Background
A public utility (the plaintiff) had contracted out a portion of its operations — meter-reading services — to a succession of subcontractors under public-procurement service agreements. A worker employed by one of those subcontractors brought a labor claim against the public utility before the labor court, which adjudicated the claim and ordered payment of employment entitlements. Pursuant to that judgment, the worker initiated enforcement proceedings, and the public utility paid a total of 215,172.58 Turkish lira into the execution file (210,224.48 TL on 5 November 2019 and 4,948.10 TL on 19 November 2019).
Having satisfied the worker’s judgment debt, the public utility sought reimbursement from the subcontractors through mediation — a mandatory pre-condition for commercial litigation under Turkish law — but no agreement was reached, and non-settlement minutes were drawn up. The utility then filed the present recourse (rücuen tazminat) action before the Commercial Court of First Instance against two subcontractors, claiming the full amount paid plus advance interest from the dates of payment.
The first defendant subcontractor (a construction and trade company) argued that the worker had in fact been the public utility’s own employee, that the worker’s severance-period did not coincide entirely with its contractual period, and that the mandatory mediation requirement had not been properly satisfied. The second defendant (a services company) contended that the claim was time-barred, that the public utility bore exclusive liability as the true employer, and that at most joint-and-several proportional liability should apply. The Commercial Court of First Instance partially granted the claim on 20 January 2023, allocating liability among the subcontractors in proportion to the periods during which each had employed the worker.
The Court’s Holding
Both the plaintiff and the first defendant subcontractor appealed. The Adana Regional Court of Appeals, 9th Civil Chamber, dismissed both appeals on the merits and upheld the first-instance judgment in its entirety. The appellate court confirmed the foundational legal principle that, although a principal employer and a subcontractor are jointly and severally liable to the worker under the Labour Code, the recourse relationship between those parties is governed by the terms of their own service procurement contract — not by Article 2(6) of the Labour Code. Where the contract expressly places responsibility for workers’ employment entitlements on the subcontractor, that allocation is enforceable.
The court further held that each subcontractor’s recourse liability is limited to the period during which it actually employed the worker. It would be legally improper to hold a subcontractor liable for employment entitlements accruing during periods when a different contractor employed the worker. Annual-leave pay and notice compensation were attributed to the last subcontractor, while severance pay, weekly rest pay, wages, and overtime were apportioned among the subcontractors according to their respective employment periods.
The appellate court also rejected the plaintiff’s ground of appeal, which attacked the expert accountant’s report on the basis of alleged calculation errors. It found that the first-instance court had been entitled to rely on the expert report, and that the first defendant subcontractor’s payment of severance directly to the worker (evidenced by a release document and official payroll records) had been properly credited, meaning the plaintiff was not entitled to recover that amount again.
Key Takeaways
- In Turkish law, joint-and-several liability between a principal employer and a subcontractor under the Labour Code governs the worker’s claim only; in recourse proceedings between co-obligors, the service procurement contract controls the allocation of liability.
- A subcontractor’s recourse liability to reimburse the principal employer is capped at the period during which that particular subcontractor actually employed the worker — it cannot be held liable for entitlements arising under a different contractor’s tenure.
- Where a subcontractor has already paid a specific entitlement (e.g., severance) directly to the worker and obtained a signed release backed by payroll records, that amount is not recoverable again by the principal employer in a recourse action.
- Pre-litigation mediation is a mandatory procedural condition for commercial recourse claims of this type; failure to satisfy it properly can be a basis for dismissal, though the court found the condition was met here.
Why It Matters
This decision reinforces a practically important rule for public-sector and private entities that outsource labor-intensive services under competitive-tender contracts: paying a worker’s court-ordered entitlements does not necessarily mean absorbing the full economic loss. Provided the service procurement contract allocates employment costs to the subcontractor — as is standard in Turkish public-procurement practice — the principal employer can recover in full from the relevant subcontractor(s), even after the fact. Legal departments structuring or renegotiating such contracts should ensure that liability-allocation clauses are explicit, since courts will look first to the contract rather than to statutory default rules.
The ruling also provides clarity on the temporal dimension of subcontractor liability in multi-contractor supply chains: courts will apportion recourse claims period by period, and any direct payments a subcontractor has already made to the worker (with documented releases) will be credited against the recourse claim. This limits the risk of double-recovery while preserving the principal employer’s right to full reimbursement for amounts it genuinely absorbed.