When Can a Subcontractor Be Employed? What Are the Possible Risks?

 

 

What Is the Subcontractor Relationship?

 

Under the Labour Law No. 4857 (Turkey), a principal employer–subcontractor relationship arises when certain tasks related to the production of goods or services in a workplace are assigned to another employer.

 

This relationship occurs when an employer transfers auxiliary tasks related to production or services, or a specific part of the main work, to another employer due to operational needs and technological reasons requiring specialized expertise. The subcontractor employs workers specifically for this job, and these employees work only at the workplace where the job has been assigned.

Auxiliary work refers to activities that are connected to the production or service process but are not directly part of the core production organization. These tasks continue as long as the main activity continues and remain dependent on it.

Main work, on the other hand, is defined as the core activity that forms the basis of the goods or services produced by the business. A part of the main work may only be assigned to a subcontractor if it requires specialized expertise due to the nature of the work and the needs of the business.

 

 

Legal Notification and Contract Requirements

 

According to the legislation, a subcontractor must complete workplace registration by submitting a written subcontracting agreement made with the principal employer along with the required documents.

The contract must clearly include the following elements:

• The definition of the main activity carried out in the workplace
• The scope of the work assigned to the subcontractor
• The rights and responsibilities of the parties
• Information about the work organization and employees

These requirements are regulated under the Subcontracting Regulation (Turkey).

 

 

Risks and Liabilities in a Subcontracting Relationship

 

Once a subcontracting relationship is established, joint liability arises between the principal employer and the subcontractor. This means that both parties may be held responsible for certain legal and financial obligations.

The main risks include:

 

 

Social Security Premiums

 

If the subcontractor fails to pay the social security premiums of its employees, the principal employer may also be held responsible before the Social Security Institution of Turkey

 

 

Employee Receivables

 

 

If the subcontractor fails to pay wages, severance pay, notice pay, or other employment-related receivables, employees may also claim these rights directly from the principal employer.

 

 

Work Accidents and Occupational Diseases

 

In the event that subcontractor employees experience a work accident or occupational disease, both the subcontractor and the principal employer may be held responsible for compensation claims and other liabilities.

 

Occupational Health and Safety Responsibilities

 

If adequate occupational health and safety measures are not implemented in the workplace, managers or authorized personnel of the principal employer may also face legal responsibility.

Therefore, it is not sufficient to only establish the subcontracting relationship through a written contract; the actual practices in the workplace must also comply with the law.

 

 

What Is Collusive Subcontracting?

 

 

One of the most common issues encountered during inspections or legal disputes is collusive subcontracting. This occurs when a subcontracting arrangement is formally established but does not reflect the real working relationship.

 

Situations that may be considered collusive include:

 

• Assigning parts of the main work that do not require specialization to a subcontractor
• Establishing a subcontracting relationship with individuals who previously worked at the same workplace
• Rehiring the principal employer’s employees through the subcontractor while restricting their rights
• Creating contractual arrangements aimed at avoiding legal obligations or limiting employee rights

 

 

Legal Consequences of Collusive Subcontracting

 

If an inspection determines that the subcontracting relationship is collusive, the subcontracting contract is deemed invalid. In such cases, the workers employed by the subcontractor are considered employees of the principal employer from the very beginning.

 

As a result:

 

• The number of employees may increase retroactively
• Obligations such as employing disabled workers may arise
• Requirements to appoint occupational safety specialists and workplace physicians may apply

 

Employees may also claim retroactive wage differences, social benefits, and other employment-related receivables.

Additionally, if social security notifications were incorrectly submitted, administrative fines may be imposed due to missing or late declarations.