Rivermate | Turkey flag

Turkey

Dispute Resolution and Legal Compliance

Understand dispute resolution mechanisms and legal compliance in Turkey

Labor courts and arbitration panels

Labor courts in Turkey are divided into three main categories: Individual Labor Courts, Labor Chambers of the Court of Appeals, and Labor Chambers of the Supreme Court of Appeals. These courts are responsible for resolving disputes arising from employment contracts, collective labor agreements, workplace health and safety regulations, and social security law.

The process of resolving disputes in these courts involves filing a lawsuit, optional conciliation, a hearing, a decision, and an appeal process. Typical cases handled by these courts include unfair dismissal, wage and salary claims, discrimination and harassment claims, disputes over working hours and overtime, and workplace accident compensation.

Arbitration in Turkey offers an alternative to litigation in resolving labor disputes. It is a voluntary process where parties agree to submit their dispute to a neutral arbitrator for a binding decision. Arbitration can be used in certain types of labor disputes, particularly those arising from collective labor agreements.

The arbitration process involves an arbitration agreement, selection of an arbitrator, an arbitration hearing, and an arbitration award. The arbitration hearing is similar to a court hearing, but generally less formal, and the arbitrator's decision is binding.

Compliance audits and inspections

Compliance audits and inspections in Turkey are crucial processes that ensure businesses adhere to various laws and regulations relevant to their industry and operations.

Types of Inspections and Audits

There are several types of inspections and audits:

  • Labor Audits and Inspections: Conducted by the Ministry of Labor and Social Security to ensure compliance with labor laws, social security laws, and occupational health and safety regulations.
  • Tax Audits and Inspections: Conducted by the Ministry of Finance to verify compliance with tax laws and identify potential tax evasion.
  • Environmental Audits and Inspections: Conducted by the Ministry of Environment, Urbanisation, and Climate Change to ensure adherence to environmental laws and regulations.
  • Industry-Specific Audits and Inspections: Depending on the industry, other governmental agencies may conduct specialized audits and inspections.

Who Conducts Audits and Inspections

Audits and inspections are conducted by:

  • Government Inspectors: Authorized inspectors from relevant ministries have the power to conduct audits and inspections within their jurisdiction.
  • Independent Auditors: Businesses may hire independent auditing firms for internal compliance assessments or to prepare for potential government inspections.

Frequency

The frequency of compliance audits and inspections in Turkey varies depending on the industry and risk profile, company size, and past compliance history.

General Procedures

The general procedures for audits and inspections include:

  • Notification: Businesses typically receive prior notice before an inspection.
  • Document Review: Inspectors request relevant documents, records, and reports.
  • On-site Inspection: This may involve interviews with employees, physical inspection of premises, and observation of processes.
  • Report: Inspectors generate a report outlining findings of compliance status and any non-compliance issues.
  • Corrective Action: Businesses are often given time to rectify non-compliance issues.

Consequences of Non-Compliance

Non-compliance can lead to significant consequences in Turkey, including administrative fines, operational restrictions, criminal liability, and reputational damage.

Importance of Compliance Audits and Inspections

Compliance audits and inspections are important for ensuring legal compliance, minimizing risk, promoting ethical and sustainable practices, and maintaining reputation. Businesses operating in Turkey are strongly advised to prioritize compliance through regular internal audits, proactive engagement with regulatory authorities, and the implementation of robust compliance programs.

Reporting and whistleblower protections

In Turkey, there are several mechanisms for reporting violations of law or corporate policy.

Internal Reporting Channels

Employees can report concerns directly to their immediate supervisors or managers. Many organizations also establish anonymous hotlines or online reporting systems for ethical violations and misconduct. Larger companies might have a designated officer to handle compliance issues.

External Reporting Channels

Specific government agencies handle reports relevant to their areas of jurisdiction. For example, the Ministry of Labor and Social Security handles labor law violations, the Ministry of Finance handles tax-related violations, and the Ministry of Environment, Urbanisation, and Climate Change handles environmental violations. Some institutions serve as independent mediators to investigate public complaints or institutional misconduct. Reporting criminal activity to law enforcement agencies is also an option. Some NGOs focus on transparency and anti-corruption, providing reporting channels.

Whistleblower Protections in Turkey

Despite a growing recognition of the importance of whistleblowing, Turkey lacks a comprehensive law specifically designed for whistleblower protection. Protections primarily stem from the Turkish Constitution, which provides fundamental rights like freedom of expression and the right to petition, supporting the act of reporting violations. Labor Law No. 4857 prohibits employers from terminating employment contracts based on discriminatory or retaliatory reasons, offering some protection against retaliation for whistleblowing. The Turkish Criminal Code provides penalties for crimes such as insult, slander, and threats, which could offer limited protection for whistleblowers if they face such actions due to their reporting.

However, the existing legal protections for whistleblowers in Turkey are often considered inadequate and lack clarity. A fear of retaliation or social stigma can discourage employees from reporting wrongdoing. Companies can bridge the gap by establishing robust internal whistleblowing policies that guarantee confidentiality, anonymity, and protection against retaliation. Efforts are underway to draft a dedicated whistleblower protection law in Turkey, so it is important to stay updated on potential legislative developments.

International labor standards compliance

Turkey is a signatory to several significant international labor conventions established by the International Labor Organization (ILO). Compliance with these conventions is a crucial aspect of Turkey's interaction with international labor standards. The ratified conventions include:

Forced Labor

  • Forced Labor Convention, 1930 (No. 29)
  • Abolition of Forced Labor Convention, 1957 (No. 105)

Freedom of Association

  • Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87)
  • Right to Organize and Collective Bargaining Convention, 1949 (No. 98)

Child Labor

  • Minimum Age Convention, 1973 (No. 138)
  • Worst Forms of Child Labor Convention, 1999 (No. 182)

Discrimination

  • Equal Remuneration Convention, 1951 (No. 100)
  • Discrimination (Employment and Occupation) Convention, 1958 (No. 111)

The ratification of ILO conventions has a substantial impact on domestic labor legislation in Turkey. Turkey's primary labor laws include the Labor Law (No. 4857), Trade Unions Law (Law No. 2821), Law on Occupational Health and Safety (Law No. 6331), and Law on Work Permits for Foreign Nationals (No. 4817). These laws are significantly shaped by ILO standards.

Impact of ILO Conventions on Turkish Law

For instance, the minimum working age in Turkey aligns with Convention No. 138. Provisions related to equal pay and non-discrimination find their base in Conventions No. 100 and No. 111. Law No. 6331 was developed with significant input from ILO standards.

Monitoring and Enforcement

Several mechanisms oversee Turkey's compliance with international labor standards. The ILO's Committee of Experts on the Application of Conventions and Recommendations (CEACR) examines Turkey's reports on compliance with ratified conventions. The Ministry of Labor and Social Security (ÇSGB) is primarily responsible for implementing and enforcing labor laws in Turkey. Trade unions and civil society also play a vital role in monitoring labor conditions and advocating for workers' rights.

Challenges and Areas of Improvement

Despite progress, challenges in complying with international labor standards remain. Child labor persists in certain sectors, such as agriculture and small businesses. A substantial informal workforce makes regulation and enforcement particularly difficult. Some restrictions remain on workers' rights to form and join unions. Turkey continues working towards greater compliance with international labor standards, focusing on strengthening enforcement mechanisms, addressing concerns in high-risk sectors, and promoting effective social dialogue between the government, unions, and employer organizations.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.