Abstract:

If there is an employment agreement between the director and the company, issues regarding compensation shall be dealt with in accordance with that agreement. If there is no such agreement and the legal relationship between them cannot be interpreted to be an employment agreement, Article 316 of the Turkish Commercial Code stipulates that the dismissed director cannot claim compensation for unjust dismissal on the basis of general provisions. In case of dismissal of the delegate member/director, it is necessary to look into the agreement between the company and the delegate member/director to resolve compensation claims. If the agreement between the company and the delegate member/director is an agency agreement, the delegate member/director may claim compensation from the other party for his dismissal at an inappropriate time on the basis of general provisions (Code of Obligations, art. 396/II). In case the agreement in question is an employment agreement, claims for compensation shall be dealt with in accordance with the provisions of that agreement. If there is no employment agreement between the director or the delegate member/director and the company, or if the agreement between these two parties cannot be interpreted to be an employment agreement, provisions regulating the agent agreement shall be applicable. If it is not possible to understand the nature of the agreement between the directors appointed according to Turkish Commercial Code, art. 342 and the company, then the legal relationship between these two parties shall be interpreted as an employment agreement. In the latter case, the dismissed director shall be entitled to “notice and seniority compensation,” regardless of whether he is a shareholder of the company. If there is an agent agreement between the directors and the company, then a distinction must be made in accordance with Turkish Commercial Code, art. 344. If the director is a shareholder of the company, he will not be able to claim damages for unjust dismissal on the basis of general provisions. If, on the contrary, the director is not a shareholder of the company, then he will have a right to claim such compensation

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