The penalty clause, which has a wide application area, is regulated under the Turkish Code of Obligations No. 6098. Although it is not included in the scope of the Labor Law No. 4857, the penalty clause holds significant importance within the context of employer-employee relationships and employment contracts, especially for parties wishing to protect their interests. The most important feature of the penalty clause is that the creditor does not bear the burden of proving that they have suffered damage; instead, they are entitled to monetary compensation in cases where the debtor fails to perform the obligation, or does not perform it properly.
The main purpose of including penalty clause provisions in employment contracts is not only to ensure that the parties fulfill their obligations as stipulated by the contract but also to prevent parties from unfairly and untimely terminating the contract. In practice, it serves to protect the employer who has covered training expenses during the employee's tenure and seeks to recover the loss related to those expenses. Additionally, in cases of breach of non-compete agreements, the penalty clause allows the employer to seek compensation for damages without the need to prove that actual damages have occurred. In practice, various disputes arise between the parties regarding the penalty clause in employment contracts for different reasons. In this article, the legal nature of the penalty clause in employment contracts, along with its validity requirements, types, amounts, and the penalty clause within the framework of non-compete agreements, will be examined.
II. EMPLOYMENT CONTRACT AND THE LEGAL NATURE OF THE PENALTY CLAUSE
The employment contract is defined in Article 8 of the Turkish Labor Code No. 4857 as: "An employment contract is a contract in which one party (the employee) undertakes to work dependently, and the other party (the employer) undertakes to pay wages." It is a type of contract established between the employee and the employer, specifying the terms, obligations, and nature of the work; it imposes an obligation on the employee to perform work and on the employer to pay wages for the work performed. Although the penalty clause is not included in the Turkish Labor Code No. 4857, it is explained in Article 179 of the Turkish Code of Obligations No. 6098 as follows: "If a penalty is agreed upon for the non-performance or improper performance of a contract, unless otherwise agreed in the contract, the creditor may request the performance of either the debt or the penalty." A penalty clause is a type of financial obligation imposed on the debtor party who fails to fulfill the contractual obligation either partially or completely, without requiring the creditor to prove any damage. Thus, it can be said that the penalty clause found in employment contracts is included in the relevant contract to secure the parties' obligations concerning various matters, including termination, training expenses, and non-compete clauses. As mentioned above, although the Turkish Labor Code No. 4857 does not contain a provision on the penalty clause, it is frequently included in employment contracts in practice, and disputes between the parties regarding this matter are commonly observed.
A. VALIDITY ELEMENTS OF PENALTY CLAUSES IN EMPLOYMENT CONTRACTS
Although the penalty clause institution is included in the Turkish Civil Code No. 6098, detailed and comprehensive legal evaluations regarding penalty clauses in employment contracts have been shaped by case law, court decisions, and specific dispute cases.
1. Validity of the Contract In employment contracts, the penalty clause arises when the parties fail to fulfill their obligations under the main contract, either partially or fully. However, if the employment contract, which is considered the main contract, is deemed invalid under the Turkish Labor Law (Law No. 4857), the penalty clause will also be considered invalid, and the parties will not be able to make claims based on that clause. The penalty clause is considered a subsidiary of the main contract. Similarly, due to its subsidiary nature, if the underlying obligation has expired or the obligation in the main contract changes, and if the obligation cannot be performed, the penalty clause related to it cannot be claimed either.
2. The Penalty Clause as a Different Obligation from the Main Contractual Duty
The penalty clause, which should have an economic value separate from the obligations imposed on the parties in the main contract, must have an independent appearance and material value from the primary obligation.
3. Fairness of the Penalty Clause When considering the parties to an employment contract as the employee and the employer, and adding the principle of interpreting in favor of the employee, one of the primary requirements is that the penalty clause must be fair. The concept of fairness is a general principle of law and is also taken into account in constitutional jurisprudence. It means that the judge must use this principle while considering the specific characteristics of the case and ensuring that justice is served. Although the principle of freedom of contract means that the parties are not restricted in their will when establishing a penalty clause, they must still adhere to fairness standards.
