Constitutionality Review

Contested Provision

The contested provision stipulates that employment contracts shall be governed by the law chosen by the parties, without prejudice to the minimum protection afforded to the employee under the mandatory provisions of the law applicable to her/his habitual place of work.

Ground for the Request for Annulment

It was maintained in brief that in disputes concerning employees’ receivables arising from work performed abroad, the application of the law of the habitual place of work pursuant to the impugned provision could deprive employees of their constitutional rights. It was argued that Turkish employees working abroad for companies incorporated in Türkiye were, due to the application of foreign law, unable to benefit from the rights granted to employees of the same companies working in Türkiye. This situation was claimed to be incompatible with the principle of equality and to breach the State’s obligation to protect employees, rendering the contested provision unconstitutional.

The Court’s Assessment

The determination of the law applicable to employment contracts containing a foreign element, i.e. the conflict-of-laws provision, is within the legislature’s discretion. Accordingly, allowing for a choice of law in employment contracts also falls within that discretion. However, any provision governing the applicable law to such contracts must not conflict with the State’s positive obligations to protect employees.

In this regard, the absence of safeguards preventing a choice of law from producing detrimental consequences for employees would be incompatible with the State’s positive obligations to protect employees.

Pursuant to Article 27 § 4 of Law no. 5718 on International Private and Procedural Law, in consideration of all circumstances if there is a law more closely related to the employment contract, instead of the law set forth in Paragraphs (2) and (3) thereof, that particular law shall apply.

Accordingly, where no choice of law is made, it is possible for the employment contract to be governed by the law more closely related to it instead of the law of the habitual place of work. By contrast, where the parties have chosen a governing law, the application of the law more closely related to the employment contract is not allowed. As a result, a choice of law may operate to the detriment of the employee.

Indeed, it is evident that the employee, the weaker party to the employment contract, generally has limited bargaining power vis-à-vis the employer in choosing the applicable law.

Moreover, it is highly difficult for an employee, particularly in a technical field such as labour law, to acquire, through her/his own efforts, sufficient knowledge of the content of a foreign legal system, the determination of which may even pose challenges for judges, and to foresee whether the application of the relevant law would be in favour of her/him.

In light of these considerations, it has been observed that through a choice of law, the employer could evade obligations imposed by the law that is more closely related to the employment contract, thereby depriving the employee of the protection afforded by that law.

Accordingly, the Court has concluded that the contested provision, which may deprive the employee of the rights she/he would enjoy in the absence of a choice of law, fails to strike a reasonable balance in employer-employee relations and is incompatible with the State’s positive obligations to protect employees.

Consequently, the contested provision has been found unconstitutional and therefore annulled.