A foreign company can engage people in Türkiye through four structures, and only four: direct employment under Labour Act No. 4857, a temporary employment relationship (geçici iş ilişkisi) under Article 7 of that Act, a principal-sub-contractor relationship (asıl işveren-alt işveren) under Article 2, or a genuine independent contract, a works contract or a mandate, under the Turkish Code of Obligations No. 6098. Employee leasing, the arrangement most head offices are actually asking about, sits inside the second of these and is by far the narrowest. There is no fifth route, and an arrangement that fits none of the four is not unregulated; it is simply characterised on its facts, usually against the company.
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We advise on which structure a role belongs in, draft the paperwork for it, and audit arrangements already running. This service sits alongside our wider labour and employment practice and our work on employment contracts and workplace policies.
The Four Routes, Side by Side
| Structure | Statutory basis | Who is the employer | Hard limit |
|---|---|---|---|
| Direct employment | Labour Act No. 4857, Arts. 8-14 | Your company | Registration and the statutory floor of rights |
| Temporary employment relationship, agency route | Art. 7(1)-(13); Law No. 4904, Art. 17 | The İŞKUR-authorised private employment agency | Seven closed grounds; 4 months, two renewals, 8 months total |
| Temporary employment relationship, group route | Art. 7(15) | The transferring employer (wage obligation continues) | Written consent of the worker; up to 6 months, two renewals |
| Sub-contracting | Art. 2; Law No. 5510, Arts. 11-12 | The sub-contractor, with the principal jointly liable | Auxiliary work, or a specialised part of the main work |
| Works contract or mandate | Code of Obligations No. 6098, Arts. 470, 502 (test of dependence: Art. 393) | Nobody, if the independence is real | Dependence converts it into employment |
Employee Leasing in Turkey: What Article 7 Permits and Where the Legal Risks Lie
Employee leasing in Turkey is lawful only as a temporary employment relationship (geçici iş ilişkisi) under Article 7 of the Labour Act No. 4857. Article 7(1) allows that relationship in two forms only: through a private employment agency (özel istihdam bürosu), or by assigning an employee within a holding company or to another workplace belonging to the same group of companies. A foreign company that wants staff in Türkiye without its own Turkish employer entity therefore has to fit the arrangement into one of those two routes, or choose a different structure from the table above.
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On the agency route, the arrangement must fall within one of the seven grounds in Art. 7(2): suspension of the contract, seasonal agricultural work, domestic services, work that is not part of the daily business and is done intermittently, urgent health-and-safety work or force majeure affecting production, an unforeseen increase in average production capacity, and periodic increases in work other than seasonal work. An ordinary permanent role is not among them, which is why most cross-border employer-of-record proposals do not survive contact with the provision; we set that analysis out in full in our guide to whether an employer of record is lawful in Türkiye.
Three features of Article 7 catch companies out. First, the agency must hold a separate authority: under Art. 17 of Law No. 4904 on Certain Arrangements Concerning the Turkish Employment Agency, an intermediation licence requires security equal to twenty times the gross minimum wage, while authority to establish temporary employment relationships requires two hundred times, plus a favourable İŞKUR inspection report, no overdue tax or social-security debt (unless deferred or restructured) and, as a rule, two years of uninterrupted registered activity, reduced to six months where the Ministry approves and double security is lodged. Both permissions run for three years and are renewed only on a request made at least fifteen days before expiry.
Second, the employer is the agency, not the client. Article 7(11) says so in terms and requires two written contracts: an employment contract with the worker and a supply contract with the user employer stating the start and end dates, the nature of the work, the agency’s fee and any special obligations. The contract with the worker must also state within what period, no more than three months, the worker may terminate for just cause if not called to work.
