NEWSLETTER-2019-metin

58 NEWSLETTER 2019 will focus on the transfer of employees and, therefore, their rights and claims, under cases of either full or partial spin-offs. Transfer of Employees in Spin-offs Spin-offs are fundamentally different in nature compared to ac- quisitions or mergers. As mentioned previously, in spin-offs, certain assets, contracts and employees are automatically transferred to the transferee company. Accordingly, in spin-offs, any rights, benefits and claims that transferred employees may have against the transferor company are also transferred to the transferee company. Therefore, it is crucial for the transferor company to select the employees to be transferred. Transfer of Employees in Spin-offs Pursuant to Labor Law numbered 4857 Due to the specific restructuring nature of spin-offs, and with the aim to protect the employees under such transactions, both Labor Law numbered 4857 (“Labor Law”) and the TCC have specific provisions in relation to the transfer of employees’ rights. Accordingly, Article 6(1) of the Labor Law stipulates that “when, due to a legal transaction, the establishment or one of its sections is transferred to another person, employment contracts existing in the establishment or in the section transferred on the date of the transfer shall pass on to the transferee with all the rights and obligations in- volved”. As observed, pursuant to this Article, the transferee company is under an obligation to acquire the transferred employees’ rights and obligations under any type of transaction that includes the transfer of employees. In such a case, all rights of the employee shall continue considering the date upon which he/she first commenced working for the transferor company. This specific protective provision under the Labor Law is only natural, since an employee who has been work- ing at a company for over 15 years should not be regarded as newly employed in the transferee company. Accordingly, in such a case, that employee may lose benefits, such as seniority, severance payments, and holidays within the company. The protection is so important that if the transferee company fails to meet its obligations with regard to the