May a Laborer’s Overtime be Included in His Monthly Wage?

The concepts of wage and overtime

An employment contract is such agreement concluded by a laborer and an employer in order that a work is performed. Wage constitutes an essential component of employment contracts; this is because, a work should be performed absolutely in consideration of wage. Otherwise, an employment contract will not arise. As a matter of fact, an agreement which does not contain a wage would not be expected to bear the characteristics of an employment contract.

In the Labor Code, the weekly working time is determined to be 45 hours, and the works exceeding 45 hours on a weekly basis are considered as overtime, and the wage for the overtime is paid in such an amount 50% higher than the normal wage.

How may an overtime wage be included in the monthly wage?

We should state firstly that, according the provision contained in the article 41/7 of the Labor Code, “The laborer’s approval is required for working overtime”. Such approval may be obtained at the phase that the employment contract is concluded, or may be obtained before working overtime after the contract (agreement) is concluded. In case the approval is obtained in writing, this will provide convenience for the burden of proof. Similarly, by virtue of the principle “freedom of contract”, the parties may agree that the overtime wages shall be included in the monthly wage. This declaration of acceptance may be inserted as an article into the contract while the employment contract is concluded and may also be submitted after the employment relationship is established. However, such agreement should be made by taking the laborer’s interests into consideration in compliance with the Code.

In respect of the matter, the Supreme Court of Appeals established jurisprudences that gained stability. According to the jurisprudences, there are various limitations about inclusion of overtime wage in the laborer’s monthly wage. These limitations are that the total work should not exceed the monthly 270 hours’ working time prescribed as a mandatory rule by the Code and that the laborer should grant written approval for inclusion of his overtime in his monthly wage and that the monthly wage should be determined in such an amount considerably higher than the minimum wage and that there should not be a manifest disproportion between the work performed and the wage determined.

To scrutinize the above conditions one by one; the requirement that the total work does not exceed 270 hours arises from the upper limit specified by the Code. In order to protect the laborer who is in a weaker position than the employer in the employment relationship, the lawmaker introduces an upper limit for the working time and determines the maximum monthly working time to be 270 hours, including the overtime works. In other words, with the exception of the extraordinary cases specified particularly by the Code, under no circumstances shall the laborer be employed for more than 270 hours. The other requirement namely the written approval may be obtained from the laborer while the employment relationship is established or before the activity is performed i.e. before working overtime, as we have mentioned in our newsletter. The Supreme Court of Appeals directly observes the two most significant requirements that the monthly wage is in an amount considerably higher than the minimum wage and that there is not a manifest disproportion between the obligations. Therefore, it is necessary for the monthly wage to be calculated by taking into consideration the overtime works and the wage that will be computed in respect thereof and to be considerably higher than the minimum wage. What is meant by disproportion between the obligations is that, even if the laborer’s wage is determined in such an amount considerably higher than the minimum wage, the laborer’s wage is in an amount lower than the wage that the laborer should have been paid as required by the task he performs. The Supreme Court of Appeals may also consider the circumstances of the concrete case and thus, establish that there is disproportion between the obligations and order the invalidity of the relevant article in the contract.

In relation to the matter, in the decision numbered E. 2014/16641, K. 10.09.2014 and dated 10.09.2014 as rendered by the 7th Civil Chamber of the Supreme Court of Appeals, the Supreme Court of Appeals assesses the concrete case by addressing the conditions we have explained above and orders that there is unpaid overtime receivable, although the overtime receivable is included in the wage under the contract.

“The employment contract, in which the plaintiff’s signature is contained, states that the overtime wage is included in the monthly wage. However, the amount of the plaintiff’s wage, applicable on the date that the plaintiff started working, cannot be understood in the employment contract. It is necessary for the local court to investigate the amount of the plaintiff’s wage applicable on the date that the plaintiff started working and thus, determine whether or not his monthly wage is over the minimum wage and in such an amount recompensing his overtime works, and depending on the result, whether or not the plaintiff was paid along with the wage for his two hundred and seventy hours’ works and receive a report to calculate the plaintiff’s remaining overtime works if any.”

In conclusion, it is possible to include overtime wage receivable in the main wage in case the certain conditions we have mentioned above are met. However, even if it is concluded that these conditions have been fulfilled; in case of a dispute, the court shall ex-officio carry out a review, assess certain factors e.g. the circumstances of the concrete case, the characteristics of the work and the wage determined and establish the verdict after the review and assessment.