Ercüment Erdem Att. Sevgi Unsal Ozden

Employer’s Extended Management Right and Mobility Clauses in Employment Contracts

November 2019

Introduction

In labor law, the laws, collective bargaining agreements, and employment contracts cannot resolve all disputes that may arise during the employee-employer relationship due to their qualification, since it is impossible to specify all needs in advance, to foresee an arrangement for each dispute, or to include details of specific work to be performed. Therefore, the work that the employee is obliged to perform is usually determined within general lines, and the details of the work are not specified, as a rule. This gap is filled with the management right belonging to the employer. In the event that the existence of provisions that grants employers the right to amend the working conditions in an employment contract means that the employer has extended its right to manage. Knowledge of the limits of management rights, and determination of the validity of records that extend the right to manage in employment contracts, are important in the continuation of the employment relationship in accordance with the law, and in the resolution of disputes. In this article, we shed light on the limits of the employer's right to manage, the extended management rights of the employer, and the mobility clauses in employment contracts that are frequently encountered in practice.

Employer's Management Right and Limits

The rights of management of the employer is regulated in Article 399 of the Turkish Code of Obligations[1] (“TCO”). Pursuant to this Article, the employer can make general arrangements regarding the performance of work and the behaviors of the employees in the workplace, and give the employees special instructions. Employees must follow these instructions to the extent required by the rules of good faith. The instructions that regulate the starting and ending times of daily working hours, rest breaks and how to apply them, the usage periods of annual paid leave, the tools and equipment to be used in the performance of work, the rules that should be obeyed for entry and exit of the workplace, the usage of the cafeteria and recreation facilities, procedures to be followed to provide health reports, as well as designated smoking areas in the workplace, are evaluated within the scope of instructions related to the performance of work and the behavior of the employees in the workplace[2]. Rights to supervise and to audit, and the authority to apply disciplinary sanctions when necessary, are also within the scope of management rights.

The employer’s right to manage, which is at the bottom of the resources determining the working conditions, cannot be used contrary to the regulations within the scope of the Constitution, law, collective bargaining agreements, employment contracts, internal regulations and workplace practices.

The employer's management right is also subject to significant limitations, such as “Obligation of Equal Treatment,” “Principle of Proportionality,” and “Employer's Obligation to Inform.” For instance, pursuant to the “Principle of Equal Treatment,” as regulated under Article 5 of Labor Law numbered 4857[3] (“Labor Law”), the employer is prohibited from arbitrary discrimination between employees in the workplace. In addition, the exercise of the right to manage is limited with its purpose and, despite the fact that there may be exceptional circumstances, it is accepted that the employer cannot give instructions concerning the private life of the employee.

The employer must comply with objective rules of good faith when exercising the right to manage, the instructions given should not be in contradiction with mandatory provisions, ethics, public order and personal rights, and the achievement of the subject of instruction may not be impossible. These limitations are also clearly stated in the relevant decisions of the Court of Cassation.[4] The employee is not obliged to follow instructions in the event that the employer exercises the right of management contrary to restrictions; in other words, if the instruction is contrary to the law, morality, and public order[5].

Employer’s Extended Management Rights

Regulations that are called "the amendment records," or “the records to reserve the right of amendment,” which grant to the employer the authority to make unilateral changes in employment contracts, or in internal regulations and similar documents, are frequently encountered in work life. Amendment records in many different subjects, such as change of workplace (mobility clause), change of duty and position, and change of wages, are included in employment contracts and other documents. As stated in the decisions of the Court of Cassation in this regard, if the parties of the employment relationship make arrangements through the employment contract that the employer may make amendments to the working conditions, if necessary, this means that the employer has the extended right to manage.[6] Through these kinds of clauses, the employer is entitled to adapt the working conditions to changing circumstances without following the procedure[7] as stipulated under Article 22 of the Labor Law, and provides benefit in the evaluation of the labor force.

Although there are decisions to the contrary, the Court of Cassation states in its numerous precedents that the employer has continuously acquired the right to change the working conditions of the employee provided that it not abuse the management right and complies with the limits of the contract. Moreover, it is stated in the relevant decisions that this right shall be used objectively[8].

On the other hand, in Article 24 of the TCO, it is regulated that clauses and provisions which grant unilateral authority to the draftsman to make amendments to the provisions of a contract containing general terms or to make new arrangement in such type of a contract shall be deemed not to have been written. Although there are opinions to the contrary, by taking into account this legal regulation, it is considered that the amendment records cannot be included in standard labor contracts or internal regulations, and that substantial changes in working conditions can be made by complying with the provisions of Article 22 of the Labor Law. However, as the regulation of Article 24 of TCO covers only general terms and conditions, in other words, to the standard labor contracts and internal regulations of the workplace, such amendment records may be included in individual employment contracts[9]. These records will be valid if the change has arisen from the requirements of the work, and the authority is used in accordance with the objective rules of good faith, as well. In this context, the authorization for the transfer of the employee may be included in the individual and non-standard employment contracts. However, unilateral amendment records that may lead to a reduction in the wages of the employee are not considered valid. On the other hand, provided that it is not contrary to the mandatory rules, and the wages are paid, it is possible to obtain prior approval in the employment contract regarding equalization practices.

