REDUCTION OF PENAL CLAUSE IN LABOUR LAW
(Y9HD-K.2021/6992)
In the event that the claimant chooses to be awarded the penal clause agreed in the labour contract between the parties, it should also be determined whether the penal clause should be reduced.
The penalty clause is defined in the doctrine as a separate performance having a financial value to be paid in case of non-performance or incomplete performance of the existing obligation (…: Penalty Clause in Turkish Law, … 1963)
The penal clause is regulated between Articles 179-182 of the Turkish Code of Obligations numbered 6098, and there is no provision on the subject in the Labour Laws. Although the said provisions of the Turkish Code of Obligations are applied in terms of labour law, our Chamber has produced solutions specific to labour law in some aspects. As a result of the ‘Principle of Interpretation for the Benefit of the Worker’ in labour law, penal clauses that stipulate obligations only against the employee are deemed invalid and the established case law in this direction has been adopted in the doctrine. While there is no explicit provision in the Law No. 818 regarding the penalty clause in terms of service contracts, in parallel with the practice of our Chamber; Article 420 of the Turkish Code of Obligations No. 6098, which entered into force on 1 July 2012, stipulates that ‘The penalty clause imposed in service contracts only against the employee is invalid. In this respect, penal clauses placed against the employee in the service contracts should be considered invalid, and penal clauses placed in favour of the employee should be considered valid.
The necessity of the penal clause to be regulated bilaterally against the employee and the employer also reveals that the penal clause agreed against the employee should not be more than the one agreed against the employer. In other words, it is unthinkable that the penal clause determined against the employee exceeds the responsibility of the employer in terms of its conditions and the amount of the penalty. In the event of an inequality against the employee in the bilateral penalty clause, although the penalty clause is not completely invalid, the liability of the employee cannot exceed the amount and conditions for which the employer is responsible.
The penalty clause, which is agreed on the condition that the employee works for a certain period of time in return for the training given to the employee, cannot be considered as unilateral. The provision of penal clause in return for training is valid within the specified limits, as long as the penal clause is equivalent to the cost of the training provided to the employee.
In both definite and indefinite labour contracts, provisions containing penal clauses are valid as a rule, provided that the principle of reciprocity exists. However, in order for the penal clause to be valid, the labour contract between the parties must be for a definite term. In terms of this rule, with the decision of the General Assembly of the Unification of Jurisprudence of the Court of Cassation dated 08.03.2019 and numbered 2017/10 main 2019/1 decision, it was ruled that ‘the penal clause clause depending on the unfair termination before the expiry of the term is valid’ in the employment contract, which was made for a definite term but was accepted as an indefinite term because it did not meet the objective conditions, and the fact that the contract is for a definite or indefinite term no longer has any effect on the validity of the penal clause.
Paragraph 1 of Article 182 of the Turkish Code of Obligations No. 6098 reads as follows: ‘The parties may freely determine the amount of the penalty.’ and the last paragraph reads as follows: ‘The judge shall automatically reduce the penalty clause that he deems excessive.’
Article 3 of the Turkish Commercial Code No. 6102 stipulates that all transactions and acts concerning a commercial enterprise and the matters regulated in the Commercial Code shall be deemed as ‘commercial business’. The relationship between the employer and the employee is not a commercial business as defined in Article 3 of the Turkish Commercial Code, but a unique employment contract arising from the Labour Law No. 4857 and subject to the provisions of the Labour Law and within this framework. In addition to the fact that the employee-employer relationship is related to public order, the principle of ‘keeping the parties balanced’, which is one of the basic principles of labour law, confirms this acceptance. Therefore, it is very clear that the penal clause stipulated in the contract does not arise from a commercial relationship in the sense stipulated by the provisions of the Turkish Commercial Code. As such, it is not possible to apply Article 22 of the Turkish Commercial Code, which states that ‘the debtor, who has the title of merchant, cannot request the reduction of the contractual penalty by claiming that an excessive penalty has been agreed in the cases written in paragraph 3 of Article 182 of the Turkish Code of Obligations’, in the concrete dispute. As a matter of fact, in the decision of the General Assembly of Civil Chambers dated 15.10.1997 and numbered 1997/9-486,822, by emphasising the same principles, it has been accepted that being a merchant status does not require the application of the rule in Article 22 of the Turkish Commercial Code in terms of the penal clause in the employment contract. Accordingly, due to the mandatory regulation in the last paragraph of Article 182 of the Turkish Code of Obligations No. 6098 (Article 161/3 of the abrogated Code of Obligations No. 818), it should be accepted that the judge is obliged to reduce the penalty clause ex officio if he deems it excessive.
In this case, the judge, while making a decision based on the right of discretion, shall intervene in the contract and reduce the amount of the penalty if he sees that the amount of the penalty is unreasonably high, taking into account the economic situation of the parties, the interests of the creditor, the fault of the debtor, the gravity of the breach of debt, the type and duration of the contract. (…, op. cit., p. 1320)
In labour law practice, the importance of the issue increases one more time in terms of penal clause arrangements against the employee. Considering the relationship between the condition and the penalty, solutions that will not cause the economic ruin of the employee should be adopted. According to the established jurisprudence of our Chamber; the penalties, which are conditional on the employee working for a certain period of time, should be reduced by establishing a ratio according to the periods worked and required to work within the scope of the contract. However, it is not sufficient to make a discount only according to the duration ratio. ( See 3.3.2021, 2021/854 E, 2021/5458 K; 26.01.2021, 2019/6662 E, 2021/2385 K )
In the case; the duration of the plaintiff’s employment is 11 months and 22 days, and the period of non-employment is 108 months and 8 days since the contract is for 10 years. The penalty clause was agreed as 60 months. The penalty clause was calculated at the rate of 9/10 of 60 months by proportioning the worked period to the unworked period and a net 550.006,20 TL was judged without any discount. According to the way of acceptance; although no discount was made by the Court of First Instance and the Regional Court of Appeal, it is clear that the amount of the penalty clause is exorbitant and according to the practice of our Chamber, it is not sufficient to make only proportioning in determining the amount of the penalty clause, a discount should be made.
In this respect; in case the plaintiff chooses to take the penalty clause receivable under judgement, the amount of the penalty clause to be determined by making a discount in accordance with the last paragraph of Article 182 of the Turkish Code of Obligations No. 6098 (Article 161/3 of the Abrogated Code of Obligations No. 818), taking into account the periods that the plaintiff worked and should work, should be determined and a decision should be made according to the result to be formed. Without considering this issue, it is erroneous to decide the penalty clause only according to the proportioning.
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