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Employee Supply Contracts Within the Framework of Current Court Decisions

Temporary employment relationship; it is an assignment based on a tripartite relationship between the temporary employee, the essential employer and the other employer who has made a temporary employee contract with this employer. In this triple relationship, there is an employment contract between the employee and the essential employer, and a temporary employee supply contract exists between the essential employer and the employer who employs temporary employees. This contract also includes provisions regulating the nature, duration, salary and other rights and obligations of the temporary employee’s working.


Temporary employment relationship is regulated in Article 7 of the Labor Law and is among the atypical employment types. Pursuant to this article, “…Temporary employment relationship may be established through a private employment agency or by making an assignment within the body of the holding or at another workplace affiliated with the same group of companies…”. Private employment agencies are the offices established with the permission of the Turkish Employment Agency, in accordance with Article 3, subparagraph (j) of the Regulation on Private Employment Agencies, to mediate the placement of job seekers in jobs for which they are suitable or to carry out temporary employment relations. Employment intermediation consists of mediating the conclusion of an employment contract between the employee and the employer. The temporary employment relationship mentioned in the relevant provision is also referred to as "profession acquired temporary employment relationship" in the doctrine, and it is realized as the temporary supply of employees affiliated with private employment agencies to other employers in return for a certain service fee. In a profession acquired temporary employment relationship, the employer is a private employment agency. Therefore, the profession acquired temporary employment relationship is based on a triple relationship. The private employment agency is called the "employer", the employee transferred to another employer is called the "temporary employee", and the employer that employs the temporary employee is called the "temporary employer".


Activities of private employment agencies have been subjected to strict controls by the administration to ensure do not harm employees' rights and that there is no illegality within the scope of the tripartite relationship. Inspections of these institutions are regulated in Articles 29 and 30 of the Regulation on Private Employment Agencies. According to article 29, the inspection of the activities of private employment agencies and temporary employment relations is carried out by the labor inspectors of the Ministry of Labor and Social Security and sanctions are applied according to the their reports. In addition, administrative fines are imposed for the illegal activities of private employment agencies in accordance with the amounts and procedures specified in the 20th article of the Turkish Employment Agency Law and the relevant articles of the Labor Law.


The notion of collusion is originally defined in the Turkish Code of Obligations. Accordingly, collusion is an agreement made by the parties in a legal relationship to deceive third parties without complying with their real will. The parties do not want the agreement that they have established to have a judgment and result among themselves. As such, collusion is prohibited by Law and subject to certain sanctions. According to the 7th paragraph of the 2nd article the Labor Law, if there is a collusive subcontracting employment relationship, the employees will be counted as the employees of the essential employer from the beginning. As a matter of fact, the Supreme Court of Appeals, by awarding the decisions such as 9. HD., E. 2021/1687, K. 2021/5418, T. 3.3.2021; 9. HD., E. 2021/1691, K. 2021/5421, T. 3.3.2021 and 22. HD., E. 2017/22990, K. 2019/17134, T. 24.9.2019, in the concrete disputes, it first examined whether there was a collusive relationship between the parties and then emphasized when a contractual relationship would be collusive. The Supreme Court has ruled that the real employer must be determined in order to resolve the dispute in accordance with the legislation, and if there is a collusion, the employees in the concrete case will be counted as the employees of the essential employer from the beginning, within the 7. HD., E. 2013/2572, K. 2013/2349, T. 7.3.2013 and 9 .HD., E. 2009/19368, K.2010/11949, T. 3.05.2010 numbered decisions.


Temporary employment relationship practices have begun to be encountered frequently today. However, it is seen that the concept of employment, which does not legally include the elements of a temporary employment relationship, has started to be preferred by employers in working life. In this framework, the concept of employee procurement, which can be confused with the temporary employment relationship institution, is included in working life practices. The Supreme Court, primarily examined whether there was a collusion in the employee supply contracts and included in its decisions whether there was a collusive relationship between the essential employer and sub-employer. In order to avoid a collusive essential employer and sub-employer relationship, it has been examined whether there is a legal essential employer and sub-employer relationship between both employers. If there is no legal conditions in the current relationship regarding the subcontracting as per the Labor Law, it has been discussed whether the relationship is within the scope of temporary employment relationship or private employment agency's intermediary activity.


As a result of the aforementioned evaluations of the Supreme Court, it is understood that the recruitment of employees can only be carried out by private employment agencies that carry out intermediary activities, and the employer that the private employment office provides employees must be the real and registered employers of the employees in question. If there is a relationship within the scope of a temporary employment relationship, it is seen that the employer registered in the payrolls of the employees must be in the private employment agencies itself. According to the approach of the Supreme Court on this issue, if contractual relations regarding the supply of employees are subject to proceeding before the Courts, the collusive notion between essential employer and subcontractor and the activities of private employment agencies should be examined. In this framework, it is crucial to determine the real employer by evaluating whether there is a legal base in essential employer-subcontractor relationship and private employment agency activities. After the real employer and the collusive relationship are determined, the responsibilities of the employers towards the plaintiff employee are determined.


