The Decision of the Constitutional Court on Overtime Pay and the Right to Property
With the Decision (“Decision”) dated 22.02.2022 and application numbered 2019/1450, published in the Official Gazette dated 05.04.2022 and numbered 31800, in the case of non-payment of overtime pay of an employee, the Turkish Constitutional Court has reached a conclusion according to whether the overtime has been worked in accordance with the legal regulations, that the right to property has been violated.
In this decision, The Turkish Constitutional Court (“Court”) has examined that overtime pay is within the scope of the right to property and has evaluated the necessity of obtaining approval from the employee regarding overtime working by the employer within the scope of both the Labor Law No. 4857 (“Law”) and the Regulation on Working Hours Regarding the Labor Law (“Regulation”).
In the concrete case, the employer; unilaterally terminated the employment agreement of the applicant, who is a private company employee, on the grounds that the applicant has committed acts that would disrupt the security and peace in the workplace and cause material damage, and paid the applicant’s severance pay, payment in lieu of notice and annual leave. Thereupon, the applicant filed a claim for compensation against the employer, claiming that severance pay, payment in lieu of notice, and annual leave receivables were paid incompletely and that the overtime pay was not paid at all.
The employment agreement between the employer and the applicant includes the following provision regarding overtime; “The employee agrees and undertakes to work overtime within legal limits if deemed necessary by the employer. The salary for this overtime is included in the employee’s actual salary.” The Court of First Instance ruled that the severance pay, payment in lieu of notice, annual leave receivable, and overtime pay, which were determined to be underpaid by the expert report, be paid to the applicant. In its justification, the Court of First Instance stated that the applicant was entitled to severance and payment in lieu of notice due to the unfair and undeclared termination of the employment agreement by the employer. At the same time, it stated that although it was indicated in the agreement between the parties that overtime pay is included in the actual salary, in accordance with the 7th paragraph of the 41st article of the Law and the 9th article of the Regulation, the employer must obtain the approval of the employee at the beginning of each year in order to have overtime worked. Thus, it drew attention to the fact that overtime working, which the applicant consented to under the agreement, was only valid for the first year, and concluded that the employer could not prove that it had received approval from the applicant in the following years.
The employer applied to appeal against this decision and stated that there is no provision in the legislation stating that the employee will be approved for overtime every year and that the consent given by the applicant in the employment agreement is valid throughout the entire working of the applicant. The Regional Court of Justice stated that the practice is to obtain approval from the employee for overtime working every year until 25.08.2017, but it pointed out that with the amendment made in the 2nd paragraph of the 9th article of the Regulation and entered into force on 25.08.2017, the requirement of obtaining approval at the beginning of each year was revoked, and the Court dismissed the case in terms of overtime pay. Therefore, the Regional Court of Justice stated that unless the applicant withdraws his approval in the agreement, it should be accepted that the annual overtime pay, which does not exceed 270 hours, is paid to the applicant, and the applicant shall not be entitled to overtime pay.
Following the decision of the Regional Court of Justice against the applicant, the applicant made an individual application to the Turkish Constitutional Court. In the applicant’s complaint, the applicant claimed that the Regional Court of Justice’s acceptance that there is no requirement to obtain approval at the beginning of each year based on the legislative provision that entered into force after the date of overtime, and based on this, the dismissal of the case regarding overtime pay is violated the principle of individualization of punishment, the right to an effective application, the right to a fair trial, the right to property and the right to legal remedy.
Since the basis of the applicant’s complaint was about the dismissal of the case for payment of overtime pay based on the legislative provision that entered into force after the incident, the Turkish Constitutional Court countenanced to examine the complaint within the scope of the right to property.
Within this scope, the Constitutional Court emphasized that it must be accepted that the applicant, who was determined by the judicial decision to have overtime, had a legitimate expectation that he would receive overtime pay in accordance with the Law. The Court stated that a legitimate expectation of obtaining an economic value or an enforceable claim in certain circumstances is within the scope of the right to property guarantee in the Constitution. Therefore, the Court stated that since the State has positive obligations regarding the protection of the right to property in this context, the necessary measures regarding the protection of the right to property must be taken by the State concerning with the overtime pay of the applicant and this must be protected by court decisions.
In this respect, upon the applicant’s complaint, the Constitutional Court firstly examined whether the evaluations of the courts of instance regarding the interpretation of the legislation contain serious mistakes that would violate the principles of certainty and predictability, undermine the rule of law, and cause an imbalance between the interests of the parties.
The Court stated that the approval requirement in the relevant Law and Regulation articles mentioned above is about whether the employer could force the employee to work outside the legal working hours and this does not mean waiving the right to demand overtime pay. It also stated that there is no regulation in the legislation stating that the approval of overtime working means that the overtime pay is waived. On the other hand, the Court indicated that the right to property guaranteed in article 35 of the Constitution does not prohibit the owner from waiving overtime pay as a rule, and thus, the Court also stated that not ruling on overtime pay in favor of the employee, since the employee accepts that the compensation for overtime working is included in his/her actual salary in the employment agreement, would not violate article 35 of the Constitution in principle. Therefore, the Court emphasized that the employee’s prior approval to overtime working does not mean that the employee has waived the overtime pay.
In line with the amendment made in the Regulation, considering the legislation before the date of 25.08.2017, the Court accepted that overtime working other than the first year constituted a violation of the mandatory provisions since the applicant’s approval was not obtained after the employment agreement, as it would be contrary to the mandatory rules of law for the employee to work overtime without his approval at the beginning of each year. Therefore, even if it is accepted that the applicant consented to overtime without demanding salary, it decided that overtime pay must be paid to the applicant since this approval did not include overtime working performed in violation of the mandatory provisions. In this regard, although the legislation that entered into force on 25.08.2017 considers the approval obtained at the signing of the employment agreement for overtime working sufficient, it does not make the overtime working legally valid in the past without obtaining approval at the beginning of each year. For this reason, it has been stated by the Court that the decision of the Regional Court of Justice was not predictable and did not take into account the fact that the waiver of rights arising from employment contrary to the mandatory provisions of Labor Law contradicted the public interest.
Within the framework of the above-mentioned issues, the Constitutional Court decided that the claim of the applicant regarding the violation of the right to property was acceptable in the concrete case, and that the right to property guaranteed in Article 35 of the Constitution was violated.
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