees in similar circumstances are not discriminated against and as long as objective criteria such as the ones listed above are used in making the selection. Additionally, the employer should be in a position to document that the above-mentioned process is observed, for probative purposes in possible subsequent litigation. Case law requires substantial documentation for this purpose.

Yes, a termination notice due to redundancy is not allowed during the period for which an employee is:

• declared temporarily medically unfit for work or in institutional treatment (unless the employee has intentionally caused this unfitness, or it is a direct consequence of the employee’s alcohol intoxication or substance abuse);
• deployed in military exercises or military service;
• on long-term full leave to act in public office;
• pregnant, or on maternity leave, paternity leave, or parental leave;
• declared temporarily unfit for night work if they perform night work; or
• on leave caring for a child under 10 years of age, treating a child under 10 years of age or other natural persons, or providing long-term care, all as specified in the Czech Sickness Insurance Act.

Even though no strict prohibition to this extent is regulated under the TLC, as per the Law No. 6356 on Trade Unions and Collective Bargaining Agreements (Law No. 6356), workplace union representatives benefit from an additional layer of protection. This protection stems from the fact that the employer cannot terminate the employment contracts of workplace union representatives unless there is a just cause, and the employer clearly and precisely states the reason in writing.

Yes, members of a trade union body during their term of office and for a period of one year after the end of their term of office. The employer must have prior consent of the unions for termination of their employment relationship by a notice. Consent is deemed to be given if the unions don’t respond within 15 days. Consent is valid for two months. Termination notice without such consent is invalid unless the court decides in the validity case that the employer could not have been justifiably required to keep the employee.

As stated in question 10, as per Law No. 6356, workplace union representatives benefit from an additional layer of protection.

The Court of Appeals has stated that when a notice of termination is given to an employee who is on leave, the termination shall be regarded as invalid. The employee must be notified of the termination of their employment contract before they go on leave, or after they return from leave.

A redundant employee is entitled to a statutory severance payment, regardless of whether the employment termination is made by notice or agreement and if the redundancy is explicitly stated as the reason for the termination.

The severance payment is due on the next scheduled pay date following the termination of employment. A later due date can be agreed.

In cases of termination for valid reason, the employer must pay severance pay and notice pay (if notice periods are not observed) in addition to the employee’s unpaid wages, overtime,[1] and annual leave-related payments. These payments should be made on the date of the termination of the agreement, and if they are delayed, interest will accrue on these amounts.

Additionally, in the event that the employee files a lawsuit due to the termination of their employment contract, and if the court concludes that the employer was not able to demonstrate a valid reason, and decides that the termination is invalid, the employer is obliged to reinstate the employee within one month. If the employer does not reinstate the employee within one month upon the employee’s application, the employer must pay additional compensation and payment for the idle time (up to four months’ salary).

[1] Under Turkish employment law, overtime work occurs: (i) in cases where the employee works more than 45 hours per week in the absence of an agreement between the employee and the employer regarding working hours; (ii) in cases where the employee and the employer have agreed that the weekly working hours shall be less than 45 hours, and the employee works more than 45 hours per week; or (iii) in cases where the daily working hours exceed 11 hours, regardless of whether the weekly working hours exceed 45 hours.

The severance payment amount differs based on the length of the employment as follows:

• one gross average monthly salary of the employee if the employment lasted less than one year;
• two gross average monthly salaries of the employee if the employment lasted at least one year but less than two years; and
• three gross average monthly salaries of the employee if the employment lasted at least two years.

If the working hours account applies (specific working hours distribution scheme under the Czech Labour Code) the statutory severance is the relevant amount above plus three gross average monthly salaries of the employee.

The severance payment may also be higher if stated so by:

• agreement between the parties;
• the employer’s internal regulations; or
• a collective bargaining agreement.

A gross average monthly salary of the employee must be calculated for each employee separately using the specific rules of the Labour Code.

Statutory severance payment is a type of compensation that employees who have worked in the same workplace for at least one year are entitled to receive in return for their labour. The continuous or intermittent work performed by the employee in the same or different workplaces of the same employer is calculated together, while determining the minimum working period of one year. Situations such as the transfer of the workplace to another employer, merger of workplaces, or confiscation by the state do not affect the severance of the employee. The calculation of one year is based on the date the employee actually starts to work, not the date of the employment contract.

