CORRUPTION AND RELEVANT FRAMEWORK UNDER TURKISH LAW

Definition of Corruption

Corruption has no specific definition under Turkish law. Corruption comprises specific crimes such as embezzlement, malversation, bribery, misconduct, bid-rigging and manipulation of tender contracts, money laundering, fraud, fraudulent bankruptcy, insider trading, terrorism financing and forgery.

International Legal Framework

Turkey is a party to the following conventions:

  • the United Nations Convention against Corruption, ratified in 2006;
  • the United Nations Convention against Transnational Organized Crime ratified in 2003;
  • the European Convention on Mutual Assistance in Criminal Matters ratified in 1969;
  • the Convention on the Transfer of Sentenced Persons ratified in 1987;
  • the Council of Europe Civil and Criminal Law Conventions on Corruption, ratified in 2001;
  • the European Convention on the International Validity of Criminal Judgments ratified in 1978;
  • the Council of Europe’s Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, ratified in 2004;
  • the European Convention on the Suppression of Terrorism ratified in 1981;
  • the European Convention on the Transfer of Proceedings in Criminal Matters ratified in 1978;
  • the European Agreement on the Transmission of Applications for Legal Aid ratified in 1983; and
  • the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, ratified in 2000.

Turkey is a member of the following groups:

  • the Group of States against Corruption, member since 2004; and
  • the Financial Action Task Force, member since 1991.
  • Egmont Group, as a financial Intelligence Unit, member since 1998.

In addition to the above list, Turkey signed bilateral agreements on cooperation regarding criminal matters with countries such as: Albania; Algeria; Belarus; Bosnia Herzegovina; Brazil; China; Egypt; Georgia; India; Iran; Iraq; Italy; Jordan; Kazakhstan; Kosovo; Kuwait; Kyrgyzstan; Macedonia; Moldova; Mongolia; Morocco; Oman; Pakistan; Poland; Turkish Republic of Northern Cyprus; Romania; Serbia; Syria; Tajikistan; Tunisia; Turkmenistan; USA; and Uzbekistan.

National Legal Framework

Relevant national legislation includes:

  • Turkish Penal Code numbered 5237 (the “TPC)
  • Criminal Procedure Code numbered 5271 (the “CPC”)
  • Misdemeanors Law numbered 5326
  • Banking Law numbered 5411 (“Banking Law”)
  • Code on Asset Declaration and Fighting Against Bribery and Corruption numbered 3628
  • Regulation on Asset Declaration numbered 90/748
  • Code on Public Officials numbered 657
  • Code on Public Tenders numbered 4734
  • Code on the Prevention of Laundering of Crime Revenues numbered 5549 (the “CPL”)
  • Code on Establishment of the Public Officials Ethics Board and Amendments to Some Laws numbered 5176
  • Regulation on Ethical Behavior Principles of Public Officials
  • Code on Prevention of Terrorism Financing numbered 6415
  • Regulation on Program of Compliance with Obligations Regarding Prevention of Laundering of Crime Revenues and Terrorism Financing
  • Capital Markets Law numbered 6362 (the “CML”)
  • Anti-Smuggling Law numbered 5607 (“Anti-Smuggling Law”)
  • Code on Independent Accountant Financial Advisers and Certified Public Accountants numbered 3568
  • Turkish Commercial Code numbered 6102 (the “TCC”)
  • Turkish Code of Obligations numbered 6098 (the “TCO”)
  • General Communiqué for Reporting Suspicious Transactions Regarding Terrorist Financing
  • General Communiqués numbered 5, 7, 8 and 13 of the Financial Crimes Investigation Board (MASAK); and
  • Communiqué on Tax Procedure Law numbered 529

Bribery & Foreign Bribery

Bribery is defined as granting, directly or through intermediaries, an undue advantage to a public official or to another person addressed by the public official in order to prompt him to perform or not to perform a task with regards to his duty (Article 252 of the TPC). The person receiving a bribe and also the person giving a bribe are held responsible. The offence is committed when the parties agree upon a bribe.