4. Penalty Clause Must Not Contradict the Law, Morality, and Personal Rights, or Be Impossible As with all contracts, regardless of their type and purpose, it is required that the provision regarding the penalty clause is not in violation of the law, morality, and personal rights. Additionally, the performance of the obligation related to the penalty clause must not be impossible. This issue is clearly addressed in Article 27 of the Turkish Code of Obligations No. 6098, which states: "Contracts that are contrary to the mandatory provisions of the law, morality, public order, or personal rights, or whose subject matter is impossible, are void. The invalidity of some provisions of the contract does not affect the validity of the others. However, if it is clear that the contract would not have been made without these provisions, the entire contract shall be void." If the penalty clause is in violation of the law, morality, personal rights, or is impossible, the relevant provision will be directly deemed invalid, and the penalty clause cannot be claimed from the concerned party.
5. The Requirement for the Penalty Clause to Contain Reciprocity The penalty clause in an employment contract must contain the element of reciprocity. According to the principle of reciprocity, a penalty clause imposed only on the employee is considered invalid. This issue is frequently addressed in Supreme Court decisions, and Article 420 of the Turkish Code of Obligations No. 6098 states: "A penalty clause imposed solely against the employee in service contracts is invalid." In this regard, the penalty clause in employment contracts should either be imposed for the benefit of both parties according to the principle of reciprocity or, in accordance with the principle of interpretation in favor of the employee, only for the benefit of the employee.
B. TYPES OF PENALTY CLAUSES IN EMPLOYMENT CONTRACTS
1. Penalty Clause Regarding Termination of the Contract If the parties wish to include a penalty clause regarding termination in an employment contract, they can only do so in fixed-term employment contracts. Penalty clauses related to the termination of indefinite-term employment contracts are considered invalid. This is because the purpose of the penalty clause related to termination is to prevent the termination of the contract without just cause before the agreed working period or the duration of the contract. Therefore, if the contract is terminated without just cause before the specified term, the party terminating the contract will be required to pay the penalty. Although Article 182 of the Turkish Code of Obligations states, "The parties may freely determine the amount of the penalty," the amount should still be set in accordance with the principle of fairness.
2. Penalty Clause Regarding Training Costs Another type of dispute related to penalty clauses encountered in practice arises in the context of penalty provisions regarding training costs. Upon the employer’s desire for a more qualified and skilled employee, and with the aim of gaining an advantage in the industry, the employer often provides various trainings to the employee, mostly related to the job field they are in. The costs of these trainings are typically covered by the employer. In return for the investment in both qualifications and knowledge, the employee is expected to work for the employer within the time period determined by both parties, in exchange for bearing the training expenses.
In this way, since the employer has covered the training expenses and can now benefit from a more qualified and knowledgeable employee, the employee is expected to work for the employer during the specified period. A penalty clause is established to prevent the employee from terminating the contract before the agreed work period ends. It is essential that the amount of this penalty clause is determined according to fairness criteria; the penalty amount should be proportional to the commitment period and the training expenses. If the employee does not work for the employer for the entire specified period, the penalty amount will be calculated by deducting the time worked from the total amount. When determining the validity of penalty clauses regarding training expenses, the Court of Cassation looks for proportionality between the "training provided to the employee" and the "amount the employee must pay." The employee is not required to pay the penalty if they have worked for the entire specified period or if they have terminated the employment contract for justifiable reasons.
3. Penalty Clause Regarding Non-Compete Obligation Another area where penalty clauses appear in employment contracts is related to non-compete obligations. The non-compete clause is regulated under Article 396 of the Turkish Code of Obligations: "During the term of the employment relationship, the employee may not, contrary to the duty of loyalty, provide services to a third party for remuneration or engage in competition with their employer, particularly in their own business. The employee may not use or disclose to others the information learned during the course of their work, especially production and business secrets, for their own benefit during the continuation of the employment relationship. To the extent necessary for the protection of the employer's legitimate interests, the employee is also obliged to keep such secrets after the termination of the employment relationship." Additionally, according to Article 444 of the Turkish Code of Obligations: "An employee with legal capacity may undertake in writing not to compete with the employer in any way after the termination of the contract, particularly by establishing a competing enterprise on their own behalf, working in another competing enterprise, or entering into any other type of beneficial relationship with a competing enterprise." In this context, during or after the employment relationship, the employee is prohibited from engaging in any business that would compete with the employer, working for or partnering with another competing organization, or assuming any position that might place them in competition with the employer. If the employee breaches the non-compete obligation during or after the employment relationship, causing damage to the employer, they are obliged to compensate for the loss. However, as the employer must prove the damage suffered, employers often include penalty clauses related to the non-compete obligation within the employment contract. This way, the employer can secure their interests under the penalty clause without the burden of proving the loss caused by the employee’s breach of the non-compete obligation.
