Employment Law

Transfer of an Undertaking: What Happens to Your Service and Your Claims

· 4 min read · Av. Saliha Senem Mercan
Transfer of an Undertaking: What Happens to Your Service and Your Claims

This is the English version of a Turkish article. The original, with further detail and linked petition templates, is at İş Yeri Devrinde İşçinin Hakları.

On the transfer of an undertaking, employment contracts pass automatically to the transferee with all their rights and obligations, and the employee's length of service is not reset. A transfer is not, by itself, a just cause for termination by either side. For employment claims that arose before the transfer, the transferor remains liable alongside the transferee for two years (Article 6 of the Labour Act).

The business you work for has been sold or transferred to another company. “The new company is taking me on — does my service start again?” is a reasonable worry.

Article 6 answers it clearly, and it protects the employee. This article sets out the rule and its limits.

What Happens to the Contracts?

Under Article 6, where an undertaking or part of one is transferred to another person by a legal transaction, the employment contracts existing at the date of transfer pass to the transferee with all their rights and obligations.

The transfer happens automatically: no separate agreement is needed and the employee's consent is not required.

A frequent mistake in practice is for the transferee to have the employee sign a new contract showing the date of transfer as the start of employment. That does not reset the length of service — the Act says the opposite.

Is Length of Service Reset?

The Act is explicit: for rights that depend on length of service, the transferee employer must proceed by reference to the date the employee started work with the transferor.

So for severance pay, annual leave and notice periods — every right measured by service — the original start date governs.

A date in a new contract signed after the transfer therefore does not determine your service. Keep the social security records showing your original start date and your earlier contract.

The same applies to annual leave: leave accrued before the transfer and not taken passes to the transferee.

How Long Does the Former Employer Remain Liable?

The Act gives the employee a double protection: for debts that arose before the transfer and were payable at the date of transfer, the transferor and the transferee are liable together.

That liability is not unlimited: the transferor's liability lasts two years from the date of transfer.

In practical terms: where you have accrued wages, overtime or leave pay from before the transfer, you may pursue both the old and the new employer within two years. After two years, only the transferee.

The provisions on joint liability do not apply where a legal person ceases to exist through merger, accession or a change of type.

The consequences of a transfer
MatterPosition
Employment contractsPass automatically to the transferee, with all rights and obligations
Length of serviceCalculated from the original start date; not reset
Annual leave accruedPasses to the transferee
Claims arising before the transferTransferor and transferee liable together
The transferor's liabilityLimited to two years from the transfer
Transfer as a ground for terminationNot a just cause for either side
Merger, accession or change of typeJoint liability does not apply

A new contract signed after the transfer does not reset service; the social security record of the original start date is the evidence.

Can the Transfer Itself Justify Termination?

No. The Act states that neither the transferor nor the transferee may terminate an employment contract on the ground of the transfer alone, and that the transfer is not a just cause for the employee to terminate either.

That does not prevent termination for reasons arising from economic and technological requirements or from a change in the organisation of work, nor termination for just cause.

So a dismissal presented as “the business has been sold” is an invalid termination, and the ordinary consequences follow: an employee within the scope of job security may bring a reinstatement claim, and one outside it may claim notice pay and severance pay.

What to Keep

  • the original employment contract and any subsequent ones
  • the social security record of insured employment, showing the original start date
  • payslips from before and after the transfer
  • any documents about accrued leave
  • the notice of transfer and any correspondence about it

These documents are what defeat an argument that service began again at the transfer.

Signing a new contract does not reset your service

Where a transferee asks you to sign a fresh contract dated from the transfer, your length of service is still calculated from the day you started with the transferor. Keep the social security record that shows it — and remember that the transferor stays liable alongside the transferee for two years for anything that accrued before the transfer.

Frequently Asked Questions

Does my service start again when the business is sold?

No. Rights that depend on length of service are calculated from the date you started with the transferor, whatever a new contract says.

Do I have to consent to the transfer?

No. Employment contracts pass automatically with all their rights and obligations; no separate agreement and no consent is required.

Who is liable for money I was owed before the transfer?

Both employers together. The transferor's liability lasts two years from the date of transfer; after that only the transferee.

Can I be dismissed because the business was transferred?

No. The transfer alone is not a just cause for either side. A dismissal on that ground is invalid and the ordinary consequences follow.

What documents should I keep?

Your original contract, the social security record showing your start date, payslips from before and after the transfer, leave records, and any notice of the transfer.

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