It asks what work was handed over, whether both parties genuinely employ people at the site, and whether the arrangement conceals what the parties really agreed — and an invalid arrangement makes the contractor's workers the principal employer's from day one.
A subcontractor’s workers become the principal employer’s workers, retrospectively and from the first day of their service, whenever the arrangement between the two companies fails the test in Article 2 of Labour Act No. 4857. That test is not about the label on the contract, the invoicing route, or whether a tender was properly run. It asks what work was handed over, whether both parties genuinely employ people at the site, and whether the arrangement conceals what the parties actually agreed. And the liability does not begin there: even a perfectly valid subcontracting arrangement makes the principal employer jointly liable with the subcontractor, in respect of that workplace, for obligations arising from the Labour Act, from the employment contract, and from any collective agreement to which the subcontractor is a party.
For a corporate employer in Türkiye those two propositions define the exposure. The first is the scenario that surfaces in an inspection or a claim years later. The second is the ordinary, permanent condition of using contract labour at all, and it is the one routinely priced at zero in a service procurement budget.
One drafting note. Article 2 received a fourth paragraph in 2010 that was repealed in 2012 by Law No. 6331. Article 3, in the wording given to it in 2008, refers to the definition as “the sixth paragraph”; counting the repealed fourth paragraph, the same provisions are the seventh and eighth paragraphs of Article 2, and are also cited as Article 2/7 and 2/8. Both point to the same text.
The Elements of a Valid Arrangement
Article 2 defines the relationship as one in which an employer takes work from another employer, at that other employer’s workplace, either in auxiliary work relating to the production of goods or services carried out there, or in a portion of the main work in jobs requiring expertise by reason of the requirements of the undertaking and the work and for technological reasons, and deploys the workers assigned to that job only in the work it has taken at that workplace. The same paragraph then adds that the main work may not be divided and given to subcontractors outside those cases.
The Subcontracting Regulation (published in the Official Gazette of 27 September 2008) turns that definition into conditions. Article 4 of the Regulation states them as conditions that must be met for the relationship to be established at all, not as guidance.
| Element | What it requires | Where it typically fails |
|---|---|---|
| Two real employers | The principal employer must itself employ workers in the production of goods or services at the workplace. | A holding entity that owns a site but staffs it entirely through contractors. |
| Nature of the work | Auxiliary work, or a portion of the main work requiring expertise on both grounds together. | A production step relabelled as a service purchase. |
| Exclusive deployment | The subcontractor must employ the assigned workers only in the work taken at that workplace. | A shared pool rotated between several clients. |
| Dependence on the main work | The work must relate to production at the site, depend on the main work and last as long as it does. | Unconnected activity bundled into the same contract. |
| Identity of the subcontractor | Not a person previously employed at that workplace, though a former employee later becoming a shareholder in a company or ordinary partnership is not barred. | A supervisor who resigns on Friday and returns on Monday as a contractor. |
The Regulation’s definitions do the heavy lifting. Main work is the work forming the basis of the production of goods or services. Auxiliary work is work related to that production but outside the direct production organisation, not a compulsory element of production, dependent on the main work and continuing as long as it continues. Work requiring expertise is defined as work which, by its nature, requires an expertise separate from the undertaking’s own, and the Regulation states as a matter of principle that an employer carries out production with its own workers and its own management organisation, permitting division of the main work only where the requirement of the undertaking and the work and technological reasons are satisfied together. A subcontractor that has taken a portion of the main work may not divide it again and pass it on.
Missing Conditions and Collusion
Article 2 and the Subcontracting Regulation approach a failed arrangement from two directions, and the two overlap.
The first is the list of conditions. Article 4 of the Regulation sets out what must be present for the relationship to be established: the principal employer’s own workers in production at the workplace, auxiliary work or a portion of the main work requiring expertise, deployment of the assigned workers only in the work taken at that workplace, work that depends on the main work and lasts as long as it does, and a subcontractor who was not previously employed at that workplace. Article 2 adds, in mandatory terms, that outside work requiring expertise by reason of the requirements of the undertaking and the work and for technological reasons, the main work may not be divided and given to subcontractors.
