The Constitutional Court Annulled Article 27/1 of the Law on Private International Law and Procedural Law on Choice of Law in Employment Contracts
Following applications to the Constitutional Court by local courts and higher courts, claiming that Article 27, clause 1 and 2 of Law No. 5718 on Private International Law and Procedural Law (“PLCPL”) are unconstitutional in lawsuits arising from employment contracts, the Constitutional Court examined the applications and, in its decision numbered 2023/158 E. and 2024/187 K., found clause 1 of Article 27 of PLCPL to be unconstitutional under Article 49 of the Constitution, thus annulling it. However, it deemed clause 2 to be in accordance with the Constitution and rejected the annulment request. The annulment decision was published in the Official Gazette on March 10, 2025, and will come into effect after a six-month transition period, on September 10, 2025.
Annulled and Maintained Provisions
The annulled clause (1) of Article 27 of the PLCL stipulated that the law chosen by the parties would apply to employment contracts, but the minimum protection provided by the mandatory provisions of the law of the employee’s habitual place of work would be preserved. The Constitutional Court, considering the possibility that the freedom of choice of law may lead to unfavorable consequences for the employee, found this provision contrary to Article 49 of the Constitution and decided to annul it.
Clause (2), on the other hand, regulates that in employment contracts with a foreign element, if the parties have not made a choice of law, the law of the workplace where the employee habitually performs his/her work will be applied and the fact that the employee temporarily performs his/her work in another country will not make this workplace a habitual workplace. The Constitutional Court ruled that this regulation is within the scope of the discretionary power of the legislator and that the judge may act in accordance with law and equity in determining the law of the habitual workplace and that it is not contrary to the Constitution.
Grounds for the Annulment Decision
The Constitutional Court, by evaluating the limits of choice of law in employment contracts and the principle of employee protection in detail, based its decision to annul paragraph (1) of Article 27 of the PLCL on the following grounds:
1. The Risk of Preventing the Employee from Benefiting from the Law Providing Stronger Protection
The Constitutional Court identified the risk that if the law applicable to the employment contract is determined by the choice of the parties, the law to which the employment relationship is more closely bound may be excluded. In scenarios where there is no choice of law, it is possible that another law that may provide higher standards of protection for the employee may come into action, whereas the current regulation limits this possibility. This may lead to the elimination of legal safeguards that may be more advantageous for the worker.
2. Limitation of the Bargaining Power of the Employee
The Constitutional Court considered that the bargaining power of the employee against the employer is generally limited and that the employer is likely to choose a more advantageous law when choosing a law. The possibility of the employee being deprived of the protections provided by a law that is more closely related to the employment contract and provides him/her with higher protection has been one of the important grounds for the annulment decision.
3. Unpredictability of the Content of Foreign Law
The inability of employees to foresee the content of the foreign law and to determine whether the application of this law is in their favor may lead to a disadvantageous situation for the employee. The Constitutional Court emphasized that in a technical field such as labor law, even judges have difficulty in determining the content of the foreign law, and therefore it is almost impossible for employees to obtain sufficient information and foresee the possible consequences. It has been stated that there is a high probability that employees may make wrong choices due to the choice of law and thus be deprived of a legal regime in which they could actually be better protected.
Conclusion and Implementation Process
Emphasizing the state’s positive obligations to protect workers, the Constitutional Court ruled for the annulment of Article 27, clause (1). The relevant regulation will enter into force on September 10, 2025. However, clause (2), which provides for the application of the law of the employee’s habitual place of work to employment contracts in scenarios where employees and employers do not have a choice of law, will remain in force. The Constitutional Court stated that the determination of the law of the habitual place of work is within the discretionary power of the legislator and that the judge may make an assessment in accordance with the law and equity and found this provision to be in accordance with the Constitution.
This decision is an important milestone in terms of the applicable law in contractual relations between employees and employers. For employers, it underscores the necessity of considering minimum standards that protect workers. For employees, it highlights the need for awareness regarding the potential risk of losing access to more favorable legal regimes. Particularly in international employment contracts, it is crucial for parties to exercise caution when choosing the applicable law and to ensure adequate legal safeguards in their agreements.
Av. Gül ACAR (gul@cetinavukatlik.com)
Av. Alper ÇETİN (alper@cetinavukatlik.com)
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