Statutory severance pay equals 30 days of gross wages for each year of employment. The 30-day wage consists of the normal wage and other benefits received by the employee.

Accordingly, to calculate severance payment, the number of years worked is multiplied by the last gross wage. Fractions of years are also taken into account in the multiplication process. In other words, the months remaining from a full year are converted into days, and the last gross wage is divided by 365 to find the daily wage, and this daily wage is multiplied by the excess working duration converted into days. All calculated figures are then added together. Accordingly, the calculation formula is as follows:  

([Years of Employment] x [Last Gross Wage]) + ([Number of Days in Excess of One-Year Period] x [Gross Wage Amount Corresponding to One Day]) = Severance Pay Amount

Please note that there is a severance pay ceiling of 23,489.83 lira for the second half of 2023.

If the 30 days of gross wages of the employee exceeds this ceiling, then the ceiling amount should be considered when calculating the severance pay.

Not in cases of individual dismissals.

In cases of collective dismissals, the employer must notify the relevant branch of the Labour Office:

• of the intention to carry out collective dismissal;
• that the consultation process has been initiated with the unions or the employees; and
• of the specific aspects of the collective dismissal, to the same extent as the unions (see question 6).

Following the consultation, the employer must deliver a written report to the Labour Office stating:

• that the employer has decided on collective redundancies;
• the outcome of the consultation process;
• the number and occupational composition of all employees; and
• the number and occupational composition of the employees to be made redundant.

A copy of the report must be delivered to the unions, which then have the right to comment on it.

No, employers do not need to notify any authority before making redundancies. However, pursuant to Law No. 5510 on Social Security and General Health Insurance, in the event of termination of the employment contract of the insured employee, the termination of the employment contract shall be notified to the Social Security Institution within ten days starting from the day following the date of termination, with the code prescribed for the termination reason. For example, “termination of an indefinite-term employment contract by the employer without just cause” has the code number 4.

No, generally there is no such obligation. If the conditions for dismissal due to redundancy are met, the employer is not obliged to offer the employee an alternative solution.

However, in some specific individual cases, the courts have concluded that if the employer still needs the work on part-time basis, the employer should first offer the employee this part-time job.

Under Turkish law, redundancies or terminations should be the last resort. This means that the employer should initially offer the employee an alternative position (even if this is a lower or less senior position) and wait for the employee to decline before proceeding with the termination. So yes, employers are obliged to consider alternatives to redundancy.

There are no specific notification obligations after making the redundancies. Only general notification obligations, which are the same for all employment terminations, apply.

These general notifications must be made within eight days, using the relevant forms, to: (i) the employee’s health insurance company; and (ii) the District Social Security Administration (including the pension insurance record sheet).

If wage deductions were made to satisfy the employee’s debt to a third party, the employer must notify the relevant court (or tax authority case of tax debt), including an account of the deductions.

Yes, the Social Security Institution needs to be notified. Please see question 14 for further information.

An employee may challenge the validity of a dismissal for redundancy if they consider that the statutory conditions were not met. First, the employee who wishes to remain employed must inform the employer without undue delay after the termination notice that they insist on continuing their employment. Second, the employee must file a lawsuit at the district court of the employer’s seat (residence or registered address). The lawsuit must be made within two months from the date on which the employment should have ended. After the two months, the right to file the lawsuit expires.

If the dismissal for redundancy is found invalid, the employee who wishes to remain employed remains to be employed at the original position under the original conditions and is entitled to a full compensation of salary for the whole time from the invalid termination until work is assigned again, or until the employment is validly terminated (ie, including the time of the court proceedings). The court may reduce the amount of such compensation if, for example, the employee has found another job in the interim, or could have found one.

There’s no statutory authorisation for unions to raise any claims at the court on behalf of employees except for insolvency proceedings (see question 21). However, only attorneys at law can represent employees fully and without limits in any proceedings. Another natural person can be granted a power of attorney in a specific case (not repeatedly). Theoretically, this could be a member or employee of the unions, but this is not a market standard.

Firstly, if the employee is not satisfied with the employer’s decision, they must go to a mediator before filing a lawsuit. If they file a lawsuit without going to a mediator, the lawsuit will be rejected procedurally. If the employee and the employer cannot reach an agreement through the mediator, the employee may file a lawsuit. In the lawsuit, the employee may demand reinstatement and employment receivables (eg, severance pay, notice pay, holiday pay, and overtime pay).