The second is collusion. Collusion is an apparent agreement that does not match the parties’ real and common intention and is designed to deceive third parties. The general principle is in Article 19 of the Turkish Code of Obligations No. 6098, which directs that the real and common intention of the parties governs, regardless of the words they used mistakenly or in order to conceal their true purpose. Article 2 of the Labour Act names two specific cases: the principal employer’s own workers may not have their rights restricted by being taken on by the subcontractor and kept in work, and a subcontracting relationship may not be set up with someone previously employed at that workplace. It then provides that otherwise, and generally, the relationship is accepted as resting on a collusive transaction. The Regulation’s definition of collusion is wider and lists four cases: giving a subcontractor a portion of the main work that requires no expertise; a relationship set up with a person previously employed at that workplace; keeping the principal employer’s workers in work through the subcontractor with their rights restricted; and transactions intended to conceal the parties’ real intentions, such as avoiding public-law obligations or restricting or removing rights arising from the employment contract, a collective agreement or legislation.
The two directions meet at the expertise test: a portion of the main work handed over without the required expertise is both a missing condition under Article 4 and collusion under the Regulation’s definition. Where the relationship is accepted as resting on a collusive transaction, Article 2 states the consequence, and Article 3 repeats it for an inspector’s finding that is not challenged in time or is upheld by the court: the subcontractor’s employees are treated as the principal employer’s employees from the beginning. An employer facing a claim covering several years of successive service contracts therefore needs to look first at what work each contract actually handed over, because under Article 19 of the Code of Obligations the real and common intention of the parties governs, not the words they used.
What the Inspectorate Actually Weighs
The Subcontracting Regulation sets out what labour inspectors consider when examining collusion. This is the closest thing Turkish law offers to a checklist, and it is worth reading as the questions the arrangement must be able to answer.
| Matter examined | What it goes to |
|---|---|
| Whether the work given is among the auxiliary works of the main work carried out at the site | The primary classification question |
| Whether it is work requiring expertise by reason of the undertaking and the work and for technological reasons | The only gateway for a portion of the main work |
| Whether the subcontractor is a person previously employed at that workplace | The statutory indicator in Article 2 |
| Whether the subcontractor has adequate equipment and experience for the work | Whether it is a real undertaking or a payroll vehicle |
| Whether the qualifications of the workers to be employed suit the work | Whether the claimed expertise exists in the workforce |
| Whether any of the principal employer's workers work in the subcontracted job, beyond those assigned to coordination and supervision | Whether the two workforces are in truth one |
| Whether the contract aims to avoid public-law obligations, or to restrict or remove individual or collective rights | Purpose, in the collusion sense |
Two of these turn on documents rather than testimony. The Regulation requires the written subcontracting agreement to state what the main work is, what work has been given and, where a portion of the main work is given, a technical explanation of how the expertise condition is met, together with the joint liability wording and an express statement that the rights of workers previously employed by the principal employer may not be restricted. Where expertise is claimed, an equipment list, work completion certificates and operator and technical staff certificates are annexed as evidence of it. A file containing none of that is not merely incomplete; it is itself evidence about the last two factors above.
The Report, the Thirty Working Days, and the Registration
Registration is a separate obligation from the contract. Under Article 3 of the Act, an employer must notify a workplace to the regional directorate within one month, and a subcontractor must obtain the written subcontracting agreement from the principal employer and register its own workplace with the required documents. The Regulation lists what accompanies the notification: a copy of the Trade Registry Gazette for legal entities, and the subcontracting agreement with its annexes, and provides that registration is refused where the information declared or the documents required are missing or untrue. Establishing a principal employer–subcontractor relationship at a workplace counts as establishing a new workplace.
If an inspection establishes a collusive transaction, the reasoned inspector’s report is served on the employers, and it may be challenged before the competent labour court within thirty working days of service. That period was substituted for six working days by Law No. 6552 in 2014. The Act directs that the action be concluded within four months under the simplified procedure, and obliges public administrations to bring such challenges and to pursue further remedies against court decisions. If no objection is filed in time, or the court upholds the finding, the registration is cancelled and the subcontractor’s employees are treated as the principal employer’s employees from the beginning.
One administrative detail is worth flagging because the two texts do not read identically: the Act refers to service through the regional directorate, while the Regulation, as amended in 2017, refers to service by the Provincial Directorate of Labour and Employment Agency. Whichever body serves it, the thirty working days runs from service, and a challenge to an inspector’s finding is a court action with an evidential burden, not an administrative appeal. Where a workforce claim is already in prospect, the mediation stage described in our note on workplace mediation and labour litigation is a condition of suit under Article 3 of Law No. 7036 for employee and employer claims and reinstatement, though not for claims arising from occupational accidents or diseases, which are expressly excluded from that requirement.
