TERMINATION OF EMPLOYMENT BASED ON EMPLOYEE PERFORMANCE
As part of our Law Firm’s regular publications on Turkish Labor Law, we would like to share this newsletter, which may be of particular interest to companies in relation to performance evaluation processes. In this newsletter, we address the key legal considerations relating to such processes, as well as the principal practical issues that should be taken into account in their implementation.
According to Article 18/1 of the Labor Code No. 4857 (the “Code”), in workplaces employing thirty or more employees, an employer who terminates the indefinite-term employment contract of an employee with at least six months of seniority must rely on a valid reason arising from the employee’s competence or conduct, or from the operational requirements of the enterprise, the workplace, or the job. Pursuant to Article 20/2 of the Code, the burden of proof that the termination is based on valid ground, rests with the employer.
While evaluating which cases may be considered as an example of incompetence, one of the legal grounds that we refer to is the Code’s preamble. The preamble of the Code provides some examples of employees’ incompetence. These mainly include:
- Working less efficiently, on average, than other employees performing comparable work;
- Demonstrating a level of performance below that reasonably expected in light of the employee’s qualifications and competencies;
- A gradual decline in the employee’s ability to concentrate on work;
- Lack of aptitude or suitability for the job;
- Insufficient ability to learn and develop professional skills;
- Frequent illness-related absences;
- Medical conditions that continuously affect the employee’s ability to perform his/her duties, without rendering him/her entirely incapable of working;
- Inability to adapt to the workplace, work environment, or job requirements.
In its decision dated 9 March 2009 and numbered 2008/20570 E.- 2009/6142 K. (the “Decision”), the 9th Civil Chamber of the Court of Cassation (the “Court”) held that, in addition to the situations set out in the legislative rationale, termination for a valid reason may also be applied where the employee fails to meet expectations regarding efficiency stipulated in;
- the employment contract concluded with the employee,
- the workplace personnel regulations,
- corporate working principles, or
- the performance evaluation criteria specific to the workplace.
Turkish jurisprudence further emphasizes that, for an employee’s performance and productivity to constitute a valid ground for termination, objective and measurable criteria must be established and a Performance Evaluation System specific to the workplace, through which employees’ performance shall be assessed, should be developed and implemented in the workplace as declared to the employee. For performance evaluation to be considered objective and to constitute a valid ground for termination, the performance evaluation criteria must be determined in advance and notified to the employee.
These criteria to be declared to the employee based on which employee’s performance shall be assessed, must be based on;
- the competencies required by the job, such as knowledge, skills, and experience
- the workplace-appropriate conduct expected from employees and
- the work and personal development targets expected to be achieved by the employee on a specific term.
In such cases, the employee’s work standards and professional qualifications demonstrated during a specific period may be regarded as the benchmarks accepted by the employer for assessing performance and productivity. Should the employee’s performance fall below these benchmarks and such underperformance continue over time, the employer may have a valid ground for terminating the employment relationship. Moreover, the employee’s performance must demonstrate a consistent and sustained decline over a certain period. In other words, isolated or fluctuating results that depend on particular circumstances and do not exhibit continuity cannot, in principle, be regarded as a valid ground for termination.
That said, in similar cases, the Court of Cassation has consistently emphasized that, before resorting to termination as “last resort”, the employer must also demonstrate that it has taken reasonable steps to improve the employee’s performance, such as providing training, guidance, supervision, or other performance-enhancing measures.
As a final point, we would like to remind that, pursuant to Article 19/2 of the Code, an employee’s indefinite-term employment contract cannot be terminated for reasons related to the employee’s conduct or performance without first obtaining the employee’s defense against the allegations.
Accordingly, employers intending to terminate an employment relationship on the grounds of poor performance should ensure that objective and measurable performance criteria have been established, that any performance deficiencies are documented and demonstrated to be continuous, and that reasonable opportunities for improvement have been provided to the employee. In light of the Court of Cassation’s established case law, a performance-based termination is more likely to be deemed valid where the employer can demonstrate that termination was implemented only after less severe measures proved insufficient to address the performance concerns. Employers should also request employee’s defense statement before any termination.
Our Law Firm remains at your disposal for any further clarifications you may need.
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