Determining the Type of Termination in Reinstatement Lawsuits: The Current Approach of the Turkish Court of Cassation

Türeli & Ceylan Law Firm

In disputes arising from the termination of an employment contract by the employer, determining whether the termination was based on just cause or valid cause is of critical importance—not only for adjudicating reinstatement claims, but also for calculating the severance pay, notice compensation, and other entitlements due to the employee.

In this regard, the recent decision of the 9th Civil Chamber of the Court of Cassation dated 11 September 2023emphasizes the necessity of clearly specifying the type of termination in reinstatement lawsuits, thereby establishing a significant precedent.

Why Must the Type of Termination Be Determined?

In reinstatement lawsuits, whether the dismissal was based on a valid or justified ground may not always alter the outcome of the reinstatement claim. However, this distinction plays a crucial role in determining the employee’s entitlement to severance, notice pay, and other claims:

• If the termination is based on just cause, the employer is not obligated to pay compensation.
• If the termination is based merely on valid cause, even if reinstatement is denied, the employee may still be entitled to certain compensations.

Uncertainty and Diverging Judicial Practices

In practice, some courts clearly determine the type of termination, while others only focus on the reinstatement claim and refrain from making an explicit classification. Common examples of such ambiguous rulings include:

• “Although the termination was not based on just cause, there is at least valid cause.”
• “The type of termination should be determined in the subsequent compensation lawsuit.”
• “In light of the specific circumstances, the reinstatement claim should be rejected.”

Such vague expressions often lead to re-litigation of the termination grounds in follow-up lawsuits for receivables, resulting in unnecessary delays and legal uncertainty.

What Does the Court of Cassation Say? (E. 2023/14011, K. 2023/11613)

In its decision dated 11 September 2023, the 9th Civil Chamber of the Court of Cassation held that determining the exact type of termination is mandatory in reinstatement lawsuits, based on the following rationale:

• Every just cause also qualifies as a valid cause; however, not every valid cause constitutes a just cause.
• Leaving the assessment of just cause to a later stage undermines procedural economy.
• Unless there are pending criminal proceedings or similar circumstances that would impact the outcome, the court must determine the type of termination based on available evidence at the time of judgment.

Accordingly, first-instance courts must clearly state in their rulings whether the termination was based on just cause or valid cause.

Implications in the Appeal Process

This approach has also been embraced by the Regional Courts of Appeal. In practice, judgments that contain ambiguous wording regarding termination are often reversed on appeal and remanded to the first-instance court for clarification.

This contributes to:

• Avoiding contradictory judgments between reinstatement and compensation lawsuits
• Ensuring legal certainty and coherence throughout the judicial process

Impact on Compensation Claims

According to the Court of Cassation’s jurisprudence, the reasoning on the type of termination in a finalized reinstatement decision is binding in subsequent lawsuits for compensation. Therefore:

• If the court has ruled that the dismissal was based on a valid cause, the employer cannot later claim that it was for just cause in a compensation lawsuit.
• Conversely, if the termination is deemed to be based on just cause, the employee cannot claim severance or notice compensation.

Thus, clarity in the type of termination directly affects the employee’s right to compensation.

Recommendations from Türeli & Ceylan Law Firm

• Employers should carefully draft their termination notices and support them with sufficient documentation demonstrating just cause.
• Employees should analyze the content and legal basis of the dismissal before filing suit and develop a strategy accordingly.
• In reinstatement lawsuits, legal counsel should frame arguments and demands around the type of termination.
• To avoid unnecessary procedural disputes in subsequent lawsuits, courts should ensure that reinstatement decisions are well-reasoned and precise.

Determining the type of termination in reinstatement cases is vital not only for protecting the rights of the parties but also for ensuring the efficiency and predictability of Turkish labour litigation. The Court of Cassation’s ruling dated 11 September 2023 marks a pivotal point in clarifying the legal framework and strengthening procedural consistency.