Fixed-term employment contracts are employment contracts concluded between the employer and the employee for a certain period of time and terminate automatically at the end of this period. Such contracts are usually entered into for the purpose of completing a project, performing a specific work or meeting a temporary need. Fixed-term employment contracts are regulated under Article 11 of the Labor Law No. 4857 ("Law"). Under Article 11 of the Law, fixed-term employment contracts are subject to objective conditions such as "the completion of a certain work or the occurrence of a certain event". Pursuant to the Law, fixed-term employment contracts that do not meet these conditions are deemed to be indefinite-term employment contracts from their inception. Similarly, "chained" fixed-term employment contracts that are concluded successively without an objective reason are also considered as indefinite-term by the Court of Cassation from the beginning.
As stated above, fixed-term employment contracts are contracts that automatically terminate upon the expiration of the contract period or the termination of the work. However, fixed-term employment contracts may also be terminated before expiration for various reasons. Unlike indefinite-term employment contracts, there is no obligation to comply with the notice periods set out in the Law in the event that a fixed-term employment contract is terminated before its expiration.
Since fixed-term employment contracts are self-terminating contracts, there will be no notice period at the end of such contracts and unlike indefinite-term employment contracts, the right to severance pay will not arise. However, according to the practice of the Court of Cassation[1], in the event that fixed-term employment contracts are terminated as a result of situations such as retirement, termination of the employee with just cause or termination of the employer without valid reason and the contract lasts longer than 1 year, the employee may still be entitled to severance pay. This
is because Article 14 of the Law No. 1475, which is still in force, does not distinguish between fixed-term and indefinite-term employment contracts regarding the right to severance pay.
For fixed-term employment contracts, there is no obligation to comply with the notice periods and there is no obligation to receive notice pay. However, pursuant to Article 438 of the Turkish Code of Obligations, in fixed-term contracts, if the employer terminates the contract immediately without just cause, the employee may claim as compensation the amount that he/she would have earned if these periods had been observed. However, the amount saved by the employee due to the termination of the service contract, if any, and the income obtained from another job or knowingly refrained from obtaining, shall be deducted from the compensation. Moreover, the judge may award a compensation not more than 6 months' salary of the employee, taking into account the circumstances of the concrete case.
As a result, fixed-term employment contracts are contracts concluded between the employer and the employee for a certain period of time and terminate automatically at the end of this period. For this reason, as a rule, the employee will not be entitled to severance pay and notice pay; however, in the presence of certain circumstances, the employee may be entitled to severance pay and compensation for termination contrary to the term of the contract. For this reason, it is important to clearly determine the rights and obligations of the employee and the employer and to act in accordance with the provisions of the contract and the relevant legal regulations.
[1] See e.g.: Court of Cassation 22nd H.D., 20.01.2020, E. 2016/27696, K. 2020/622.