The following are the decisions of the Supreme Court in which the said evaluations are made:


  • In the decision of the 7.HD of the Supreme Court, numbered, E. 2013/2572, K. 2013/2349, T. 7.3.2013, the plaintiff briefly requested that he started to work as a warehouse personnel in K..+N.., that his employment contract was terminated by paying severance and notice payment, that the termination was invalid due to unjust termination and that he would be reemployed to work. The attorney of the defendant K..+N.. stated that the defendant company purchased services from the other defendant M.. Company, the plaintiff was working as a warehouse personnel in the defendant M.. Company, that the plaintiff was an employee of the other defendant company, and the case shall be dismissed due to hostility. The attorney of the defendant M.. stated that his client provides services to the other defendant K..+N.. but the workplace of the plaintiff is the other defendant company, and it is not possible to direct the hostility to the client company. The court, on the other hand, decided that the plaintiff's employment and termination proceedings were held by M.. and therefore the plaintiff is an employee of this company. In this case that came before the Supreme Court, the court emphasized that the contract between the defendants was for the supply of employees and was based on collusion, and that employee was assigned to the main job of K.. +N.. Company and should be returned to this company. Considering this decision, it is seen that the rule of accepting the employee as the employee of the essential employer from the beginning in a collusive relationship is applied to the concrete dispute. In addition to all these, in the continuation of the decision, the Court stated that in accordance with the honesty rule of the Company and the principle that no one can benefit from its own deception, it should be accepted that M.. Company is jointly and severally liable to the plaintiff together with the K.. +N.. Company.


  • In another decision of the 22.HD of the Supreme Court, numbered, E. 2013/37248, K. 2014/247, T. 16.1.2014, the attorney of the plaintiff claimed that the employment contract of the employee was terminated unlawfully and demanded from Court to decide the invalid termination and reemployment. Defendant P.. A. declared that he did not have any service contract with the plaintiff and the Defendant A.. declared that the plaintiff did not work within their company, since they are an intermediary institution in the nature of a private employment agency, they provided consultancy and payroll services to the other defendant. In the present case, Supreme Court examined whether there was a collusive relationship between the defendants and decided after that examination. Supreme Court accepted that there was a collusive relationship between the defendants and decided that the plaintiff would be returned to P.. and the defendants were jointly and severally liable in terms of financial liability. Again, as in the previous decision, Supreme Court considered the collusive relationship between the defendants in this present case in terms of the criteria that mentioned above.


  • Briefly in the decision of the 9. HD of the Supreme Court, numbered, E. 2016/22867, K. 2016/20939, T. 28.11.2016, the plaintiff requested the determination of the unfair termination of the employment contract and the decision to be reemployment. One of the defendant companies argued that the plaintiff employee was not a defendant bank employee. Defendant … Joint Stock Company, on the other hand, claimed that the other defendant was an intermediary institution in the nature of a private employment agency that provides employees and payroll services to companies and organizations that are looking for employees to be employed in their workplaces. As a matter of fact, in this concrete case, the Supreme Court firstly defined whether there was a collusive relationship between the defendants and made an assessment in terms of liability after determining who the real employer was. As a result, the Supreme Court determined that there was a collusive relationship between the defendants in the concrete dispute and decided that both defendants should be held responsible for the financial results together.


  • Finally, 22. HD of the Supreme Court, in a more recent decision, numbered, E. 2017/11245, K. 2018/5148, T. 27.2.2021,the plaintiff requested the determination of collusion and discrimination in the case and the provision of certain receivables. The defendant… Municipality stated that the relationship between them and the other defendant was not collusive. The other defendant … Joint Stock Company argued that there was a valid subcontractor-essential employer relationship between the other defendant. As in the other decisions given above, the Supreme Court examined whether there was a collusive relationship between the defendants. The Supreme Court found fault with the fact that the collusive relationship and the plaintiff were not determined to be an employee of the real employer from the beginning.

As can be seen above, the fact that employee supply contracts have been frequently encountered in practice and recently caused the legality of these contracts to be reflected in the decisions of the Supreme Court. In consequence, companies that want to establish a essential employer-subcontractor relationship or a temporary employment relationship should establish business relations in accordance with the Labor Law in order to avoid sanctions. Besides, private employment agencies are required to establish a business relationship only as an intermediary or profession acquired temporary employment relationship in accordance with the Labor Law and other legislation. It is essential for private employment agencies to establish a business relationship only as an intermediary or a profession acquired, and it is necessary to avoid business relationships that are contrary to the basic principles of Labor law, which are in the nature of hiring employees.


Author: Bilge Derinbay, Aysu Eren Yüce


Contact: bilge.derinbay@nsn-law.com