Gün + Partners
Gün + Partners is one of the largest law firms in Turkey. It provides a full range of legal services for local and international corporate clients. The firm has eight partners and over 70 lawyers. All the firm’s lawyers are bilingual and fluent in English, and some have German, French and/or Russian as a third language. The firm is based in Istanbul and has working offices in Ankara and Izmir.Show more
Arbitration & ADR
Mandatory mediation for commercial disputes was recently introduced by the Law on Legal Procedures to Initiate Proceedings for Monetary Receivables arising out of Subscription Agreements. As a result, an application for mediation is a condition for bringing a legal action before the courts, and a case will be dismissed on procedural grounds if the claimant in a commercial action fails to fulfil this obligation.
Cryptocurrencies were introduced to the Turkish market in July 2013 under the Law on Payment and Security Settlement Systems, Payment Services and Electronic Money. However, there are no limitations on or controls over cryptocurrencies, which is why many investors choose to invest their money in this area. While the interest in and impact of blockchain and cryptocurrencies are growing daily, the legal risks for blockchain and cryptocurrency platforms have yet to be fully understood.
Employment & Benefits
Minimum wage, severance payments and administrative fines prescribed by the Labour Act are revised at the beginning of each calendar year. The minimum wage rate was recently increased to TL2,558.40 (gross) and the maximum severance payment was increased to TL6,017.60 (gross). In addition, the rate of administrative fines was increased by 23.73% compared with 2018.
Effects of recently published presidential executive decree on salaries in or indexed to foreign currencyTurkey | 21 November 2018
The recently published Presidential Executive Decree 85 amended Decree 32 on the Protection of the Turkish Currency. In the field of employment law, it is unclear whether foreign nationals fall within the scope of the decree and how their salaries will be paid going forward. Since the decree uses the term 'Turkish residents', the general understanding is that it also applies to foreign employees, as they must have a residential address in Turkey in order to have a work permit.
The Supreme Court recently issued a number of decisions setting out how to calculate overtime pay and how employees can prove any overtime owed when required. Among other things, the decisions state that signed payslips can be used as material evidence. Further, where an employee has not signed a payslip and overtime payments have been made via bank transfer, the employee must prove that they worked the disputed overtime with documentary evidence.
The Supreme Court recently issued a decision concerning an employee's dismissal for borrowing money from their employer's customer. The Supreme Court reversed the first-instance labour court decision and ruled that the termination was lawful based on the fact that the employee had acted against the rule of integrity and honesty and damaged the employer's reputation.
The Labour Courts Act has introduced a number of changes and amended the appeal procedure for labour disputes. The legislature hopes to shorten the duration of actions which, by their nature, should be resolved as quickly as possible. Although it is still questionable whether these amendments will produce the anticipated returns in terms of reaching the desired duration for trial processes, they mark an important attempt to limit the two-phase appeal stage for certain cases.
The Amendment Act of August 25 2016 introduced the automatic enrolment of employees in private pension plans. As a result, employees under the age of 45 must be enrolled in a private pension plan as part of a pension agreement between their employer and a pension company. As the majority of employees have withdrawn from the system, the Ministry of Finance recently prepared a draft omnibus law which introduced new provisions regarding automatic enrolment in the private pension plan system.
Overtime in Turkey is regulated by the Labour Act and the Regulation on Overtime. Following criticism from legal scholars, the Regulation on Overtime was recently amended. The amendment has clarified that an employee's written consent for overtime can be obtained through an employment contract or during the employment relationship if needed. Therefore, obtaining employee consent at the beginning of each year is no longer required.
The Labour Courts Act, which was recently published in the Official Gazette, aims to ease the judiciary's workload and accelerate the judicial process in employment cases. The act has introduced a number of changes, the most important of which include mandatory mediation for employers and employees before initiating lawsuits, an amended procedure for reinstatement cases and a reduced statute of limitations of five years for several types of compensation.