Law No. 6356 regulates the right of existing trade unions to file “individual lawsuits” on behalf of their members. Pursuant to Law No. 6356, trade unions are authorised, upon their written application, to file a lawsuit on behalf of their members for their rights arising from the employment contract and labour relationship, and social security rights. In other words, trade unions can claim all kinds of rights arising from the employment contract, just like the employees themselves.

Yes, it is very common and highly recommended to terminate the employment by mutual agreement when making employees redundant. The termination agreement does not have to state any reasons for termination. However, should the reason be redundancy of the employee, the employee is entitled to statutory severance payment regardless. To motivate the employees to conclude the termination agreement, it is a market standard to offer a higher severance package than the statutory severance payment.

Yes. In Türkiye, it is relatively common, especially for employers, to use settlement agreements, also known as “mutual termination agreements” or “severance agreements” to alleviate the risk of facing litigation. These agreements can be a practical way to handle the termination process, especially in cases where both parties agree to the terms and conditions of the separation.

Such mutual settlement agreements are not listed among the types of termination regulated under the TLC. Rather, the legal basis for such settlement agreements is based on Article 26 of the Turkish Code of Obligations, titled “Freedom of Contract”.

Settlement agreements are typically voluntary arrangements. Both the employer and the employee must agree to the terms of the agreement voluntarily and without coercion. According to the case law of the Court of Cassation of Türkiye, in order for the termination agreement to be valid, the reasonable benefit of the employee must be met and the employee must sign the agreement by their free will, without being under any pressure. Settlement agreements can include various terms and conditions, such as severance pay, notice periods, the return of company property, confidentiality clauses, non-disparagement clauses, and non-compete clauses. The specific terms will depend on the negotiations between the parties.

The TLC provides for severance pay to employees in case of redundancy or termination without just cause. The amount of severance pay is typically outlined in the law based on the employee’s length of service, and this may be negotiated in the settlement agreement.

Settlement agreements are usually documented in writing and signed by both parties. It is essential to keep a clear record of the agreement to avoid disputes in the future. Once a settlement agreement is signed and executed, it often signifies the final resolution of the employment relationship. The employee typically agrees not to pursue further legal action related to their termination.

While settlement agreements are common, it’s crucial to ensure that they are drafted in compliance with TLC and that the terms are fair and equitable. Additionally, it’s important to note that in some cases, Turkish labour courts may scrutinise the terms of settlement agreements to ensure that they do not violate the rights of employees or attempt to circumvent legal requirements. Therefore, both employers and employees should exercise caution when considering or drafting settlement agreements in redundancy situations.

Individual redundancies generally take around two to three months. The organisational change must be prepared, and the termination agreement negotiated or the termination notice given. In case of the notice, the statutory notice period is two months. There’s no statutory notice period requirement in case of agreement, therefore it can be faster. It can also take longer (eg, more complicated cases, restructuring, C-level or other higher managers).

For collective redundancies, the process takes several months (at least three) due to higher demands on preparation, more complicated structuring, the consultation process, and the notification obligation to the Labour Office.

For individual redundancies, as per Article 17, employment contracts will be deemed to be terminated within the following periods:

• for an employee whose employment has lasted less than six months, two weeks after the notification is given to the other party;
• for a worker whose employment has lasted from six months to one and a half years, four weeks after the notice is given to the other party;
• for a worker whose employment has lasted from one and a half to three years, six weeks after the notice is given to the other party; and
• for an employee whose employment has lasted for more than three years, eight weeks after the notice is given.

Please note that these periods are minimum and can be increased by contracts. Subsequently, a notification may be made on the day the notice period expires.

When the employer wants to lay off workers collectively as a result of economic, technological, structural, and similar business, workplace, or work requirements, it is obligatory to notify the workplace union representatives, the relevant regional directorate, and the Turkish Labour Institution with a letter at least 30 days in advance.

This notification must include information on the reasons for the layoff, the number and groups of workers who will be affected, and the time period in which the layoff will take place. If there is a trade union, it is necessary to first meet with the trade union representatives, hold an information and consultation meeting, and issue a document showing that these meetings have been held.

The termination notifications to be made after these notifications and meetings shall become effective 30 days after the employer notifies the regional directorate of the collective dismissal request. Accordingly, the notification periods stipulated in Article 17 of the Labour Law will start to run 30 days after the notification to the Regional Directorate.