Although bribery in the extent of private-to-private relations is not regulated under Turkish law, engaging in bribery of persons who are representatives of below listed legal entities is also criminalized:

  • Companies with a public entity status
  • Companies established with the partnership of public entities or the professional organizations which have public entity status
  • Foundations operating within public entities or the professional organizations having a public entity status
  • Public benefit associations
  • Cooperatives

Bribery attracts sanctions of between four- and 12-years’ imprisonment, subject to aggravating and mitigating circumstances.

Article 252/9 of the TPC criminalizes the bribery of foreign public officials as regards to Turkey’s commitments to illegalize foreign bribery in international treaties. Those persons listed below would be considered as foreign public officials and would be charged with the same penalties as provided for bribery under Turkish law:

  • Public officials elected or appointed in a foreign country
  • Judges, jury members or other officials acting in international or transnational or foreign state courts
  • Members of international or transnational parliament
  • Persons performing public activities for a foreign country, including public institutions or public corporations
  • Citizens or foreign arbitrators appointed within the framework of arbitration procedure applied for solution of a legal dispute
  • Officials or representatives of international or supranational organizations established based on an international agreement

INTERNAL INVESTIGATIONS  

Legal Requirements to Initiate Internal Investigations

 Under Turkish law, there is no specific legal requirement to conduct an internal investigation or submit the findings thereof to the relevant authorities that is imposed on legal entities. Nevertheless, there are certain requirements and obligations stipulated under various laws and regulations which have to be regarded to assess the legal entities’ obligations to identify misconduct.

The right and obligation to manage and the authority to represent are granted to the board of directors (“BoD”) in joint stock companies under article 365 of the TCC. As a general rule, the BoD is authorized to take decisions regarding all actions and transactions in order to conduct business of the company except for matters reserved to the General Assembly in accordance with the relevant provisions of the TCC and articles of association of company.

Management of the company both constitute a right and an obligation for the BoD members and failure to fulfill such obligations give rise to the liability of the BoD members.

Pursuant to article 375 (1)(e) of the TCC, supervision obligation is one of the non-transferable duties and authorities of BoD members. The BoD members are obliged to oversee the conduct of business, compliance with law, agreements, articles of association provisions, internal directives, General Assembly and BoD resolutions and orders and company’s interests. Such supervision obligation is not transferable by delegation of authorities and no member shall be kept exempt from such obligation. Furthermore, article 369 (1) of the TCC states that BoD members must conduct their duties with diligence and care of a prudent manager and must pursue the company interests in accordance with the good faith principle.

Within this context, primary suspects of a crime committed on behalf of a company are generally BoD members in the eyes of public prosecutors.

With respect to crimes which can be committed deliberately (=willingly and knowingly), only BoD members who are aware of, but; tolerate this crime or who are directly involved into commissioning of this crime can be held criminally liable due to individual criminal personal liability set forth under the Constitution of the Republic of Turkey (“Constitution”) and TPC, as mentioned above. Corruption offences can only be committed deliberately, but not negligence. That also means that the said offences can be committed by dolus eventualis (olası kast) or legal intention. Intent in the form of dolus eventualis or legal intention, is deemed present when the perpetrator objectively foresees the possibility of his action’s consequences and persists regardless of the consequences as per article 21(2) of the TPC.

BoD members can avoid criminal liability for corruption offences by proving that that they have no knowledge or intention regarding commitment of such kind of crime and that company executives or employees who are reporting them committed this criminal offence by not obeying and/or acting contrary to their instructions. That being said, there are still certain criminal offences which might be committed by negligence. In other words, BoD members might also be held criminally liable for this kind of crimes due to breaching the supervision obligation and/or duty of diligence and care.

In particular, article 366 of the TCC sets out regulatory authority of the BoD to establish committees and commissions to detect any forthcoming risks in order to secure the improvement and continuity of the operations of the company. These committees and commissions may include the members of the BoD or third parties. Accordingly, an internal audit committee which is a direct obligation for companies whose shares are listed on the stock exchange, can be established in other companies. In practice, such regulatory obligations may motivate the BoD to conduct internal investigations to detect any misconduct, since they may be held liable for breach of their obligations otherwise.