The Supreme Court recently rendered an important decision concerning the protection of employees' privacy rights. The court reversed a first-instance labour court decision and ruled that the dismissal of an employee was unlawful on the grounds that the employer had used the employee's WhatsApp conversations (obtained in an impermissible way) as evidence, thus violating the employee's right to privacy.
The right of employees to annual paid leave is regulated by Articles 53 to 60 of the Labour Act and the Regulation on Annual Paid Leave. In principle, employees are expected to take their annual leave en bloc. Recent amendments to the act and the regulation maintain the right of employees to continuous rest, but provide flexibility to those who wish to divide their holidays into several parts in a given year.
The Supreme Court recently issued a decision concerning an employee's dismissal on the grounds of (among other things) recording a conversation with his supervisor without his consent. The court reversed a first-instance decision and ruled that the termination was lawful based on the fact that the employee had been handling personal business during working hours without authorisation and secretly recorded a conversation.
A long-awaited legal arrangement on employees' automatic enrolment in private pension plans by their employers was introduced into Turkish law by way of an amendment law published in 2016. The amendment law adds new provisions to the Private Pension Savings and Investment System Act 2001. Accordingly, employees under the age of 45 will be enrolled in a private pension plan with a pension agreement between the employer and a pension company.
The Ministry of Justice recently prepared a new draft Law on Labour Courts and shared it with the relevant public institutions and organisations for review. The draft law aims to ease the judiciary's workload and accelerate the judicial process in employment cases. The most important amendment stipulated in the draft law is the introduction of a mandatory mediation phase. If the draft law is adopted, it will be mandatory for employees to apply for mediation before initiating certain lawsuits.
Insolvency & Restructuring
The Law amending the Enforcement and Bankruptcy Law and Other Laws recently came into force. The most significant amendments introduced to the Enforcement and Bankruptcy Law are the abrogation of the postponement of bankruptcy procedure and the adoption of a more efficient and functional structure for the composition with creditors procedure, which is a court-approved agreement between debtors and creditors.
Turkey has recently faced higher currency exchange rates, which has raised the question of whether this increase constitutes a change in circumstances that affects the fulfilment of contractual obligations. As there is no settled Supreme Court precedent regarding whether a fluctuation in currency exchange rates requires the adaptation of contracts, first-instance courts will need to examine the circumstances of each case.
Since 2012, individuals in Turkey have been able to make individual complaint applications to the Constitutional Court claiming that the state has violated their fundamental constitutional rights (or rights under the European Human Rights Convention) through its acts or omissions. One of the most common claims is that the state has violated an individual's right to a fair trial by failing to meet the reasonable time requirement and concluding criminal cases over long periods, in some cases more than 10 years.
Under Turkish law, there are two types of procedure in civil proceedings. Written procedure is the main and most common type, whereas the simple procedure, as the name suggests, is a simplified and expedited process. Following recent amendments, commercial cases worth less than TL100,000 are now subject to the simplified procedure in order to shorten the length of proceedings.
Preliminary injunctions in Turkey are regulated under the Code of Civil Procedure. A preliminary injunction can be requested from the competent court that has jurisdiction over a case prior to filing or the court before which a case is filed. Applicants must determine the grounds for making such a request in addition to the nature of the preliminary injunction being sought. They must also prove their claim to convince the court that the merits of the case are legitimate.
Article 5 of the Cheque Law imposes a judicial fine on cheque account owners for a bounced cheque. These fines cannot be less than the amount of the bounced cheque plus the accrued interest on the cheque's submission date and the total fees for execution and legal proceedings. Several courts recently applied to the Constitutional Court to request the annulment of Article 5 based on, among other things, the uncertain criteria used to calculate such fines.
Due to the need for the existing court procedural rules and organisational structure to be harmonised with the newly established three-tier court system, amendments have been made to the Code of Civil Procedure with the purpose of eliminating emergent problems in the functioning of regional appellate and administrative courts. The most remarkable amendment regards the period for appeal before the Court of Cassation.