III. AMOUNT OF PENALTY CLAUSE AND THE JUDGE'S POWER TO REDUCE Article 182 of the Turkish Code of Obligations No. 6098 states that "The parties may freely determine the amount of the penalty." In line with this provision and the principle of freedom of contract, the parties are entitled to set the penalty amount at their own discretion. Although the parties are granted the right to determine the amount of the penalty clause, it must comply with the principle of fairness, as emphasized under the heading of the validity conditions of the penalty clause. Pursuant to Article 161/3 of the Turkish Code of Obligations No. 6098, the judge has the authority to reduce the penalty amount if deemed excessive. However, it is essential that the fairness criterion to be applied by both the judge and the contracting parties be evaluated in light of the specific circumstances of each case. When examining the amount of the penalty clause, the judge considers several factors, including the interest of the creditor, the fault of the liable party in the particular case, and the severity of the breach that triggered the penalty obligation. For instance, when determining the amount of a penalty clause related to training expenses as opposed to one concerning a non-compete obligation, naturally, different criteria and financial conditions are taken into account. The judge evaluates the damage suffered by the party whose interest has been compromised, as well as the economic circumstances of the parties involved.
IV. CONCLUSION An employment contract, as regulated under Article 8 of the Turkish Labor Law No. 4857, is a type of contract that governs the employment relationship between the employee and the employer, outlining the conditions, obligations, and the nature of the work. It imposes the obligation on the employee to perform work and on the employer to pay wages in return for the performed work. The penalty clause, on the other hand, is regulated under the Turkish Code of Obligations No. 6098 and constitutes a financial obligation imposed on the debtor who fails to fulfill or properly perform the obligation stipulated in the contract, without the need for the creditor to prove any damage. The primary purpose of penalty clauses included in employment contracts is to protect the parties' interests arising from the contract.
One of the most frequently encountered penalty clauses in employment contracts in practice is related to termination. The termination penalty clause, which can be included in fixed-term employment contracts, aims to prevent the premature termination of the contract without just cause before the end of the agreed working period. The party who terminates the contract without providing a justified reason before the specified period in the employment contract must pay the stipulated penalty. Employers may provide domestic or international training to their employees to ensure that the work is performed by more efficient and qualified personnel. The costs of such training are covered by the employer. In return for covering the training expenses, the employee is obliged to work for the employer for a certain period. In this way, the employer continues to benefit from the services of a more skilled employee and prevents the termination of the employment contract before the agreed period. The non-compete clause in employment contracts aims to ensure that the employee, whether during or after the termination of the employment contract, does not engage in any competitive activities against the employer, either personally or on behalf of others, does not work for or partner with any competing entity, and does not assume any position that may place them in competition with the employer. If the employee violates the non-compete obligation, the employer who suffers damage may claim compensation for the loss. However, in order to hold the employee liable for such compensation, the employer must prove the damage incurred. On the other hand, a penalty clause related to the non-compete obligation allows the creditor party to demand the payment of the penalty without the need to prove the damage caused by the violation. In this way, the party responsible for proving the damage can protect their financial interest without fulfilling the burden of proof.
Within the scope of the employment contract, the parties may determine the penalty amount at their own discretion in accordance with Article 182 of the Turkish Code of Obligations No. 6098 and the principle of contractual freedom regarding penalties. However, in any case, the penalty amount determined by the parties must be reasonable and must not involve impossibility of performance. In the event of a dispute, the judge has the authority to reduce a penalty deemed excessive. When making a reduction in the penalty amount, factors such as the creditor's interest, the fault of the party obliged to pay the penalty in the specific case, and the severity of the breach that led to the imposition of the penalty are evaluated on a case-by-case basis.
Considering all these aspects, it is evident that the current Labor Law No. 4857 does not include specific provisions regarding penalty clauses in employment contracts; therefore, the existing knowledge and legal opinions on the matter have been shaped through Supreme Court decisions and judicial precedents. It is observed that no definitive conclusions have been reached on some issues related to disputes that have arisen or may arise between the employee and employer, and that each dispute must be evaluated on a case-by-case basis. Consequently, it is clear that particular attention should be paid to these matters when including penalty clauses in employment contracts to prevent either party from being disadvantaged and to ensure the protection of their interests.