Mobility Clauses in Employment Contracts

Due to the qualification of the performance of work, mobility clauses are included, especially in employment contracts of those employees working in construction and petroleum, or in the tourism, banking and insurance sectors. Generally, these clauses specify that the employer reserves the right to change the place of work, and that an employee may be required to work in another office or location of the employer, if the need arises. Thus, the change of workplace may be made without the requirement for notification and written approval as stated in Article 22 of the Labor Law.

Pursuant to the Court of Cassation, the authority to transfer granted to the employer is not unlimited, and it should be used objectively, and by complying with the rules of good faith. The employer should also prove the reason for the transfer in a possible dispute.[10] In other words, the change of the workplace should be a necessity for the continuation of the business. In cases where the employer reserves the right to change the place of work, the employer shall act in accordance with the rules of goodwill and good faith, shall not act arbitrarily, nor make decisions in a way that will harm the professional and private life of the employee, and in a minimum manner in accordance with the duty to protect the employee. The change in the workplace shall not aim to punish the employees, nor force them into termination. The implementation of the mobility clause in order to terminate the employment contract is an abuse of the employer's right to manage.[11] In addition, pursuant to the Court of Cassation, the change of workplace should be a necessity, the situation of the employee shall not be worsened, and working conditions, such as transportation to the new workplace and lunches shall also be taken into consideration.[12] As well, the benefits to be gained by the employer due to the changes shall be commensurate with any pecuniary or non-pecuniary damages suffered by the employee.

As a result, mobility clauses, which are frequently encountered in working life, are considered valid if (i) the records of the workplace change and are not contrary to the mandatory rules, (ii) they do not contain general, intangible and unclear statements, (iii) the change is a requirement, (iv) they are enacted in accordance with the rules of good faith during the exercise of the authority, (v) they comply with the principle of equality, and (vi) and are not employed arbitrarily.

If the mobility clauses are considered invalid, the employer shall only make a substantial change in working conditions by written notification to the employee in accordance with Article 22 of the Labor Law. Changes that are not in conformity with this procedure, and are not accepted by the employee in written form within six working days, shall not bind the employee.

Conclusion

In the event that the existence of provisions that grant employers the right to amend the working conditions in an employment contract means the employer has extended its right to manage. This authority granted to the employer shall be exercised in accordance with the objective rules of good faith. The instructions to be given in this regard should not be in contradiction with the mandatory provisions, ethics, public order and personal rights. In cases where the right to change the place of work is reserved in the employment contracts, the change should be necessary for the continuation of the work, should not aim to punish the employee, and should not worsen the situation of the employee.

[1] TCO (Official Gazette, 04.02.2011, No. 27836) entered into force on 01.07.2012.

[2] Prof. Dr. Sarper Süzek: İş Hukuku, 14th Ed., Beta Yayınları, Istanbul 2017, p. 87.

[3] The Labor Law (Official Gazette, 10.06.2003, No. 25134) entered into force 10.06.2013.

[4] 9th Chamber of the Court of Cassation, 2017/12550 E., 2019/14617 K., 01.07.2019.

[5] Süzek, p. 91.

[6] 9th Chamber of the Court of Cassation, 2007/34216 E., 2009/111 K., 19.01.2009.

[7] Pursuant to Article 22 of the Labor Law, any change by the employer to working conditions based on the employment contract, on the rules of work that are annexed to the contract, and on similar sources or workplace practices, may be made only after written notice is served by the employer to the employee. Changes that are not in conformity with this procedure, and which are not accepted by the employee in written form within six working days, shall not bind the employee.

[8] 7th Chamber of the Court of Cassation, 2015/29926 E., 2015/25593 K., 16.12.2015; 9th Chamber of Court of the Cassation, 2009/39668 E., 2010/37397 K. 13.12.2010; and the decisions to the contrary, please see 9th Chamber of the Court of Cassation, 2003/23105 E., 2004/1204 K., 26.01.2004; 9th Chamber of the Court of Cassation, 2012/23672 E., 2014/11862 K., 09.04.2014.

[9] Süzek, p. 687.

[10] 22nd Chamber of the Court of Cassation, 2017/11252 E., 2018/5151 K., 27.02.2018.

[11] 9th Chamber of the Court of Cassation 2010/29128 E., 2012/37213 K., 12.11.2012.

[12] 9th Chamber of the Court of Cassation, 1988/2824 E., 1988/4094 K., 11.04.1988.