The Regulation on the Determination and Enforcement of Target Investigation, Prosecution or Trial Periods was recently published in the Official Gazette. The regulation sets out the rules and procedures for determining the specific periods in which legal proceedings must be completed, thus ameliorating the judicial process. By establishing and adhering to time limits for legal proceedings, Turkey may be able to eliminate the delays in its judicial system.
If a foreign national who owns real estate in Turkey dies, his or her successors must have recourse to the Turkish courts and obtain a certificate of inheritance in order to complete the transfer of the real estate under their names before the land registry or be able to legally dispose of the property in any manner. A recent case illustrates that this issue can be overcome by the submission of specific documents issued by the competent authorities of foreign countries, testament or notary statements.
The court of peace recently appointed the former partner of a liquidated company as a gratuitous bailee to preserve the company's books. The decision created an alternative approach to the preservation of the books of liquidated companies, which must be preserved by a court of peace. The new approach should help to address concerns regarding the court's limited amount of storage space for company books.
A recent Court of Appeals case concerned a resolution taken at a general assembly meeting where the signature of the shareholder plaintiff's representative had been forged. As it was established without doubt that the signature on the general assembly meeting minutes did not belong to the plaintiff's representative, the court declared that the decisions taken at the general assembly were null and void.
In order for an invoice to generate a payment obligation on its recipient, Turkish law requires that there be an obligatory relationship between the drafter and recipient. A recent case confirmed that even when the recipient of an invoice does not object to it and inadvertently records it in its accounting books, this does not result in a payment obligation unless the invoice has a legal basis.
The recognition and enforcement of foreign judgments and arbitral awards in Turkey is subject to the International Private and Civil Procedure Law, under which enforcement actions must be filed before the civil courts of first instance, including certain specialised courts. The Court of Appeals has generally adopted a single approach regarding the jurisdiction of specialised courts in enforcement actions, but a recent decision has created uncertainty in that regard.
Product Regulation & Liability
The Ministry of Food, Agriculture and Livestock recently published the Food Codex Energy Drinks Communique 2017/4 in the Official Gazette. The communique introduces significant amendments to the market supply, advertising, labelling and sale of energy drinks, the most important of which prohibits the sale of energy drinks to individuals under the age of 18. Business operators must comply with the new communique no later than December 31 2017.
White Collar Crime
Computers, computer programs and records used by suspects are among the most important evidence for public prosecutors who carry out external investigations relating to white collar crime. There is no definition of 'electronic evidence' in Turkey, but Article 134 of the Code of Criminal Procedure sets out the procedure for searching, copying and seizing computers, computer programs and records. An amendment to Article 134 concerning the collection of electronic evidence procedures was recently published.
In the absence of any clear guidance with regard to attorney-client privilege and white collar crime, the Competition Board's interpretation is a reference for future disputes and investigations. The board has held that companies subject to an investigation may refrain from disclosing their correspondence with their attorneys (and documents subject to this correspondence) provided that they explain who produced it and its purpose.
Transparency International recently published the 2017 Corruption Perceptions Index, which reflects the public sector corruption perspective of non-governmental organisations and representatives of the business world. Turkey came 81st out of 180 countries. This is the fourth consecutive year in which Turkey's ranking has fallen; it has lost 10 points and fallen 28 places over the past five years.
If the evaluation of a whistleblower report is completed without taking fundamental steps or necessary planning, it may result in an improper investigation and the inability to resolve the issue, or even the undertaking of an unnecessary investigation. It is therefore vital to adopt a policy on how to evaluate and treat future whistleblowers, inform employees accordingly and train decision makers in the company.
Transparency International recently published the 2016 Corruption Perceptions Index, which reflects non-governmental organisations' and business world representatives' perception of public sector corruption. Turkey came 75th out of 176 countries. This is the third consecutive year in which Turkey's ranking has fallen and its score is the lowest that the country has received in the past four years.
The Council of Ministers recently enacted a decree-law that amends Banking Law 5411 by introducing a sub-paragraph into Article 160, which regulates the crime of embezzlement committed by bank officers. While the need to make this amendment may at first be questioned, it should be read in light of the background of the crime of banking embezzlement.