Additionally, there are provisions stipulated under Employment Law numbered 4857 (“Employment Law”) concerning the conditions of the conduct of internal investigations. For instance, as per article 5 of the Employment Law, the employer must treat all employees equally and should not discriminate the employees based on their gender, race, color, language etc. Subsequently, if an internal investigation resulted in a termination violates the obligations set out in article 5, the terminated employee has the right to initiate a lawsuit for re-employment.

Please also refer to our explanations under the self-reporting requirements under Turkish law for further details.

Criminal Liability of Legal Persons

Under Turkish law, only real persons can be author of crimes and subject to criminal sanctions (Article 20 of the TPC). Hence, unlike some other jurisdictions, legal entities in Turkey cannot be held criminally liable. Therefore, if a real person commits a crime on behalf or in favor of a legal entity, the real person will be held personally liable.

However, legal entities are still subject to certain safety measures (Article 60 of the TPC).  Safety measures imposed on legal entities include seizure or cancellation of the proceeds of crime. Besides, in circumstances where any crime is commissioned in a corporate environment, the board members and directors of the company may be laid with charges or even be held criminally liable in cases where the crime is committed within the context of the company’s business or for the benefit of the company.

According to article 43/A of the Misdemeanor Law, in the case that a person who is an organ or representative or acts within the operation of the legal entity commits one of the following crimes for the benefit of the legal entity, a fine of up to TRY 74.303.910, which is calculated in accordance with the revaluation rate declared for 2021, will be imposed by the court on the legal entity for each crime listed below:

  • Fraud as defined in articles 157 and 158 of the TPC
  • Manipulating tenders as defined in article 235 of the TPC
  • Manipulating the performance of a deed as defined in article 236 of the TPC
  • Bribery as defined in article 252 of the TPC
  • Money laundering as defined in article 282 of the TPC
  • Embezzlement as defined in article 160 of the Banking Law
  • Smuggling as defined in the Anti-Smuggling Law
  • Financing terrorism as prescribed in article 3 of the Code on Prevention of Terrorism Financing numbered 6415

Legal Requirements to Self-Report to Judicial or Regulatory/Administrative Authorities

Under Turkish law, failure to report a crime that is still being commissioned or consequences of which continues is considered itself as a separate criminal offence set forth under article 278 of the TPC, which is sanctioned up to one-year imprisonment. The application of this provision is very rare, though, this provision always raises concern of the BoD and management in corporate settings and require legal assessment.

The CPL also sets out several obligations with regards to establishing training, internal audit, control and risk management systems and other measures to obliged parties (such as banks, financial institutions, companies operating in specific industries, etc.), and expects such parties to put into operation internal systems to detect and notify noncompliant transactions in a timely manner. According to article 4, if those who are deemed obliged parties under the CPL suspect that an asset subject to a transaction was obtained by illegal means or used for illegal purposes, they must report the transaction to the Financial Crimes Investigation Board (“MASAK”). According to article 28 of the CPL a Suspicious Transaction Report Form should be filled and submitted to the MASAK by obliged parties such as banks and financial institutions, to detect and report any suspicious transactions to MASAK, within 10 days of the suspicion arising. In addition, responsible institutions must notify MASAK when a transaction exceeds certain amounts prescribed by law. Pursuant to article 13 of the CPL, an administrative fine of 50,000 liras will be imposed on an obligor who violates the obligation to report. MASAK has the power to request and access all relevant information.

Furthermore, as per the Communiqué on Notification Obligation Regarding Insider Trading and Market Fraud, investment institutions subject to the CML has an obligation towards the Capital Markets Board if they come across a suspicion regarding insider trading or capital market fraud. This notification is made independent from the suspicious transaction notification to MASAK. Other than that, there is no specific requirement to force the companies to make any reporting to any judicial or governmental bodies.

Self-reporting can be considered as a possibility, like for instance in the case of any significant concerns around facing a potential criminal or administrative investigation. Nevertheless, it would be necessary to make detailed legal analysis of the circumstances each time such a possibility arises.

Furthermore, certain public disclosure requirements apply for publicly held companies, as provided under the CML. Although it does not bring forward any reporting requirement to any judicial or governmental authority, it is obvious that above a certain materiality threshold, the BoD and management of a publicly held company will be under the obligation to disclose the consequences of any material incident in such respective company.

