The Case Where Primary Employer – Sub-Employer Relationship is not Established: Assignment of the Work to Another Person on a Turn-Key Basis

Sub-employers are defined as the persons who have the title “employer”, however, who assume a work for a part or annexes of a certain work and employ laborers at that workplace or its annexes on their own behalves. Pursuant to the definition in the Code, sub-employer is called as “Another employer who assumes a work from the primary employer for the primary employer’s auxiliary works regarding the commodity or service production conducted by the primary employer at the workplace or for the works requiring expertise for technological reasons and as a requirement of the work and the business for a part of the primary work and who employs his laborers, appointed for that work, only for the work assumed by him at that workplace” (The Labor Code, article 2/6). These persons are also referred to as subcontractor, intermediary or constructor.

For economic, technical or a number of other reasons, employers are not able to carry out every phase of production or service by means of their own laborers and thus, they appoint sub-employers for the conduct of auxiliary works particularly such as cleaning, repair and maintenance, food, servicing and security. In practice, it is very frequently observed that some of the employers appoint sub-employers for a part of the primary work and sometimes even further, for the entire work. One of the most significant enforcements brought about by this relationship is that the primary employer and the sub-employer are severally responsible for the rights and receivables pertaining to the staffs of the sub-employer.

Nonetheless, it is not possible to say that a primary employer – sub-employer relationship is established in every case where another employer is appointed for the conduct of the work. In order for a primary employer – sub-employer relationship to be established, it is necessary that certain conditions have taken place; and it is possible to state these conditions as follows:

1) First of all, there should be a primary employer that employs laborers at the workplace.

2) The sub-employer should have laborers working/serving under the sub-employer and there should be a workplace where the sub-employer will employ these laborers. In the words of the Supreme Court of Appeals, “The sub-employer should have a certain organization, expertise and legal independence for the production of the commodity or service assumed by the sub-employer from the primary employer under a contract”.  

3) The sub-employer should be employing his laborers at a workplace belonging to another (primary) employer. Also, in this respect, such a relationship does not arise between two employers, one of whom assumes a work from the other one, however, conducts the work at his own workplace (carries out contract manufacturing).

4) The laborers, appointed by the employer for the work assumed from the primary employer, should be employed by the employer at that workplace only.

5) The employer should employ his laborers for a part of the primary work or for the auxiliary works regarding the commodity or service production conducted by the primary employer at the workplace.

In order that a primary employer – sub-employer relationship is established, all the above-listed conditions should occur completely.

This relationship does not arise in case a person abandons the execution of a work entirely to another person, for instance, in case such person assigns the work to another person subject to turn-key delivery. Moreover, in such case, since any laborer of the person qualified as primary employer will not work at the workplace, the conditions necessary for the establishment of the primary employer – sub-employer relationship will not be complete.

Thus, also in the Subcontracting Regulation, under the heading “conditions for the establishment of a primary employer – sub-employer relationship”, this matter is expressed as follows: “There should also be the primary employer’s own laborers who work in the production of goods and services at the workplace” (art.4/a).

Likewise, in the jurisprudences of the Supreme Court of Appeals that gained stability, the following verdict is established: “A person, who does not employ laborers for a part of the work, assigns the entire work to another person on a turn-key basis and by way of tendering and abandons the work, shall not be qualified as a primary employer” and thus, it is stated that the person who assigns the work on a turn-key basis can be qualified as a contracting authority, not a primary employer.

Furthermore, in another jurisprudence of the Supreme Court of Appeals, the following verdict is established: “In cases where the entire work, i.e. not in a part of the work, is assigned to others as a whole or by dividing it into portions, the work is entirely abandoned in this way and the title ‘employer’ is not held since no insured laborer is employed, the persons who take over such works shall not be qualified as a sub-employer and the persons who transfer these works shall not be qualified as a primary employer” and thus, the concept of contracting authority is clarified. (The 9th Civil Chamber of the Supreme Court of Appeals, the decision dated 11.04.2016 and numbered 14492/4826)

In conclusion, if an employer abandons the execution of a work entirely to another person, in other words, if such employer transfers the work to another employer conditional upon turn-key delivery, the transferor employer shall be qualified as the contracting authority, not the primary employer, and a primary employer – sub-employer relationship is not established within this context.