REFERENCES Soyer, M. Polat; “Hizmet Akdinin İşçi Tarafından Feshi İçin Öngörülen Cezai Şartın Geçerliliği Sorunu” Karakurt, Barış “İş Akdinin Fesih Hakkının Sözleşmeler Sınırlandırılması Ve Cezai Şart“ , Republic of Turkey Başkent University Institute of Social Sciences , Private Law Department, Graduate Program with Thesis, Master’s Thesis, Ankara, 2019 Eren, Fikret; “Borçlar Hukuku Genel Hükümler” Oğuzman/ Öz “Borçlar Hukuku Genel Hükümler” Bulut, Nazlı “İş Hukukunda Cezai Şart” Gazi University, Institute Social Sciences Private Law Department, Labor and Social Security Law Discipline, Master’s Thesis, Ankara, 2010 Constitutional Court Decision, E. 2017/137, K. 2017/161, T. 05/01/2017 Supreme Court 9th Civil Chamber 2021/7222 E. , 2021/11608 K. Supreme Court 22nd Civil Chamber 2020/188 E. , 2020/4019 K. Supreme Court 9th Civil Chamber, 2016/16851 E., 2020/5336 K. Supreme Court 22nd Civil Chamber 2016/17071 E., 2019/21 K. Özdemir, Erdem “İş Hukukunda Cezai Şart” https://dergipark.org.tr/en/download/article-file/1863539 (Accessed: 05/03/2024) Coşan, Huriye “Rekabet Etme Yasağı Gecerlilik Sartları” www.universalhukuk.Com/Rekabet-Etme-Yasagi-Gecerlilik-Sartlari (Accessed: 05/03/2024) Dinç, Canan Gökçe “İş Hukukunda Rekabet Yasağı”, Republic of Turkey Marmara University, Institute of Social Sciences Department of Law, Private Law Branch, Master's Thesis, İstanbul, 2011 Yayvak Namlı, İrem “İş Hukuku’nda Cezai Şart”, Republic of Turkey İstanbul University Institute of Social Sciences, Department of Private Law, Doctoral Thesis, İstanbul, 2019
I. INTRODUCTION
The penalty clause, which has a wide application area, is regulated under the Turkish Code of Obligations No. 6098. Although it is not included in the scope of the Labor Law No. 4857, the penalty clause holds significant importance within the context of employer-employee relationships and employment contracts, especially for parties wishing to protect their interests. The most important feature of the penalty clause is that the creditor does not bear the burden of proving that they have suffered damage; instead, they are entitled to monetary compensation in cases where the debtor fails to perform the obligation, or does not perform it properly.
The main purpose of including penalty clause provisions in employment contracts is not only to ensure that the parties fulfill their obligations as stipulated by the contract but also to prevent parties from unfairly and untimely terminating the contract. In practice, it serves to protect the employer who has covered training expenses during the employee's tenure and seeks to recover the loss related to those expenses. Additionally, in cases of breach of non-compete agreements, the penalty clause allows the employer to seek compensation for damages without the need to prove that actual damages have occurred. In practice, various disputes arise between the parties regarding the penalty clause in employment contracts for different reasons. In this article, the legal nature of the penalty clause in employment contracts, along with its validity requirements, types, amounts, and the penalty clause within the framework of non-compete agreements, will be examined.
II. EMPLOYMENT CONTRACT AND THE LEGAL NATURE OF THE PENALTY CLAUSE
The employment contract is defined in Article 8 of the Turkish Labor Code No. 4857 as: "An employment contract is a contract in which one party (the employee) undertakes to work dependently, and the other party (the employer) undertakes to pay wages." It is a type of contract established between the employee and the employer, specifying the terms, obligations, and nature of the work; it imposes an obligation on the employee to perform work and on the employer to pay wages for the work performed. Although the penalty clause is not included in the Turkish Labor Code No. 4857, it is explained in Article 179 of the Turkish Code of Obligations No. 6098 as follows: "If a penalty is agreed upon for the non-performance or improper performance of a contract, unless otherwise agreed in the contract, the creditor may request the performance of either the debt or the penalty." A penalty clause is a type of financial obligation imposed on the debtor party who fails to fulfill the contractual obligation either partially or completely, without requiring the creditor to prove any damage. Thus, it can be said that the penalty clause found in employment contracts is included in the relevant contract to secure the parties' obligations concerning various matters, including termination, training expenses, and non-compete clauses. As mentioned above, although the Turkish Labor Code No. 4857 does not contain a provision on the penalty clause, it is frequently included in employment contracts in practice, and disputes between the parties regarding this matter are commonly observed.