For mutual terminations, in practice, employers prepare a mutual settlement agreement (MSA) (to be signed by employer and the employee) to be presented to the employee along with an MSA offer letter. The employee will need to be provided with adequate time to evaluate and consider the offer. In practice, this period is usually a whole week.

If the employee accepts the offer letter, upon acceptance, all relevant payments should be made on the date of termination indicated in the MSA, and the Social Security Institution must be notified about such termination on the same date.

The statutory law does not expressly prohibit certain conduct. However, a redundancy means that the employee’s work is no longer needed and therefore any hiring (internal or external) for the same (or largely the same) position should be avoided (or at least thoroughly considered), especially for the two-month period during which the employee can challenge the validity of the dismissal.

Yes. Such a limitation exists for collective redundancies. If the employer needs to hire a worker with the same qualifications within six months after the finalisation of the collective dismissal, the employer must call upon the dismissed workers. In this case, since the burden of proof is on the employer to prove that such workers have been called to work, the call must be made in writing and documented.

On the other hand, for individual redundancies, there is no specific rule in this regard; yet, it can be argued before the court in case of a dispute. As per court precedents, in cases where an employee is made redundant as per an operational decision or a decision stemming from the business, workplace, or work requirements, but subsequently another employee is hired for the same position, this would entitle the first employee to file a lawsuit for reinstatement. That said, the TLC does not include an express provision in this regard.

The term “restructuring” in Czech law means one of the ways of resolving a company’s bankruptcy in insolvency proceedings. During this process, organisational changes including redundancies may occur. This kind of restructuring does not require unions’ consent; however, consultation may be required. Further, unions may represent the employees in insolvency proceedings.

In Czech law, “restructuring” within the meaning of a business transaction or corporate transformation or changes (i.e. not a type of insolvency proceeding) can also lead to transfer of rights and obligations from the employment relationship to another employer (transfer of undertakings), ie, the employee and their employment will be transferred to a new employer as a result of such transaction. In this case, the employer must inform the unions or other representatives (and if there are none, then the individual employees) and consult at least 30 days in advance:

• the effective date of the transfer;
• reasons for the transfer;
• legal, economic, and social consequences of the transfer for the employees; and
• measures to be taken in relation to the employees.

In case of cross-border mergers or spin-offs, the employer also must: (i) inform the employees or unions of their right to get acquainted with the written merger or spin-off project and give written comments on it; and (ii) generally reach agreement with unions regarding the extent and manner of the right of influence of the employees of the successor corporation (for example, in certain cases by electing a certain number of members of supervisory board in a joint stock company) if the seat of the newly formed entity is supposed to be in the Czechia. Further corporate obligations depend on the form of such restructuring.

However, the described labour law obligations don’t apply in the case of mere ownership change of the employer’s company where this has no direct legal implications for the employees (ie, it isn’t a transfer of undertaking or a termination reason).

Yes.

In the TLC, substantial change in working conditions is regulated under Article 22, entitled “Change in Working Conditions and Termination of the Employment Contract”.

Pursuant to Article 22:

• the employer may only make substantial changes in the employment conditions of the employee (eg, location changes, salary, bonus, working hours, duties, social rights) by notifying the employee in writing; and
• changes that are not accepted in writing by the employee within six business days will not bind the employee.

Therefore, the written consent of the employee should be procured. Otherwise, employees may claim that the changes will not bind them or even terminate their contract for cause.

The offer made by the employer to the employee in the above sense must be clear and specific. If it is not clear and unambiguous, it cannot be said that there is a valid change proposal, and consequently, the offer in question will not bind the employee. The parties may change the working conditions any time by mutual agreement. Changes in working conditions cannot be put into effect retroactively.

In general, employees have limited ability to influence the process of business transactions. The consultation process (see question 21) doesn’t have to result in an agreement with or of the unions. The administrative fine for violation of the consultation process is up to 200,000 Czech Koruna. If there are no unions and the employer breaches its information obligation towards the individual employees (see question 21), the law provides no administrative penalty. In each case, the employee could claim compensation for damage if any damage occurred.

If the employee does not accept the proposed change within six business days, they will be entitled to continue to work under the old working conditions and the employment contract will continue under the same conditions.

