“De facto termination” in light of the decisions of the court of cassation
In Turkish labour law practice, “de facto termination” refers to the termination of an employment relationship through the conduct of one of the parties to the employment contract, without an express declaration of termination.
According to the case law of the Court of Cassation, conduct such as an employee ceasing to go to work, an employer refusing to allow an employee to enter the workplace, the employer blocking an employee’s access to the company’s computer systems or vehicles, or the employer placing an employee on unpaid leave without their consent may constitute de facto termination, where the conduct clearly demonstrates an intention to terminate the employment relationship.
This article examines the concept of de facto termination and the circumstances in which it may arise from the perspective of both employees and employers, taking into account the current case law of the Court of Cassation.
1. Intention to Terminate Through Conduct
As a general rule, the termination of an employment contract is not subject to any specific form requirement. A termination may therefore be communicated in writing or orally or may be inferred from conduct that clearly demonstrates the intention to terminate the employment relationship.
In the case law of the Court of Cassation, conduct such as the employer withdrawing the employee’s workplace access card,[1] preventing the employee from entering the workplace, blocking the employee’s access to the company’s computer systems, or the employee’s unexcused absence may be regarded as the de facto termination of the employment contract.
For de facto termination to be established, the conduct of the terminating party must clearly and unequivocally demonstrate an intention to end the employment relationship. Particularly in its recent decisions, the Court of Cassation has separately examined whether the initial conduct genuinely reflected such an intention. Accordingly, an employee’s failure to come to work or an employer’s failure to allow the employee to commence work does not, in itself and without consideration of the surrounding circumstances, necessarily constitute de facto termination.
2. Effective Date of De Facto Termination
One of the principal issues in determining whether de facto termination has occurred is identifying which party terminated the employment contract and the date on which the termination took effect. In its recent decisions, the Court of Cassation has also considered whether the initial conduct reflected an intention to terminate and whether that conduct was based on just cause.[2]
Similarly, if the employer has effectively suspended the employee from work, a formal notice sent by the employee later does not, in most cases, change the termination date of the contract. By removing the employee from the workplace or otherwise making it impossible for the employee to continue working, the employer may be deemed to have already terminated the employment relationship through its conduct, regardless of any subsequent notice or claim made by the employee.
3. De facto Termination Initiated by the Employee
a) Failure to Report for Work Based on Just Cause
An employee’s failure to report for work is one of the most common circumstances in which allegations of de facto termination arise.
The Court of Cassation examines the reasons underlying the employee’s absence. Where the employee’s conduct is based on circumstances constituting just cause under the Labour Law No 4857 (the “Labour Law”), “the employment contract may be deemed to have been terminated by the employee through conduct and for just cause.”
Examples may include;
- Failure to pay the employee’s wages,
- Failure by the employer to implement the agreed working conditions; and,
- Failure by the employer to provide the employee with work,
In such circumstances, the employee’s cessation of work may constitute termination for just cause. The employee may therefore be entitled to severance pay. However, since the employee is regarded as the party terminating the employment contract, the employee will not ordinarily be entitled to notice pay.
In this context, the Court of Cassation holds that where an employee leaves the workplace without expressly stating the reason for doing so, the termination may nevertheless be regarded as having been made for just cause if, as of the termination date, the employee had outstanding wage-related receivables or if, under the principle of good faith, the employee could not reasonably have been expected to continue the employment relationship.[3]
b) Unilateral Changes to Working Conditions Without the Employee’s Prior Written Consent
The implementation of an essential change to an employee’s working conditions by the employer is subject to the procedure set forth in Article 22 of the Labour Law. Accordingly, the employer must notify the employee of the proposed substantial change in writing, and the change will become binding only if the employee accepts it in writing within six working days following receipt of the notification.
That being the case, the Court of Cassation has held that if an essential change is implemented without the employee’s consent, the employee has the right to refrain from performing work, and – depending on the specific circumstances of the case – the employee is deemed to have terminated the employment contract for just cause due to the failure to apply the working conditions.[4]
c) The Employee’s Failure to Report for Work Without Just Cause
Where an employee ceases to report for work without permission, justification, or a valid reason falling within the scope of Article 24 of the Labour Law, the employee may be deemed to have terminated the employment contract through resignation without just cause.
On the other hand, according to Court of Cassation case law, if an employee fails to continue working without providing a valid excuse or a medical certificate to justify the absence, the employer may terminate the employment contract for just cause pursuant to Article 25 of the Labour Law based on the employee’s absence.[5]
Consequently, in practice, an employee’s conduct demonstrating an intention to abandon the employment relationship may overlap with the employer’s right to terminate the contract for just cause due to absence. In such cases, it is necessary to determine which party first demonstrated a clear intention to terminate the employment contract. The reason for termination to be notified to the Social Security Institution should also be determined on the basis of the party whose conduct first brought the employment relationship to an end.
4. De facto Termination Initiated by the Employer
a) Preventing the Employee from Performing Work
An employer’s refusal to allow an employee to work, despite the employment relationship continuing to exist formally, may demonstrate an intention to terminate the employment contract through conduct.
Specific examples of the employer depriving the employee from performing work include situations such as;
- cancelling or withdrawing the employee’s workplace access card;
- preventing the employee from entering the workplace;
- blocking the employee’s access to company computer systems;
- withdrawing company vehicles or other work-related equipment; and
- otherwise making it impossible for the employee to perform their duties.
In one case examined by the Court of Cassation, an employee reported to the workplace at the beginning of the relevant working season in accordance with the employment contract, but was not permitted to commence work. The employer was held to have wrongfully terminated the employment contract through its conduct.[6]
b) Placing the Employee on Unpaid Leave without Their Consent
According to the established case law of the Court of Cassation, placing an employee on unpaid leave without their consent may constitute a substantial change to the employee’s working conditions. In particular, where an employer places only certain employees on unpaid leave, without an objective or valid reason and in a manner contrary to the principles of equal treatment and good faith, the conduct may be interpreted as de facto termination by the employer. In such circumstances, the employment contract may be regarded as having been terminated on the date on which the employee actually ceased working, namely the date on which the employee was placed on unpaid leave.
CONCLUSION
According to case law of Court of Cassation, the termination of an employment contract may arise not only from an express written or oral declaration but also from the conduct of the parties. In this context; (i) an employee’s cessation of work due to the non-payment of employment-related receivables or the employer’s failure to implement the agreed working conditions may constitute de facto termination by the employee; and (ii) an employer’s refusal to allow an employee to work, or the employer’s placement of an employee on unpaid leave without consent, may constitute de facto termination by the employer.
In both cases, the fundamental approach is to determine who initiated the act of termination first. The prevailing approach of the Court of Cassation is that absence records prepared or warning notices issued after the employment contract has already been terminated through conduct will not alter the fact that the employment relationship ended as a result of the initial terminating conduct.
However, in recent decisions rendered by the General Assembly of Civil Chambers and the 9th Civil Chamber of the Court of Cassation, the assessment was not limited to the parties’ conduct. The courts also considered whether the conduct was based on just cause, whether it created a factual impossibility preventing the continuation of the employment relationship, the applicable burden of proof, and the principle that the parties are responsible for presenting the facts and evidence on which they rely.
Accordingly, depending on its underlying grounds, de facto termination may be characterised as termination for just cause by either the employee or the employer, and may therefore give rise to the compensation and employment-related receivables available to the relevant party under Turkish labour law.
