Are Employment Contracts For Foreign Employees Working With Work Permits Considered Fixed-Term?

I. Elements and Conditions of a Fixed-Term Employment Contract

Article 11 of Labor Law No. 4857 defines a fixed-term employment contract as a written contract between an employer and an employee for fixed-term work or for the completion of a specific task or the occurrence of a specific event, based on objective conditions. Therefore, it is understood from the text of the article that certain conditions must be met in order for a valid fixed-term employment contract to be signed.

Accordingly, the fundamental elements of a fixed-term employment contract are:

• The duration must be predetermined,
• There must be an objective reason (arising from the nature of the work),
• The parties must have clearly defined the limits of this duration in the contract.

In this context, the conditions of a fixed-term employment contract are as follows.

I.a. Pre-Determination of the Term in a Fixed-Term Employment Contract

For a fixed-term employment contract to exist, the employment relationship must first be limited to a specific period by the parties. The duration may be explicitly stated in the contract as a calendar period (e.g., February 1 to June 1) or implied. Examples of situations where the duration is implied include hiring a driver for a business trip or a specific journey, hiring a worker to cover for an employee on sick leave or maternity leave, or hiring a worker to complete outstanding tasks.

I.b. Objective Reason for Entering into a Fixed-Term Employment Contract

The relevant legal regulation in the Labor Law stipulates that, in addition to the duration being specified in the employment contract, there must also be an objective reason for the employment relationship to be tied to a specific duration. The objective reasons are listed below:

• The work is to continue for a specific period,
• The employment contract is made for the purpose of completing a specific task,
• The occurrence of a specific event.

If, at the time the contract is concluded, the date on which the work covered by the contract will end is known or can be known it is assumed that the work will continue for a specific period. Contracts signed for specific situations, such as the completion of a project or the hiring of an employee to replace personnel on maternity leave, are also considered fixed-term contracts if they meet the other conditions. Furthermore, Article 11 of Law No. 4857 refers to "such objective conditions," thereby allowing for the conclusion of fixed-term employment contracts in situations similar to those listed in the law.

I.c. Fixed-Term Employment Contracts Must, as a Rule, Be in Writing

While Article 8 of the Labor Law essentially requires employment contracts with a term of one year or longer to be in writing, Article 11 of Law No. 4857 stipulates that fixed-term employment contracts must be in writing in order to be considered valid without any time restrictions.

II. Work Permit Applications and Conditions for Foreigners

Law No. 6735 on International Labor Force contains various regulations regarding work permit periods. Article 10 of Law No. 6735 stipulates that foreigners shall be granted a work permit valid for up to one year upon their initial application, provided that it does not exceed the duration of the employment or service contract. If the extension application is evaluated positively in accordance with the procedure, the foreigner shall be granted a work permit valid for up to two years upon their first extension application with the same employer. and up to three years for subsequent extension applications.

The same article stipulates that foreigners who have a long-term residence permit in Turkey or at least eight years of legal work permit may apply for an indefinite work permit, but this does not grant the foreigner an absolute right.

III. The Effect of Obtaining a Work Permit on the Type of Employment Contract

It is possible to examine the Court of Cassation's case law regarding disputes arising from foreign employees working under work permits by dividing it into two periods. In its earlier decisions, the Court of Cassation considered the employment contract signed by a foreign employee for the purpose of obtaining a work permit to be a fixed-term employment contract based on a substantial reason, primarily due to the fact that the work permit was granted for a specific period. In this context, it ruled that employment contracts renewed multiple times for the purpose of continuing the work permit procedure would not become indefinite-term employment contracts, and would retain their fixed-term nature.

For example, in a decision issued during this period by the 9th Civil Chamber of the Court of Cassation¹: "...The plaintiff employee is a foreign national and has worked at the defendant's workplace for more than six years as a member of the teaching staff and as an artist under renewed employment contracts. Considering that the plaintiff worked with fixed-term permits under Law No. 4817 on Work Permits for Foreigners and the nature of the job, it should be accepted that there was a valid reason for entering into a fixed-term employment contract for one or two semesters. Therefore, it is not possible for multiple renewed employment contracts to convert the employment relationship into one of indefinite duration. Consequently, the plaintiff's claim for notice compensation should be rejected..." Thus, it was emphasized that the employment contract would retain its fixed-term nature.

However, following the closure of the 22nd Civil Chamber of the Court of Cassation and its merger with the 9th Civil Chamber, a change in opinion was made in the principle decisions published in September 2020 to ensure consistency in case law. It was emphasized that, for employees working in Turkey, the mere element of foreignness does not constitute an objective reason for entering into a fixed-term employment contract, that the fact that the employee's work or residence permits are temporary is not relevant in this regard, and that, therefore, it is not decisive in determining whether the employment contract is fixed-term or indefinite-term.

Currently, in decisions issued by the Court of Cassation on this matter, the determination of whether the employment contract signed with a foreign employee continuing to work under a work permit is for a fixed term or indefinite term is made by examining the specific employment relationship. The employment relationship is considered fixed-term if the conditions specified in Article 11 of Law No. 4857 are met, and indefinite-term otherwise.

In a recent decision on this matter, the 11th Civil Chamber of the Izmir Regional Court of Justice ruled that²: "...The plaintiff's attorney argued in his appeal that his client's employment contract was a fixed-term contract and that he was entitled to the remaining salary for the duration of the contract. According to the case law of the Court of Cassation, work and residence permits for foreigners working in Turkey are determined according to the term of the contract, and whether the employment contract is fixed-term should be determined according to the legal conditions set out in Article 11 of the Labor Law. (Çil, Ş., Labor Law Supreme Court Principle Decisions, (2019 - 2021), p. 322).

In the specific dispute, an undated employment contract was drawn up between the parties, with the start date of the job determined as the date permitted in the work permit. The contract was for a period of one year, and it was stipulated that if an application was made to the Ministry of Labor and Social Security for an extension of the work period and permission was granted, the employee would continue to work at this workplace at the end of the employment contract. According to the employment contract, the plaintiff was hired as a "Patient Consultant." Due to the nature of the work requiring continuity, and since there are no objective conditions under Article 11 of the Labor Law, the plaintiff's employment contract is not for a fixed term. Therefore, the decision of the Court of First Instance to reject the plaintiff's claim for the remaining period's wages is correct..." Thus, the nature of the employment contract was determined based on the nature of the work performed, not on the work permit application.

IV. Conclusion

Consequently, employment contracts signed with foreign employees cannot be considered fixed-term solely because their work permits are temporary. In this regard, a conclusion will be reached based on whether the conditions specified in Article 11 of Law No. 4857 are met.

In court decisions on this matter, it is accepted that the employment contract is indefinite duration in cases where foreign employees are employed without a work permit or where the work permit hes been granted for an indefinite period. Similarly, if there is no objective reason for the renewal of a fixed-term employment contract signed in accordance with the procedure at the outset, the employment contract will be considered an indefinite-term contract.

Footnotes

1. The Court of Cassation, 9th Chamber, Decision dated October 11, 2005, Case No. 2005/12936, Decision No. 2005/33070.

2. Decision of the 15th Chamber of the Izmir Regional Court of Justice dated March 28, 2024, Case No. 2021/1421, Decision No. 2024/746.

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