In such a case, the employer can only dismiss the employee by paying severance pay if a “valid reason” exists. Such an employee, if they are covered by job security provisions, may also go through mediation and litigation for reinstatement. In this case, it will be examined whether this offer of change in working conditions is based on an objective reason and whether it was necessary.

If the employer makes a unilateral change despite the employee’s refusal, this change will not be binding on the employee and the employee can make a termination with just cause.

If the statutory conditions for transfer are met, the transfer occurs automatically, ie, neither the original employer, the new employer, the employees, nor the unions can avoid the transfer. An employee may prevent their own transfer only by serving termination notice to the employer before the transfer’s effective date, in which case the employment terminates on the day immediately preceding the transfer’s effective date at the latest. If the employer didn’t inform employee at least 30 days in advance (see question 21), the employee may serve their termination notice within two months after the transfer’s effective date – in which case, only a 15-day notice period applies.

Individual rights and obligations are transferred in full to the new employer. The rights and obligations under the original employer’s collective agreement are also transferred to the new employer, but only for the duration of the collective agreement, and for no longer than to the end of the following calendar year.

Transfer itself is not a statutory reason for terminating the employment. However, a restructuring (organisation change) leading to redundancy may happen before, during, or following the transfer. In such a case, the employee has the same rights as in the case of other redundancies.

If the employee terminates the employment by a notice or by an agreement within two months of the effective date of the transfer, they may raise a claim at court that the reason for termination was a substantial deterioration in working conditions caused by the transfer. If the court confirms it, the employee will be entitled to statutory severance (see question 13).

Yes. As per Article 6 of the TLC, transfer of the workplace can in no way be interpreted or accepted as a termination of the employment contract of the existing employees. There is an absolute prohibition of termination in this regard. In the event of a workplace transfer, the first thing to be known is that the employment contracts of the existing employees will continue in the same way. In other words, employment contracts of the employees will remain the same, and the previously established employment relationship continues to exist in the same way. Only the party to employment relationship will change in such circumstances. The party to the existing employment relationship is no longer the employer who transferred the workplace, but the transferee employer. The seniority, rights, and entitlements of employees will not be affected by the transfer.

The transferor employer is not immediately relieved from liability after the transfer of the workplace. The fact that the employment contracts will be transferred to the new employer with all its rights and obligations should not be interpreted as the transferor employer is relieved of all liability. The transferor employer is jointly liable with the transferee employer for the debts that arose before the transfer and that must be paid on the date of transfer.

In other words, workers who have receivables can apply to both employers. The liability of the transferor employer is limited to two years from the date of transfer in terms of receivables other than severance pay.

Provisions on joint liability shall not apply in the event of termination of a legal entity through a merger or change of its type.

On a final note, the provisions of Article 6 of the TLC do not apply to liquidation of assets due to bankruptcy.

Since the transfer of rights and obligations under employment law occurs automatically, it is generally sufficient to follow the legally prescribed procedure for a given business transfer. In addition, it is necessary to comply with the information and consultation obligation (see question 21). Further, general reporting and notification obligations to the state authorities apply.

Under the TLC, the procedure for a transfer of employment, whether it’s due to a business transfer or within group companies, is outlined to protect the rights of employees involved, a general overview of which is as follows:

1. Notification and consultation: employers planning a transfer of employment must inform and consult with the employee representatives or unions, if any, regarding the reasons for the transfer and its potential impact on employees.

2. Employee consent: individual employees affected by the transfer must give their written consent. This consent must be obtained voluntarily, without coercion, and with a clear explanation of the transfer’s implications.

3. Transfer agreement: employers involved in the transfer should draft a transfer agreement specifying the terms and conditions of the transfer, including employment rights and obligations, and any changes in employment contracts, job roles, or working conditions. This agreement should be signed by both the old and new employers, and the affected employees.

4. Preservation of rights: employees’ existing rights, including seniority, benefits, and employment terms, must be preserved during and after the transfer. Their working conditions should not be worsened as a result of the transfer.

5. Information to employees: employers should provide employees with comprehensive information about the transfer, its implications, and any potential changes to their employment terms, such as location, job role, or working hours.

6. Continuity of employment: the employment relationship must be maintained without any interruption during the transfer. Employees should continue their work with the new employer under the terms and conditions agreed upon in the transfer agreement.

It is essential for employers to adhere to these procedures meticulously to avoid legal complications, safeguard the rights of employees, and ensure a smooth transition during employment transfers under the TLC.