Benefits that could be derived from self-reporting

Reducing sentence is possible if it is foreseen in related provisions. Additionally, repentance is possible for money laundering, embezzlement and bribery which revoke punishment in case of reporting the crime before investigation process. Article 254 of the TPC provides for the following safe harbors and exemptions:

  • No punishment is imposed if a person taking bribe delivers the subject of bribery exactly as it is to the relevant bodies before the commencement of investigation. No punishment is imposed if the public officer who agrees to receive a bribe notifies the relevant bodies about this fact before the commencement of investigation.
  • No punishment is imposed if a person offering a bribe to a public officer notifies the relevant authorities about this fact before the commencement of investigation.
  • No punishment is imposed on a person complicit in bribery if the person notifies the relevant bodies and shows sincere repentance about this fact before the commencement of investigation.
  • These are not applicable with regards to foreign bribery.

Plea bargaining is not covered under Turkish law. However, Turkey has adopted expedited trial procedure which can be applied at the end of the investigation phase. This procedure allows penalty reduction if suspect agrees to settle the dispute with the public prosecutor. (Article 250 of the TPC)

Mediation is available as an alternative resolution method for certain crimes. As per article 253 of the TPC, (i) the crimes investigation and trial of which depends on the complaint, (ii) provided that the victim or the person injured by the crime is a natural or private legal entity, crimes requiring imprisonment or judicial fine with an upper limit not exceeding three years in terms of juvenile delinquents and the crimes listed under the article can be resolved by settlement, including:

  • Abuse of trust (Article 155 of the TPC)
  • Fraud (Article 157 of the TPC)

Also, the crimes that are explicitly allowed by other laws to be settled through settlement can be subject to resolution by settlement.

Fraud defined in Article 157 of the TPC is within the scope of crimes subject to mediation procedure. However, it is not applicable to other crimes such as bribery and embezzlement.

Although mediation is not available for crimes other than mentioned, in some cases it is possible to make a settlement with to authorities for fine reduction. Settlement for fine reduction before administrative bodies, e.g., Competition Board, Tax and Customs Offices, Consumer Board, Data Protection Authority, is possible.

Retaining External Counsel and Attorney-Client Privilege

Article 149 of the CPC specifically foresees the right to legal advice and privilege throughout all criminal procedures. It is stipulated in the article that the suspect or the defendant may receive legal support in all phases of investigation and trial, and the right of the legal counsel to be present during interrogation and taking testimony cannot be restricted. The suspect or the defendant is free to choose and authorize their legal counsel; however, in the event that the suspect or the defendant state that they are not able to do so, a legal counsel is appointed.  In article 150 of the CPC, conditions in which a counsel is compulsory are regulated. Accordingly, if the suspect or the defendant is a child, or disabled to an extent that would preclude the from defending themselves, a counsel is appointed for them without the need for prior request.

The scope and elements of attorney-client privilege are quite unspecified compared to the common law attorney-client privilege rules. Attorney-client privilege is regulated under the Attorneyship Law numbered 1136 (“Attorneyship Law”). Accordingly, as per article 36 of the Attorneyship Law, attorneys cannot disclose any document or information obtained while practicing their profession. There are also related provisions in the CPC, regulating the issues concerning attorney – client privilege and attorneys’ exemption from ordinary criminal investigation processes within these privileges.

As per the article 130 of the CPC, attorney offices and residences can only be searched by court warrant and with the participation of the registered bar association representative, under the supervision of the public prosecutor, regarding the event specified in the warrant. For a search is to be conducted in a law office, specific rules apply, such that a bar representative has to be present during all times of the search to take place in the attorney’s office. The attorneys working in that office, the president of the bar association, or the attorney representing the president of the bar association may assert that an item to be seized is subject to attorney – client privilege. In this situation, the item is placed inside a separate envelope or package to be stamped. If the courts determine, within 24 hours, that the item is subject to attorney – client privilege, the seized item is returned immediately to the attorney.

As per article 58 of the Attorneyship Law, an attorney cannot be searched except in the case of red handedness for a crime that falls within the jurisdiction of the high criminal court.

Furthermore, investigation against attorneys or those in the organs of the Union of Turkish Bar Associations or bar associations, for crimes arising from their duties or committed during their duty is carried out by the public prosecutor of the place where the crime was committed, upon the permission of the Republic of Turkey Ministry of Justice.

