In employment contracts between workers and employers, penalty clauses are sometimes included. Employers who pay for employee training often include a penalty clause to ensure the employee does not leave immediately after receiving training. However, such penalty provisions must not be one-sided.
Can an Employer Impose a Penalty Clause?
Penalty clauses may be applied in employment contracts depending on the nature of the job. Some employers include penalty provisions or require compensation if an employee leaves before a specified period—often two to three years—either to recoup training costs or to retain skilled staff. Employers who incur expenses for an employee’s training commonly require the employee to work for a set period in exchange for those costs.
Under the Turkish Code of Obligations, penalty clauses in service contracts are subject to specific rules. Penalties inserted into a contract without the employee’s consent are considered invalid. A penalty clause becomes valid only with the worker’s approval. Therefore, penalty terms that bind both the employee and the employer must be included in the employment contract. Furthermore, a penalty imposed on the employee cannot exceed the penalty that would be imposed on the employer. If a bilateral clause creates an unequal burden on the employee, the penalty may be declared invalid; however, if a contract has already been signed, the penalty is not automatically annulled in full—liability is limited to the amount reasonably attributable to the employer’s responsibility.
Court May Reduce Excessive Penalties
When an employment contract contains an excessive penalty clause, a court may intervene. Under relevant law, if a penalty is found to be exorbitant, a judge can reduce it. For penalties tied to a condition that the employee work for a certain period, the courts may adjust the required or equivalent duration and related obligations.
For example, if an employment agreement requires an employee to work a set period in exchange for training costs, the employee is generally required to comply. However, any sanction must be proportionate. The Supreme Court has set precedents on this issue. In one case, an employee received 1,400 TL worth of training related to occupational health and safety and agreed in the contract not to leave the job for three years. The employee resigned after five months.
The employer sued for reimbursement of the training costs, arguing the employee had committed to a three-year term but left without a justified reason after five months. The local court initially found that the training cost was modest and ruled that reimbursement was not feasible despite the breach of contract.
Supreme Court Ruling
The employer appealed the local court’s decision. The Supreme Court emphasized that the training provided by the employer aimed to improve the employee’s ability to perform the job and made it easier for the worker to find employment. The Court noted that the training had been given so the employee could work in the employer’s business, framing the issue within the employee’s duty of loyalty.
The decision stated that the employee left without a valid reason after five months and that the agreed period should be proportionate to the actual time worked and the training cost. Consequently, the Court ordered the employee to make a payment aligned with that proportionality. At the same time, the Court clarified that training provided for occupational health and safety is aimed at workplace safety and falls within the employer’s responsibilities; therefore, costs for such mandatory safety training cannot be demanded from the employee. Workers in similar situations can cite this Supreme Court decision as a precedent.