A. VALIDITY ELEMENTS OF PENALTY CLAUSES IN EMPLOYMENT CONTRACTS
Although the penalty clause institution is included in the Turkish Civil Code No. 6098, detailed and comprehensive legal evaluations regarding penalty clauses in employment contracts have been shaped by case law, court decisions, and specific dispute cases.
1. Validity of the Contract In employment contracts, the penalty clause arises when the parties fail to fulfill their obligations under the main contract, either partially or fully. However, if the employment contract, which is considered the main contract, is deemed invalid under the Turkish Labor Law (Law No. 4857), the penalty clause will also be considered invalid, and the parties will not be able to make claims based on that clause. The penalty clause is considered a subsidiary of the main contract. Similarly, due to its subsidiary nature, if the underlying obligation has expired or the obligation in the main contract changes, and if the obligation cannot be performed, the penalty clause related to it cannot be claimed either.
2. The Penalty Clause as a Different Obligation from the Main Contractual Duty
The penalty clause, which should have an economic value separate from the obligations imposed on the parties in the main contract, must have an independent appearance and material value from the primary obligation.
3. Fairness of the Penalty Clause When considering the parties to an employment contract as the employee and the employer, and adding the principle of interpreting in favor of the employee, one of the primary requirements is that the penalty clause must be fair. The concept of fairness is a general principle of law and is also taken into account in constitutional jurisprudence. It means that the judge must use this principle while considering the specific characteristics of the case and ensuring that justice is served. Although the principle of freedom of contract means that the parties are not restricted in their will when establishing a penalty clause, they must still adhere to fairness standards.
4. Penalty Clause Must Not Contradict the Law, Morality, and Personal Rights, or Be Impossible As with all contracts, regardless of their type and purpose, it is required that the provision regarding the penalty clause is not in violation of the law, morality, and personal rights. Additionally, the performance of the obligation related to the penalty clause must not be impossible. This issue is clearly addressed in Article 27 of the Turkish Code of Obligations No. 6098, which states: "Contracts that are contrary to the mandatory provisions of the law, morality, public order, or personal rights, or whose subject matter is impossible, are void. The invalidity of some provisions of the contract does not affect the validity of the others. However, if it is clear that the contract would not have been made without these provisions, the entire contract shall be void." If the penalty clause is in violation of the law, morality, personal rights, or is impossible, the relevant provision will be directly deemed invalid, and the penalty clause cannot be claimed from the concerned party.
5. The Requirement for the Penalty Clause to Contain Reciprocity The penalty clause in an employment contract must contain the element of reciprocity. According to the principle of reciprocity, a penalty clause imposed only on the employee is considered invalid. This issue is frequently addressed in Supreme Court decisions, and Article 420 of the Turkish Code of Obligations No. 6098 states: "A penalty clause imposed solely against the employee in service contracts is invalid." In this regard, the penalty clause in employment contracts should either be imposed for the benefit of both parties according to the principle of reciprocity or, in accordance with the principle of interpretation in favor of the employee, only for the benefit of the employee.
B. TYPES OF PENALTY CLAUSES IN EMPLOYMENT CONTRACTS
1. Penalty Clause Regarding Termination of the Contract If the parties wish to include a penalty clause regarding termination in an employment contract, they can only do so in fixed-term employment contracts. Penalty clauses related to the termination of indefinite-term employment contracts are considered invalid. This is because the purpose of the penalty clause related to termination is to prevent the termination of the contract without just cause before the agreed working period or the duration of the contract. Therefore, if the contract is terminated without just cause before the specified term, the party terminating the contract will be required to pay the penalty. Although Article 182 of the Turkish Code of Obligations states, "The parties may freely determine the amount of the penalty," the amount should still be set in accordance with the principle of fairness.
2. Penalty Clause Regarding Training Costs Another type of dispute related to penalty clauses encountered in practice arises in the context of penalty provisions regarding training costs. Upon the employer’s desire for a more qualified and skilled employee, and with the aim of gaining an advantage in the industry, the employer often provides various trainings to the employee, mostly related to the job field they are in. The costs of these trainings are typically covered by the employer. In return for the investment in both qualifications and knowledge, the employee is expected to work for the employer within the time period determined by both parties, in exchange for bearing the training expenses.
