DoesThe Employer Have To Increase Wage? What Are The Consequences Of The Arbitrary Practices About This Matter?
Av. Alper YILMAZ
Wage is one of the main factors of an employment relationship. The Turkish Labour Code introduces highly important provisions with regard to the wage payment. Sometimes, the wage is not enough within the framework of inflation or living conditions; the employee comes to demand increase or have an expectation of increase for the sake of meeting his/her needs.
Does the employer have to increase the wage of employee?
First of all, let us point out the rule:
Unless the employer made a commitment about increasing the wage by a contract or a collective labour agreement, he or she does not have to increase the wage of the employee.
Within this scope, if the employer made a decision towards not increasing the wage in the workplace, then this situation would not grant the employee the right to terminate his/her labour contract a valid reason.
Hence, this subject is explained in the decision dated 03.10.2003 with the decision no. 2003/16024 K. & file no. 2003/3506 E. by the Court of Cassation, 9th Civil Chamber as follows:
“The witnesses for the defendant stated that the plaintiff left the workplace by the reason of the fact that his demand for wage increase was not accepted by the employer. One of the witnesses for the plaintiff did not give information about the termination; the other one stated that the employee came to the workplace together with the plaintiff but was not let by the employer enter the workplace. Since it is understood that the witness for the plaintiff, who gave information about the termination, was not an employee of that workplace and that he did not give any concrete information about the date of the incident he witnessed, it is necessary to give credit to the statements of the witnesses for the defendant who work in the workplace and gave information based on their witnessing. Leaving the workplace for the reason that the demand for wage increase is not accepted, cannot be accepted as the reason for termination of the contract according to Article 16 of the Code no. 1475.”
Does the employer have the freedom of increasing the wage of one of the peer employees, not that of the other?
Increasing the wage is a part of the management right of the employer. However, the management right should not mean that the employer take arbitrary and inconsistent actions. It must be remembered that the arbitrary and subjective acts are subject to judicial control.
Based on the “principle of equal treatment” in Article 5 of the Labour Code, we are of the opinion that unless there are reasons arising from the performance and such objective conditions, the employer should not implement different practices among the employees who work in the peer positions. The employer must primariliy notify the employee about which criteria he/she will enforce for the increase to be made in wage; he/she must definitely inform his/her employee if there are any performance-based principles about this matter. If a performance-based wage increase policy is in question, the adequacy level expected from the employee and the adequacy level of the employee at the end of the period must be evaluated objectively, the performance of the employee fundemental for the increase must be determined truly and realistically, considering also the elements such as advenient reasons (economic crisis, narrowing in the sector, etc).
In that case, the reasons which create difference in wage increase must be based on the objective and steady foundations; and arbitrary treatment will constitute contradiction to law.
We shall try to explain the approach of the Court of Cassation about this subject with two precedents.
In the first precedent, it is explained with the following statements that the employee has a right to terminate his/her labour contract immediately on valid reasons if all the employees in the workplace, except him/her, get an increase in their wages as follows:
“From the content of the case file, it is understood that all the employees except the plaintiff got an increase in their wages, and that the defendant and the plaintiff discussed about this matter, that after the defendant employer declared nevertheless that there would be no wage increase for the plaintiff, the plaintiff left the workplace at the end of working hours, left the key to the workplace and terminated his labour contract by not returning to the workplace anymore. It is come to a conclusion that the employer acted against the obligation of equal treatment by increasing the wages of all employees except those of the plaintiff and continued his action in spite of the insistence of the plaintiff; therefore, the plaintiff is right to terminate his labour contract.”
In the next precedent, even though no proof can be found about the unproductivity, increasing one employee’s wage lower than the other comes in question and in that case the termination of the employee who has the lower increase in the wage, is the one with justified grounds. This subject is described as follows:
“According to the information and documents in the case file, it’s understood that in April 2003, all the employees working in the workplace got a 90,000,000 TL-increase however the plaintiff got a 20,000,000 TL-increase, being told that there was decrease in his productivity. However, there is no proof the employer has showing that the plaintiff employee work inefficiently. Because of the fact that the employer increase the wage of the plaintiff lower than other peer employees, the plaintiff has right to terminate his labour contract based on a valid reason. It is understood from the minutes taken by the employer and from the statements of the witness that the plaintiff employee left the workplace there on this statement of the employer. It is necessary to accept the demand of severance pay of the plaintiff employee because of the fact that the termination of the labour contract by the employee is based on the justified ground.”
In that case, as it is clearly seen in the decisions of the Court of Cassation above, the employee does not have to accept the different increase applications between the peer employees in defience of the principle of equal treatment, excluding the obligatory facts such as objective and productivity related reasons. The employee has right to leave job on good grounds by demanding his severance pay in such cases.
In case the employee finds out such a situation, we are of the opinion that it would be appropriate to give notice to the employer first of all which states that the increase policy of the employer is arbitrary and against the law and he must change this policy immediately and pay him the rest of the increase which was paid deficiently otherwise he or she would terminate the labour contract on valid reasons and to act according to the result of this notice.
In consequence; the employer is not obliged to increase the wage of all the employees in the workplace unless he or she made any commitment. On such an occasion, since the demand of increase of the employee is not approved by the employer, the termination of the employee will not be accepted as the one with justified ground and the employee will not have the right to the severance pay.
On the other hand, in case the employer wishes to increase the wages of the employees, he or she must clearly indicate the terms and conditions of this increase; and if he or she has different policies within the scope of department, division and region, he or she must introduce the objective criteria about this matter. One must not infer from this expression that it is necessary to evenly increase the wages of all employees in a workplace. The employer may have different policies about the increase, however just as it is pointed out above, there must be consistent, objective, real reasons suitable for control. The acts of the employer about this subject absolutely must not be arbitrary or subjective. Otherwise, the termination of the employee will become the termination with the justified ground.
 9th CIVIL CHAMBER, Decision Date 01.11.2004, File No. 2004/8671, Decision No. 2004/24558
 9th CIVIL CHAMBER, Decision Date 05.04.2005, File No. 2005/9518, Decision No. 2005/12140