The working conditions of the transferred employees cannot substantially worsen. If this were to happen and the employee gave termination notice within two months of the transfer, the employee could claim statutory severance (see question 23).

In addition, the employer must comply with the general principle of equal treatment and ensure equal treatment of both the original and new employees in terms of their working conditions, remuneration, and other benefits, training, and the possibility of promotion.

Yes.

When employees are transferred due to a business transfer, merger, or similar circumstances, the law states that the terms of employment for transferring employees should be harmonised with those of existing employees. The key principle is the principle of equality to ensure that transferring employees are not placed in a less favourable position compared to existing employees in terms of their employment conditions.

• Equal treatment principle: as per Article 5 of the TLC, employees in similar positions should be treated equally in terms of working conditions, including wages, benefits, and other employment terms. This principle extends to transferred employees. In the event of a breach of this obligation, the employee may claim the rights and entitlements they were deprived of, in addition to an equitable compensation of up to four months’ wages. The employee has the burden of proving that the employer has violated the principle of equal treatment. However, if the employee establishes a probative ground that strongly suggests the existence of a breach, the employer bears the burden of proving that such a breach does not exist.
• Non-discrimination: employers should avoid any form of discrimination when harmonising employment terms.

In summary, the TLC mandates that transferred employees must not be placed in a less favourable position compared to existing employees in terms of their employment conditions. These rules are in place to protect the rights of transferring employees and ensure fairness in employment transitions.

If the hours, pay, or benefits are agreed in the employment or other contract, then no unilateral change can be made.

Working hours – either statutory weekly working hours apply (40 hours per week) or shorter working hours are agreed. In either case, the employer determines the distribution unilaterally (subject to complying with statutory rules and limits) unless agreed differently.

Salary – if it isn’t agreed in the employment or other contract, the employer unilaterally determines the salary by an internal regulation or by a salary statement.

Benefits – if they aren’t agreed in the employment or other contract, the employer unilaterally determines the benefits by an internal regulation or by a salary statement.

Under the TLC, employers can reduce the hours, pay, or benefits of an employee, but such changes must be made in accordance with specific legal requirements and subject to certain limitations.

• Reducing the pay: it is not possible for the employer to unilaterally reduce an employee’s wage that has been agreed upon by the individual employment contract or collective bargaining agreement. According to the TLC and the decisions of the Court of Cassation of Türkiye, since the reduction of an employee’s wages is a substantial change[1] in the employment conditions of the employee, it is obligatory to obtain the written consent of the employee to make this change. The employee is not obliged to accept the wage change, which is an essential element of the employment contract.
  • The employer is obliged to pay the wages in full to the employee who does not accept the proposed wage change. In case of underpayment of wages, the employee will have the right to file a lawsuit for the underpaid wages. In addition, the underpaid employee may be entitled to severance pay by terminating the employment contract for just cause.
  • If the employee does not accept the proposed wage change, the employer cannot dismiss the employee without compensation on this ground alone.
• Reducing the hours or benefits: whether the change in working hours constitutes a fundamental change or not is a situation that can be determined according to its effects. In this regard, if the change is not clearly in favour of the employee (such as a salary increase) and has the nature of a substantial change, it is always subject to the substantial change procedure envisaged under Article 22 and therefore will be subject to the employee’s consent.

As for employment terms and conditions in general, if these have been agreed in the employment or other contract, they can be changed only by agreement. Validity of express contractual provision to vary the conditions depends on its structure and which conditions it concerns, and therefore there’s no generally applicable answer to the question.

The Labour Code further allows, in certain cases, a change in type of work, workplace, or employer by a temporary transfer of an employee to a different work position, workplace, or employer. Generally, consent is required; however, in certain cases, the employer can (and in very specific cases, has to) make a temporary transfer unilaterally (for example, if the employee is medically unfit to perform the agreed type of work, or to avert imminent danger). The employer must adhere to strict statutory conditions.

Even in the case where there is a contractual provision allowing changes in the employment term of the employee, if the change constitutes a substantial change in the working conditions set forth under Article 22 of the TLC, the provision will not be deemed valid, and the employee will not be bound by such change.

Yes, the employee and the employer may agree on certain changes and variations implicitly. However, it is recommended to avoid such situations.

Yes. This is possible if a workplace practice exists.