Turkish Competition Authority’s practice, the correspondence between attorneys and their clients is deemed to be a significant part of the right of defense. However, it is important to note that, in order to benefit from the privilege, the correspondence must be made between an independent external attorney and their client. As the above stated provisions does not make any distinctions between in-house and external counsels, it is ambiguous whether such privileges are provided for both. Nevertheless, under the current practice of Turkish Competition Authority, correspondence of the company with its in-house counsel attorney is not deemed to be privileged as per the relevant articles of Attorneyship Law and the CPC.

Whistleblower Protection

During the internal investigations an important place is attributed to whistleblowers due to their effectiveness and importance in detecting risks and irregularities. No specific whistleblower protection legislation exists in Turkey. However, certain provisions in various laws and sub-legislation applies to whistleblowing including those of:

  • Constitution
  • Turkish Civil Code, Law numbered 4721 (as amended)
  • TPC
  • TCO
  • Employment Law
  • Personal Data Protection Law numbered 6698 (“DPL”)
  • Witness Protection Law numbered 5726
  • Regulation on Deletion, Destruction and Anonymisation of Personal Data
  • CPC

In accordance with Article 18/3-c of the Employment Law, if an employee submits a complaint against his/her employer to administrative or legal authorities concerning his/her legal or contractual obligations, the employer cannot terminate the employment agreement of such employee. Even though this provision provides a protection for whistleblowers solely against their employers; employers must also provide protection for the whistleblowers against any kind of retaliation which may come from other employees and/or relevant parties.

Overall, Turkey has a plenty of development room for whistleblower protection and needs a single legal structure for this to ensure effective implementation, rather than a piecemeal approach.

Chapter 23 (Judiciary and Fundamental Rights) for Turkey’s accession to the EU requires Turkey to implement a whistleblower protection. In fact, the European Commission’s 2020 Turkey Progress Report emphasizes that Turkey’s “legal framework on whistleblower protection still needs to be aligned with the new EU acquis on this issue. Implementation of the Directive would also accelerate Turkey’s implementation process towards its commitments as regards whistleblower protection under the respective UN and OECD Conventions.

Legal Considerations on Evidence Gathering

Designing and conducting a lawful internal investigation is not only important to avoid any further legal risks and undesirable consequences, but it is also important to assert any claims based on the collected information during the internal investigations before judicial and administrative bodies, as the information collected without following certain legal procedures may risk not qualifying as evidence.

Article 38 of the Constitution guarantees the right to exclude unlawfully obtained evidence. Furthermore, a criminal offence can be proven with all kinds of evidence provided that evidence was gathered in accordance with law as per the article 217(2) of CPC. Therefore, evidence collection requires strict compliance with the applicable law. Otherwise, evidence that is collected in an unlawful manner will be dismissed by the Turkish courts.

Contradiction to law is defined by Constitutional Court as contradiction to all legal provision in force in Turkish legal system[1]. In this regard, an investigative finding can be construed as a legally proper evidence, in case;

  • the company is legally entitled to gather such finding,
  • the company complied with applicable laws while gathering such finding,
  • the finding is used/processed in accordance with applicable laws.

The collection method should be legally proper so that the findings can be deemed legally proper evidence. It also important to assess data protection aspects as electronic communications involves personal data.

As per article 419 of the TCO, the employer can use the personal information of the employees only to the extent required for the competency of the employee for the work or for the enforcement of the employment agreement. In this regard, from an employment law perspective it is possible for an employer to audit its employees’ computers and e-mail accounts allocated for performance of business operations, unless there is not an explicit provision set forth under employment agreements executed with employees stipulating otherwise.

Although from the perspective of the employment law and precedents, the electronic correspondences conducted via the work tools of the employees are considered to be the property of the employer, the content of such correspondences constitute personal data of the employees. In this regard, the DPL needs to be considered for processing of the findings derived from any monitoring activities in the course of internal investigation.