In this way, since the employer has covered the training expenses and can now benefit from a more qualified and knowledgeable employee, the employee is expected to work for the employer during the specified period. A penalty clause is established to prevent the employee from terminating the contract before the agreed work period ends. It is essential that the amount of this penalty clause is determined according to fairness criteria; the penalty amount should be proportional to the commitment period and the training expenses. If the employee does not work for the employer for the entire specified period, the penalty amount will be calculated by deducting the time worked from the total amount. When determining the validity of penalty clauses regarding training expenses, the Court of Cassation looks for proportionality between the "training provided to the employee" and the "amount the employee must pay." The employee is not required to pay the penalty if they have worked for the entire specified period or if they have terminated the employment contract for justifiable reasons.
3. Penalty Clause Regarding Non-Compete Obligation Another area where penalty clauses appear in employment contracts is related to non-compete obligations. The non-compete clause is regulated under Article 396 of the Turkish Code of Obligations: "During the term of the employment relationship, the employee may not, contrary to the duty of loyalty, provide services to a third party for remuneration or engage in competition with their employer, particularly in their own business. The employee may not use or disclose to others the information learned during the course of their work, especially production and business secrets, for their own benefit during the continuation of the employment relationship. To the extent necessary for the protection of the employer's legitimate interests, the employee is also obliged to keep such secrets after the termination of the employment relationship." Additionally, according to Article 444 of the Turkish Code of Obligations: "An employee with legal capacity may undertake in writing not to compete with the employer in any way after the termination of the contract, particularly by establishing a competing enterprise on their own behalf, working in another competing enterprise, or entering into any other type of beneficial relationship with a competing enterprise." In this context, during or after the employment relationship, the employee is prohibited from engaging in any business that would compete with the employer, working for or partnering with another competing organization, or assuming any position that might place them in competition with the employer. If the employee breaches the non-compete obligation during or after the employment relationship, causing damage to the employer, they are obliged to compensate for the loss. However, as the employer must prove the damage suffered, employers often include penalty clauses related to the non-compete obligation within the employment contract. This way, the employer can secure their interests under the penalty clause without the burden of proving the loss caused by the employee’s breach of the non-compete obligation.
III. AMOUNT OF PENALTY CLAUSE AND THE JUDGE'S POWER TO REDUCE Article 182 of the Turkish Code of Obligations No. 6098 states that "The parties may freely determine the amount of the penalty." In line with this provision and the principle of freedom of contract, the parties are entitled to set the penalty amount at their own discretion. Although the parties are granted the right to determine the amount of the penalty clause, it must comply with the principle of fairness, as emphasized under the heading of the validity conditions of the penalty clause. Pursuant to Article 161/3 of the Turkish Code of Obligations No. 6098, the judge has the authority to reduce the penalty amount if deemed excessive. However, it is essential that the fairness criterion to be applied by both the judge and the contracting parties be evaluated in light of the specific circumstances of each case. When examining the amount of the penalty clause, the judge considers several factors, including the interest of the creditor, the fault of the liable party in the particular case, and the severity of the breach that triggered the penalty obligation. For instance, when determining the amount of a penalty clause related to training expenses as opposed to one concerning a non-compete obligation, naturally, different criteria and financial conditions are taken into account. The judge evaluates the damage suffered by the party whose interest has been compromised, as well as the economic circumstances of the parties involved.
IV. CONCLUSION An employment contract, as regulated under Article 8 of the Turkish Labor Law No. 4857, is a type of contract that governs the employment relationship between the employee and the employer, outlining the conditions, obligations, and the nature of the work. It imposes the obligation on the employee to perform work and on the employer to pay wages in return for the performed work. The penalty clause, on the other hand, is regulated under the Turkish Code of Obligations No. 6098 and constitutes a financial obligation imposed on the debtor who fails to fulfill or properly perform the obligation stipulated in the contract, without the need for the creditor to prove any damage. The primary purpose of penalty clauses included in employment contracts is to protect the parties' interests arising from the contract.
