Constitutional Court’s Annulment Decision on Article 27 of Law No. 5718 and the Limitation of the Freedom of Contract in Governing Law Provisions and Its Effects on the Maritime Sector

The Constitutional Court, in its decision dated November 5, 2024 (2023/158 E., 2024/187 K.), ruled that Article 27, paragraph 1 of Law No. 5718 on Private International Law and Procedural Law is unconstitutional and annulled the provision. This decision was published in the Official Gazette on March 10, 2025, and will come into effect on September 10, 2025.

Article 27(1) of Law No. 5718 on Private International Law and International Civil Procedure was previously structured as follows:

“Employment Contracts ARTICLE 27 – (1) Employment contracts shall be subject to the law chosen by the parties, provided that the minimum protection to which the employee is entitled under the mandatory provisions of the law of the habitual place of work is preserved…”

With this annulment decision, the possibility for parties to freely choose the applicable law in employment contracts with foreign elements has been eliminated. The Constitutional Court, citing that the employee is the weaker party in employment contracts, evaluated that unilateral choice of law in favor of the employer disrupts the balance in the employer-employee relationship. The Court emphasized the state's obligation to protect employees and concluded that the free choice of law by the parties would not provide adequate protection to the employee.

Once the decision takes effect, regardless of the law chosen in the employment contract, the provisions granting greater protection to employees will take precedence. Employers will no longer be able to unilaterally impose a foreign legal system that does not grant employees broader rights. Consequently, even if a foreign law is selected in the employment contract, its effect will be limited compared to the employee rights guaranteed under Turkish law. Turkish courts will have jurisdiction over disputes, ensuring that the minimum protection standards for employees are upheld, even in cases where the parties have chosen a different governing law.

This decision is expected to have significant consequences for the maritime sector. Particularly for Turkish seafarers working on foreign-flagged vessels, the fact that a foreign law has been chosen in their employment contracts will not override the protective provisions of Turkish law. This change will enhance job security for seafarers by preventing employers from unilaterally imposing foreign legal systems that favor their interests.

The Constitutional Court’s decision has significant implications for employment contracts in the maritime sector, particularly for seafarers. This decision will also have important consequences for foreign seafarers working on Turkish-flagged vessels. Turkish courts will consider the minimum protection standards provided to employees and limit the employer's attempt to benefit from a less protective system through a choice of law. This will contribute to the protection of seafarers' social rights and improve their working conditions.

Furthermore, the prioritization of Turkish labor law in employment contracts will strengthen the jurisdiction of Turkish courts in employer-employee disputes. Companies operating in the international maritime transport sector will need to review their existing employment contracts and revise any provisions concerning the choice of law. Employers must assess employee protections in line with Turkish law, ensuring compliance with the new legal framework.