Employers’ right to monitor electronic communications of the employee is solely restricted with the corporate tools/devices given to employee by the employer such as; corporate e-mail account, company phones, company computers. However, employer cannot audit/monitor the correspondence made by the employee through his personal accounts. This issue is crucial for the legality and legitimacy of the monitoring. Monitoring of the personal accounts of the employee might cause violation of the privacy of the employee by the employer.

As per the DPL, processing means any activity carried out on personal data such as data collection, recording, use, storage, disclosure, destruction, transfer, profiling, grouping. Under article 5 of the DPL, personal data can be processed and transferred abroad by obtaining an explicit consent from the data subject. Data controller is obliged to process data in line with the principles set out in article 4 of the DPL which requires that data shall be (i) processed fairly and lawfully, (ii) accurate and up to date; (iii) processed for a specific, explicit, and legitimate purpose; (iv) relevant, adequate and not excessive; and (v) kept for a term that is necessary for the purpose.

The DPL stipulates the conditions for processing and cross-border transfer of personal data without obtaining explicit consent of data subject. In this regard, personal data can be transferred abroad without obtaining explicit consent of the data subject if one of the conditions stated under article 5(2) exists and the country that the personal data will be transferred to has an adequate level of protection. If the level of data protection in such country is not deemed to be adequate, then the data controllers in Turkey and abroad can provide an undertaking, warranting the delivery of an adequate level of protection, which can be approved by the Turkish Data Protection Board.

Based on Constitutional Court decision dated 17 September 2020 and numbered 2016/13010 (aligned with the Bărbulescu v. Romania decision which was delivered by the European Court of Human Rights in 2017) on surveillance of employee e-mails:

  • The employer must have a legitimate interest in monitoring communication by considering whether this interest can be pursued by only monitoring the flow of the communication or monitoring the content of the communication is compulsory,
  • The employees must be informed by the employer beforehand about the surveillance, its purposes, its legal grounds, its scope, its results and employees’ rights.
  • The intervention to the privacy of the employee must be eligible to accomplish the purpose of the surveillance,
  • The intervention must be compulsory for the purpose of the surveillance and the same results must be able to be accomplished by other means, which requires fewer personal data to be processed or require them to be processed less intensely,
  • The data to be collected must be limited by the purpose of the surveillance, no excessive data processing must take place,
  • The legitimate interest of the employer must be balanced with the employee’s fundamental rights and freedom.

Based on the Constitutional Court decisions and the DPL, the employer must inform the employee before the communication that their communication may be monitored, the surveillance must be required and proportionate, must comply with general principles under article 4 of the DPL and must be based on one of the legal bases prescribed under article 5/6 of the DPL, an assessment must be made for each individual case. If the same result can be achieved by processing less data, more intense data processing is regarded as unlawful therefore the employer must determine whether the same results can be achieved without monitoring the communication or at least the content of the communication. 

Conducting Interviews

There is no regulation under Turkish law which provides for principles to respected during an internal investigation interviews and protection to the whistleblowers. In the circumstances where the whistleblower is a current employee of the company, an evaluation is made under the employment relationship to determine the responsibilities and commitments of the employer towards the whistleblower. However, no provision regulates the position towards the former employees or third parties. Therefore, it is of essence that employers establish an effective and secured structure for whistleblowing. In particular, the employers must ensure that any kind of whistleblowing will be anonymous, the process will be kept confidential, and the whistleblower will be protected from any kind of retaliation. In this regard, the employers may consider setting up a hotline where the employees can submit their complaints anonymously.

During an internal investigation following a complaint submitted by the whistleblower, it is crucial to firstly interview the whistleblower and obtain detailed information on the complaints. However, the whistleblower should not be the only interviewee within such an investigation process. If there are other parties involved, such as an alleged fraudster, suppliers or witnesses, they should be separately interviewed in order to gather as much information and evidence as possible.

In order to ensure objectivity towards the interviewees and the allegations, the interviewer could be a professional who does not work for the employer. Therefore, external counsel, auditor or an investigator may conduct the interviews. Any external parties should be empowered in a legal manner as for the interviewees may refrain from sharing company information with unauthorized interviewers, aside from its legal implications. The number of interviewers may vary depending on the context of the investigation, the significance of the allegations and the demands of the employer. In general, two or three interviewers may be sufficient for an interview, as the interviewee may feel overwhelmed if there are more than three interviewers.