Third, the quotas and prohibitions are real. Where the ground is an unforeseen capacity increase, temporary workers may not exceed one quarter of the workplace’s headcount, though workplaces with ten or fewer workers may take up to five. No temporary workers during a strike or lockout, without prejudice to Art. 65 of Law No. 6356 (the minimum staff who must keep working during a lawful strike or lockout). And on the agency route specifically (the statute ties this ban to the grounds in Art. 7(2)), the relationship cannot be established for eight months in a workplace that has carried out a collective dismissal under Art. 29, nor at all in public institutions and workplaces where minerals are extracted underground. Finally, the user employer may not take back its own former employee as a temporary worker until six months have passed from the date the employment contract was terminated (Art. 7(7)).
Time limits, and what happens when they are overrun. Under Art. 7(3), the supply contract may run for as long as the suspension lasts in the case of ground (a), without a time limit for seasonal agricultural work and domestic services, and for at most four months in the other cases; it may be renewed at most twice, for a total not exceeding eight months, except for periodic increases under ground (g). At the end of that period the user employer may not use a temporary worker for the same job until six months have passed. If the temporary relationship continues although the term stated in the contract has expired, Art. 7(13) deems an indefinite-term employment contract to have been concluded between the user employer and the worker from the date the contract ended; the agency then remains liable for the wage, the duty of care and the social insurance premiums arising from the temporary relationship, limited to the contract term.
Who answers for unpaid wages and safety. For arrangements under the unforeseen capacity-increase ground in Art. 7(2)(f), the user employer must check every month whether temporary workers employed for more than a month have been paid, and the agency must show it proof of payment monthly. Where wages are unpaid, the user employer withholds the agency’s fee and pays up to three months’ wages directly into the workers’ bank accounts, set off against the agency’s receivable, and reports the unpaid workers to the provincial labour directorate (Art. 7(12)). The user employer also owes the occupational health and safety training and measures listed in Art. 7(9)(f), and the temporary worker’s basic working conditions may not fall below those of a worker the user employer hires directly for the same job (Art. 7(10)).
Fines. Article 99(1)(b) of the Labour Act fines the employer that uses temporary workers contrary to the principles and obligations of Article 7, for each worker concerned, and Article 99(2) applies that fine increased four-fold where the breach concerns ground (f). Under Article 20(1)(b) of Law No. 4904, a person who arranges temporary employment without İŞKUR’s permission, or after the authority has been revoked, is fined, with a higher fine if the act is repeated, and the employer that takes the service is fined as well.
The group route under Art. 7(15) is the more useful one for corporate groups and is often overlooked. It needs the worker’s written consent at the time of the transfer, is set up in writing for a period not exceeding six months that may be renewed at most twice, and leaves the wage obligation with the transferring employer, while the receiving employer is jointly liable for unpaid wages during the period worked with it, for the duty of care and for social insurance premiums.
The structure also has to fit the rest of the business: its corporate set-up in Türkiye, its payroll and tax position, and the personal data protection (KVKK) rules that govern employee data.
Sub-Contracting and the Collusion Test
Article 2 allows a principal employer to give out auxiliary work, or a part of the main work that requires specialisation for business and technological reasons, and expressly forbids dividing the main work among sub-contractors outside that exception. The sub-contractor must employ the workers it assigns only in that work at that workplace, and the principal employer is liable together with it for what the Act, the employment contract and any collective agreement to which the sub-contractor is a party require towards those workers. Two arrangements are prohibited outright: restricting the rights of the principal’s own workers by re-engaging them through a sub-contractor, and forming a sub-contract with someone previously employed at that workplace.
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The sanction for getting this wrong is not a fine but a reclassification: the sub-contractor’s workers are treated as the principal employer’s workers from the outset, with the seniority, severance and reinstatement exposure that follows. Our guide on when contractor workers are deemed yours from day one works through how that finding is made and what evidence drives it.
Social security tracks the same structure: under Art. 12 of Law No. 5510 the principal employer is liable together with the sub-contractor for the obligations the Act places on employers, even where the insured persons were engaged through a third party’s intermediation, and Art. 11 requires the sub-contractor to report its workers from the principal’s file under a special number issued by the institution.
