Background
The plaintiff was the principal employer and the defendant was its subcontractor under an agreement covering filling and maintenance work. Four workers employed by the defendant since 1994 or 1995 transferred to the plaintiff in 2013 under tripartite consent documents signed by both companies and each worker. Those documents preserved the workers’ accrued claims against their former employer. Their employment later ended through mutual termination agreements in 2017, after which the plaintiff paid severance and notice compensation and obtained assignments of the workers’ claims.
The plaintiff commenced enforcement proceedings against the defendant for TRY 224,902.23. After the defendant objected, the plaintiff sued to annul the objection. The İstanbul Anadolu 8th Commercial Court partially allowed the action, holding the defendant liable for TRY 207,356.44 in severance compensation attributable to the periods during which it employed the workers. It rejected recovery of notice compensation because responsibility for that termination-related entitlement rested with the final employer, and it denied both sides’ compensation requests concerning the enforcement proceedings.
The defendant appealed, arguing among other things that the plaintiff had already assumed or funded the employment liabilities, the parties had no genuine principal-employer/subcontractor relationship, the workers’ assignments were invalid or collusive, mutual termination did not generate severance rights, and any internal liability should at most be divided equally under Article 167 of the Turkish Code of Obligations.
The Court’s Holding
The 17th Civil Chamber of the İstanbul Regional Court of Appeal rejected the appeal on the merits and affirmed the trial court’s judgment. It held that, in the parties’ internal relationship, the subcontractor was responsible for severance compensation corresponding to the periods in which the workers were employed by it. The court found no error in relying on the supplemental expert report, which calculated that liability using each worker’s service with the defendant and wages at the end of that service, producing a total of TRY 207,356.44.
The court reasoned that statutory joint liability protecting workers does not determine the ultimate allocation between the principal employer and subcontractor. Under the cited Court of Cassation authorities, where a service-procurement contract contains no provision shifting employee-benefit liability in favor of the subcontractor, the principal employer may recover from the subcontractor the amounts attributable to the subcontractor’s workers and employment period. Article 167’s default equal-sharing rule therefore did not require a 50–50 allocation in this contractual setting.
The court also rejected the argument that an individual transfer of employment contracts eliminated the defendant’s liability. It applied workplace-transfer rules by analogy and emphasized that the tripartite consent documents expressly preserved the workers’ accrued claims. The later mutual termination agreements likewise did not defeat recovery because they expressly provided that the workers would receive the entitlements shown on their severance statements.
Key Takeaways
- A principal employer that pays workers may recover from a subcontractor the severance compensation attributable to the subcontractor’s own employment period when the contract does not shift that liability away from the subcontractor.
- An individual transfer of an employment contract does not extinguish the former employer’s responsibility for accrued severance rights; workplace-transfer liability principles may apply by analogy.
- A mutual termination agreement does not preclude severance recovery where the agreement itself provides for payment of the worker’s severance entitlement.
Why It Matters
The decision distinguishes an employer’s statutory joint liability to workers from the final allocation of liability between contracting businesses. For service-procurement arrangements, silence in the contract did not produce equal sharing; the subcontractor remained responsible for severance generated during its employment period.
The ruling also underscores the importance of transfer documents and termination agreements. Express preservation of accrued rights during a worker transfer, and an express promise of severance upon mutual termination, can determine whether the former employer remains exposed to recourse claims.