Even though it is preferred to have face-to-face interviews, some interviews may be required to be conducted remotely due to various reasons such a pandemic etc. In remote interviews, a secured platform is advised to be used to prevent any leak of information. It should be ensured that all participants took the measures to avoid any breach of confidentiality and third-party intervention.

It is also important to note that in case there is time differences between the participants’ locations, a reasonable time should be selected for all parties. Otherwise, very early or late interviews may be considered as excessive from an employment law perspective.  It is also important to note that in case there is time differences between the participants’ locations, a reasonable time should be selected for all parties. Otherwise, very early or late interviews may be considered as excessive from an employment law perspective and may violate the employee’s right to rest.

During the interviews, an accurate note or recording should be kept. At the end of the interviews, an objective report should be prepared.

Once the investigation is complete, a final report summarizing all evidence collected and procedure followed along with any red flags to be reported to the management. The BoD members should take into consideration those findings and take necessary measures or actions vis-à-vis the obligations and liability attributed to them, as provided above under Section 2.1.

Legal Considerations on Corrective Actions towards Employees

It is also essential to underline that assessing possible corrective actions and remediations having concluded the internal investigation. On the basis of the investigation findings, determining the remedial actions and remedies to be implemented should be determined prudently.

Corrective actions may also include disciplinary actions or dismissal of the alleged wrong-doers depending on the investigation findings. Disciplinary actions can be in the form of warning, reprimand, wage cut, change of job and workplace, temporary suspension from work. It should be noted that the acts that will require disciplinary actions and the sanctions to be applied to such acts should be stated clearly within the disciplinary regulations of the workplace. The application of such rules should be carried out in line with the provisions of the Employment Law, and the sanctions must be applied equally to all employees. Furthermore, the employer cannot impose a dismissal penalty for the same action following the disciplinary action applied as a result of the employee’s unlawful behavior, due to the fact that it would mean two separate punishments imposed on the same act (Non bis in idem).

Dismissals by the employers can be separated into two categories, namely (i) termination with a just cause and (ii) termination with a valid reason. If the employer terminates the employment agreement with just cause based on the limited reasons stated under article 25/II of the Employment Law (which are immoral acts and acts against goodwill) the employer will not be under the obligation to make severance or notice payments. It should be noted that breach of the employer’s trust, theft, disclosure of employer’s trade secrets are all among the reasons for termination with just cause. Termination with just cause must be performed within six business days after learning the facts, and in any event after one year following the commission of the act, has elapsed. The “one year” statutory limitation shall not be applicable, if the employee has extracted material gains from the act concerned.

If the employer cannot terminate the employment agreement with a just cause but also cannot keep employing the wrong-doer, the employer may terminate the employment agreement with a valid reason. In such a case, the employer must pay severance payment and abide by the notice periods. The employer is also under the obligation to obtain written defense of the employee prior to the termination.

If during termination no reason is mentioned or if the employee claims that the mentioned reason is not justifiable, the employee may initiate a re-employment lawsuit based on these claims by applying to the mediator within one month following the termination, and the employee must file the re-employment lawsuit with two weeks following the mediation meetings. In the event that the court accepts the employees claims for re-employment, the termination will be deemed invalid. In such case, the employee shall request from the employee his/her re-employment. Upon such request, the employer must re-employ the employee, and if not, the employer must pay compensation to the employee, ranging from four to eight months of the employee’s salary as employment security indemnification and an additional four months of the employee’s salary as the salary for the time passed during the trial. Such lawsuit may be initiated by the employees who have worked for more than six months, and if there are more than thirty employees in the workplace. In practice, if the same employer has several workplaces, the court may take the whole number of employees in all workplaces into consideration, even if they are working in a workplace in a separate location. Regarding employees who has other workplaces in foreign countries, the court may have a tendency to take number of employees in foreign countries into consideration.

Employer’s representatives who manage the complete enterprise and his/her assistants and the employer’s representatives who manage the complete enterprise and who are authorized to recruit and dismiss employees, may not initiate such re-employment lawsuit.


[1] Constitutional Court Decision numbered 1999/2 E. and 2001/2 E. and dated 21 June 2001.