A workplace practice is the unilateral and continuous provision of a benefit by the employer, on its own volition, to the employee, without any relevant legal or contractual obligation relating to the said benefit at the outset.

For the benefit to become a workplace practice, the employer’s will to continue this practice is not required. If there is a justified expectation among the employees that this practice will continue, and if the employees accept this practice, even implicitly, it becomes a workplace practice and a provision of the employment contract. As a result of becoming a provision of the employment contract, the workplace practice becomes binding, becomes one of the employer’s obligations arising from the employment relationship, and is subject to the same sanctions.

Examples of workplace practices include bonuses, food and fuel allowances, and payments made when a worker gets married or has a child.

The requirements for an employer’s practices to be typically determined as workplace practices are as follows:

• Generality: it is necessary to provide this benefit to all workers at the workplace or to a certain group of workers. The provision of various benefits to only one worker may constitute a business arrangement with that worker. However, this practice does not qualify as a workplace practice because it is not generalised.
• Consistency: the practice must be continuous; it must be repeated for a certain period. Doctrine and court decisions accept that a workplace practice occurs if the benefit is conferred more than three times (such as a bonus payment that recurs every year).
• Customary behaviour: practices that become customary within the workplace are considered workplace practices. For example, if the employer has a customary practice of conducting performance evaluations annually or providing certain benefits to employees after a specific period of employment, these would be considered workplace practices.
• Providing under the same conditions: it is also important for workplace practice that the performance is provided under the same conditions.
• Compliance with legal requirements: workplace practices should also comply with Turkish labour laws and regulations. Practices that violate legal requirements may not be recognised or enforced as legitimate workplace practices.
• Written policies and procedures: employers often formalise workplace practices through written policies and procedures. These documents outline the rules and expectations governing various aspects of employment, such as working hours, leave policies, disciplinary procedures, and health and safety guidelines.
• Collective agreements: workplace practices may also be influenced by collective agreements between employers and employee representatives or unions. These agreements can specify certain practices, benefits, and obligations to be followed within the workplace.
• Consent and communication: employees’ consent and understanding of workplace practices can also play a role. When employees are informed about and agree to certain practices or policies, they are more likely to be considered part of the workplace culture.

It’s important to note that workplace practices can vary from one employer to another and can evolve over time. Employees often have a reasonable expectation that established practices within the workplace will be consistently followed. Any deviation from these practices may require proper communication and, in some cases, consent from the employees affected.

In cases of disputes or legal issues related to workplace practices, Turkish labour courts may consider customary practices, written policies, collective agreements, and compliance with legal requirements when determining the validity and applicability of these practices.

If agreement is required to vary an employment term or condition, then the only option to vary it is an agreement.

Varying employment terms will most likely constitute a substantial change in working conditions. Accordingly, the procedure envisaged for such changes, as described in question 26, will be applicable.

If varied unilaterally in a case where agreement was required, the employee may challenge the variation (depending on the situation, by demanding the employer to: refrain from such conduct, restore the original terms, or compensate the employee for the damage caused by such conduct). Depending on the situation there could also be a risk of administrative penalties.

As explained above in detail, in the event that an employer changes an employment term without getting the consent of employees, or despite the refusal of the employees, the relevant changes will not bind the employee and will give them the right to terminate their employment contract on valid grounds.

The Czech parliament is currently debating several changes in the area of labour law. However, none of the currently debated changes should affect the answers above.

Severance pay has started to become a significant burden for SMEs due to increasing years of service, wages, and collective agreements, and may even cause bankruptcy. To prevent this, the “Severance Pay Fund” has come to be discussed by lawmakers with the aim of securing the ability of workers to receive severance pay, and of preventing employers from making sudden and large severance payments, thereby protecting their financial stability. According to this system, employers periodically make payments for severance. This way, the severance pay that the employee is entitled to is also secured during the term of the employment, and employers spread large payments for severance pay over a period instead of making it all at once when the contract is terminated.

In the Severance Pay Fund system, state support is provided for the amounts accumulated in the fund, and the funds are also operated in the bank. If this system is adopted, the obligation to work for a certain period for the employee to be entitled to severance pay will be abolished, and even if the insured works for one day, they will be entitled to severance pay. At the same time, employees will be able to see the amounts allocated to them in severance pay funds during their employment. The Severance Pay Fund system had the target of entering into force on 1 January 2022, but although this issue is on the agenda today, no legal regulation has been issued yet.