Contractor or Employee
Article 393 of the Code of Obligations No. 6098 defines the service contract by dependence, and its second paragraph closes the most common escape route by providing that a contract to render a service part-time on a regular basis is also a service contract. A works contract under Art. 470 is a different animal: the contractor undertakes to produce a work for a price; a mandate under Art. 502 covers carrying out another’s business or transaction. The practical test is therefore behavioural rather than documentary: who sets the hours, who supplies the tools, who gives instructions, whether the person is integrated into the company’s organisation, and whether they carry their own commercial risk. Where a foreign national is involved, the structure also has to be consistent with the work-permit application. Article 10 of the International Labour Force Act No. 6735 grants a first permit on condition that the foreigner works in a particular job at a particular workplace belonging to a named real or legal person, or at that person’s workplaces in the same branch of activity, and treats an application to work for a different employer as a fresh first application; Art. 22 places the duty to notify the start and the end of that work on the employer. A gap between the employer named on the permit and the one actually giving instructions is the easiest weakness to find in these arrangements.
Flexible Forms Inside a Direct Employment Relationship
Much of the flexibility companies look for in leasing is available inside ordinary employment. Part-time work under Art. 13 allows significantly reduced weekly hours, subject to the rule that a part-time worker may not be treated differently from a comparable full-time worker merely because the contract is part-time, with divisible monetary benefits paid pro rata. Work on call under Art. 14 is a part-time contract under which the worker performs when needed; if the parties do not fix the period, weekly working time is deemed to be twenty hours, the worker earns the wage for the agreed period whether or not called, the call must come at least four days ahead, and each call must give at least four consecutive hours where no daily period was agreed. Remote work, added to Art. 14 in 2016, must be set up in writing and cover the description of the work, its manner, duration and place, pay and payment, the equipment the employer provides and the duties to protect it, and the employer’s communication with the worker together with the general and special working conditions; a remote worker may not be treated differently from a comparable worker without a substantial reason, and the employer separately owes health-and-safety information, training, health surveillance and equipment safety measures. The detail is in the Remote Work Regulation (Official Gazette, 10 March 2021), which repeats the written-form rule in its Art. 5. The pillar guide on employing staff in Türkiye sets these out for employers building a first team.
Registration, Restructuring and Exit
Registration is where structural mistakes surface first. The workplace notification under Art. 11 of Law No. 5510 is due at the latest on the day insured employment begins, although notification of a company’s incorporation to the trade registry counts as having made it. The entry notification for each worker is generally due before insurance starts under Art. 8, with narrow exceptions: construction, fishery and agriculture workplaces may file on the day work begins, and a workplace filing its first workplace notification has one month for workers who start within that month. Article 102(a) then prices a failure at one minimum wage per worker, doubled where a court decision or an inspection reveals it, and five times the minimum wage where a further unfiled notification is found at the same workplace within a year of that finding.
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Structure also decides what happens on the way out. Where a business or part of a business is sold, Art. 6 transfers every existing employment contract with all its rights and obligations, carries seniority across from the original start date, and makes transferor and transferee jointly liable for debts that arose before the transfer and were already payable on the transfer date, the transferor’s share limited to two years from the transfer. The joint-liability rule does not apply where a legal entity ends by merger, accession or change of type, and the article as a whole does not apply to a transfer resulting from liquidation in bankruptcy. Our analysis of the transfer of an undertaking and the transferor’s two-year liability explains where that line falls. When the relationship ends instead of moving, the exposure runs through termination and severance and, if contested, through labour litigation, which is the reason the structure is worth settling at the start.
Related Practice Areas & Strategic Legal Guides
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- Labour & Employment Law in Türkiye: Employment contracts, workplace regulations, and termination disputes.
- Corporate Law in Türkiye: Company formation, corporate governance, and management compliance under TCC No. 6102.
- Tax Law in Türkiye: Payroll taxes, social security, withholding and day-to-day tax compliance.
- Personal Data Protection (KVKK): Employee data processing, workplace monitoring, and VERBİS compliance.
- Termination & Severance: Notice periods, seniority indemnities, and job security protections.