One of the most frequently encountered penalty clauses in employment contracts in practice is related to termination. The termination penalty clause, which can be included in fixed-term employment contracts, aims to prevent the premature termination of the contract without just cause before the end of the agreed working period. The party who terminates the contract without providing a justified reason before the specified period in the employment contract must pay the stipulated penalty. Employers may provide domestic or international training to their employees to ensure that the work is performed by more efficient and qualified personnel. The costs of such training are covered by the employer. In return for covering the training expenses, the employee is obliged to work for the employer for a certain period. In this way, the employer continues to benefit from the services of a more skilled employee and prevents the termination of the employment contract before the agreed period. The non-compete clause in employment contracts aims to ensure that the employee, whether during or after the termination of the employment contract, does not engage in any competitive activities against the employer, either personally or on behalf of others, does not work for or partner with any competing entity, and does not assume any position that may place them in competition with the employer. If the employee violates the non-compete obligation, the employer who suffers damage may claim compensation for the loss. However, in order to hold the employee liable for such compensation, the employer must prove the damage incurred. On the other hand, a penalty clause related to the non-compete obligation allows the creditor party to demand the payment of the penalty without the need to prove the damage caused by the violation. In this way, the party responsible for proving the damage can protect their financial interest without fulfilling the burden of proof.
Within the scope of the employment contract, the parties may determine the penalty amount at their own discretion in accordance with Article 182 of the Turkish Code of Obligations No. 6098 and the principle of contractual freedom regarding penalties. However, in any case, the penalty amount determined by the parties must be reasonable and must not involve impossibility of performance. In the event of a dispute, the judge has the authority to reduce a penalty deemed excessive. When making a reduction in the penalty amount, factors such as the creditor's interest, the fault of the party obliged to pay the penalty in the specific case, and the severity of the breach that led to the imposition of the penalty are evaluated on a case-by-case basis.
Considering all these aspects, it is evident that the current Labor Law No. 4857 does not include specific provisions regarding penalty clauses in employment contracts; therefore, the existing knowledge and legal opinions on the matter have been shaped through Supreme Court decisions and judicial precedents. It is observed that no definitive conclusions have been reached on some issues related to disputes that have arisen or may arise between the employee and employer, and that each dispute must be evaluated on a case-by-case basis. Consequently, it is clear that particular attention should be paid to these matters when including penalty clauses in employment contracts to prevent either party from being disadvantaged and to ensure the protection of their interests.
REFERENCES Soyer, M. Polat; “Hizmet Akdinin İşçi Tarafından Feshi İçin Öngörülen Cezai Şartın Geçerliliği Sorunu” Karakurt, Barış “İş Akdinin Fesih Hakkının Sözleşmeler Sınırlandırılması Ve Cezai Şart“ , Republic of Turkey Başkent University Institute of Social Sciences , Private Law Department, Graduate Program with Thesis, Master’s Thesis, Ankara, 2019 Eren, Fikret; “Borçlar Hukuku Genel Hükümler” Oğuzman/ Öz “Borçlar Hukuku Genel Hükümler” Bulut, Nazlı “İş Hukukunda Cezai Şart” Gazi University, Institute Social Sciences Private Law Department, Labor and Social Security Law Discipline, Master’s Thesis, Ankara, 2010 Constitutional Court Decision, E. 2017/137, K. 2017/161, T. 05/01/2017 Supreme Court 9th Civil Chamber 2021/7222 E. , 2021/11608 K. Supreme Court 22nd Civil Chamber 2020/188 E. , 2020/4019 K. Supreme Court 9th Civil Chamber, 2016/16851 E., 2020/5336 K. Supreme Court 22nd Civil Chamber 2016/17071 E., 2019/21 K. Özdemir, Erdem “İş Hukukunda Cezai Şart” https://dergipark.org.tr/en/download/article-file/1863539 (Accessed: 05/03/2024) Coşan, Huriye “Rekabet Etme Yasağı Gecerlilik Sartları” www.universalhukuk.Com/Rekabet-Etme-Yasagi-Gecerlilik-Sartlari (Accessed: 05/03/2024) Dinç, Canan Gökçe “İş Hukukunda Rekabet Yasağı”, Republic of Turkey Marmara University, Institute of Social Sciences Department of Law, Private Law Branch, Master's Thesis, İstanbul, 2011 Yayvak Namlı, İrem “İş Hukuku’nda Cezai Şart”, Republic of Turkey İstanbul University Institute of Social Sciences, Department of Private Law, Doctoral Thesis, İstanbul, 2019
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