LEGAL IMPLICATIONS OF THE RECENT PRACTICE CHANGE REGARDING SOCIAL SECURITY INSTITUTION (“SSI”) TERMINATION CODES
In every kind of termination of employment contracts in Türkiye, employers enter into the SSI system, the reason of termination under the codes that are listed in numerous clauses in the system. These codes have practical consequences for entitlement to unemployment allowance from the state and compensation claims (specifically notice pay and severance pay) from the employer. These termination codes defined in the system by the Employer could be viewed from the system by the employee himself /herself and also by the third parties including new/ potential employers of the employee, therefore they could have an effect on future employment relations/ chances of the relevant employee.
Depending on the judgment of the 10th Chamber of Council of State, dated 14 October 2024 and numbered 2020/2598E. 2024/3991K. SSI has recently introduced a change in the system related with the visibility of SSI termination codes by employers/ third parties.
It is important to clarify that this change does not abolish the SSI termination code system. Employers remain under a legal obligation to notify SSI of the termination reason using the relevant termination code. These codes continue to be recorded within internal systems of SSI and the employee’s file. Furthermore, termination codes may still be considered by SSI authorities when assessing entitlement to unemployment benefits and other social security rights. Accordingly, the current practice constitutes a restriction on visibility and access with the purpose of protecting the personal rights of the employee, rather than the elimination of termination codes.
- From the employer’s perspective, the removal of termination codes from publicly accessible service records does not reduce legal liability. The employer’s obligation to justify the termination in a lawful, clear, and concrete manner remains unchanged. Written termination notices, consistency between the actual circumstances and SSI notifications, and the ability to substantiate the termination reason with evidence are of increased importance. Any inconsistency between the declared termination reason and the actual circumstances may still give rise to reinstatement claims, severance and notice pay liabilities, or bad-faith compensation.
- From the employee’s perspective, the new practice significantly reduces the risk of automatic labeling and adverse evaluations during recruitment processes. However, the absence of termination codes on service records does not imply that the termination itself is lawful or that employees are deprived of legal remedies. Employees are still required to preserve termination notices, payroll records, correspondence, and other relevant evidence to effectively pursue their rights before administrative authorities or courts.
In conclusion, the recent change concerning SSI termination codes does not eliminate the legal existence or effects of such codes but limits their visibility to third parties which does not have an effect on the legal consequences of a termination process. Both employers and employees are therefore required to approach termination processes with utmost legal diligence.
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