What the Finding Costs
Joint liability exists whether or not anything went wrong. Article 2 makes the principal employer liable together with the subcontractor, towards the subcontractor’s employees and in respect of that workplace, for obligations arising from the Labour Act, the employment contract and any collective agreement to which the subcontractor is a party. Those words are limits as much as exposure: the liability is tied to that workplace, and the collective agreement is the subcontractor’s own.
Independently, Article 36 requires all employers giving work to a subcontractor to check, on a worker’s application or monthly of their own motion, whether the subcontractor’s workers’ wages have been paid, and to deduct any unpaid wages from progress payments and pay them into the workers’ bank accounts. The same Article sets up a distinct mechanism for public administrations, state economic enterprises and certain banks in construction and repair works, with the notable limit that no responsibility falls on those administrations beyond three months’ wage claims for each progress payment period.
Where the arrangement fails, the consequences move from concurrent liability to identity of employer, and they compound:
- Seniority and comparison. Service counts against the principal employer from day one, which affects severance calculated under Article 14 of the repealed Labour Act No. 1475, preserved by Provisional Article 6 of Law No. 4857, and opens comparison with the principal employer’s own workforce.
- Job security. Under Article 18, the valid-reason regime applies at workplaces with thirty or more employees to employees with at least six months’ seniority, with the seniority condition not required for employees working underground. A retrospective transfer of a contract workforce can cross that threshold. Under Article 20, the burden of proving a valid reason lies on the employer, and under Article 21 an employer that does not reinstate within one month of the employee’s application owes compensation of not less than four and not more than eight months’ wages, plus up to four months’ pay for the period not worked.
- Social security. Article 12 of Law No. 5510 makes the principal employer liable together with the subcontractor for the obligations that Law imposes, even where the insured entered work through the intermediation of a third person. Its definition of a subcontractor is deliberately wider than the Labour Act’s: it has no auxiliary-work or expertise limb and no exclusive-deployment condition, so an arrangement can sit outside Article 2 and still attract social security liability.
- Occupational health and safety. Under Article 22 of Law No. 6331, where the relationship lasts more than six months the principal employer coordinates the health and safety board arrangements, and where neither party alone must form a board but their combined headcount exceeds fifty, a joint board is formed with coordination by the principal employer.
- Administrative fines. Article 98 provides for a fine per worker employed for breach of the notification duties in Article 3, and a separate fine imposed on the principal employer and the subcontractor or their representatives individually for a collusive workplace notification, repeated each month if the breach continues after the fine becomes final. The figures printed in the Act are the nominal amounts at the time of amendment and are revalued annually, so the sum payable is the revalued figure in the relevant annual communiqué.
Foreign groups that staff a Turkish site through a contractor rather than through a local entity should read this alongside the direct-employment route described in our guide to employing staff in Türkiye as a foreign employer, because the two structures allocate exactly the same statutory risks differently. The framework as a whole is set out on our labour law page, and the claim-side consequences on our workplace disputes and litigation page.
The Route the Act Does Provide
Where a business needs flexible headcount rather than a service, Article 2 is the wrong provision to be reading. Article 7 provides for a temporary employment relationship, established either through a private employment agency authorised by the Turkish Employment Agency or by temporary assignment within a holding or a group of companies with the worker’s written consent at the time of transfer.
It is a bounded route. The grounds are listed exhaustively, among them the cases in which the contract is suspended, seasonal agricultural work, domestic services, work not counted among the daily business of the undertaking and performed intermittently, urgent occupational health and safety situations or force majeure significantly affecting production, unforeseen capacity increases, and periodic increases in work other than seasonal work. Durations are capped: four months for most grounds, renewable at most twice and, except for the periodic-increase ground, up to eight months in total, with a six-month wait before temporary workers are used again for the same job. Workers may not be supplied during a strike or lockout, nor for eight months at a workplace where a collective dismissal has taken place under Article 29, nor in public institutions or underground mining under that paragraph. In the capacity-increase case, temporary workers may not exceed one quarter of the workforce, subject to a separate allowance of up to five workers at workplaces employing ten or fewer. A worker whose contract was terminated may not be brought back as a temporary worker within six months of the termination. And the temporary worker’s basic working conditions may not fall below what direct employment for the same job with the same employer would provide.
That last sentence is the drafting principle behind the whole area. Turkish labour law permits an employer to buy in work and to borrow labour, on stated conditions and within stated limits. What it does not permit is an arrangement whose function is to place the same people, doing the same work, under a different set of rights. Where the relationship is accepted as resting on a collusive transaction, Article 2 does not adjust it for the future: the subcontractor’s workers are treated as the principal employer’s workers from the beginning.
