Dismissed for 'Operational Reasons'? The Criteria That Win Reinstatement Lawsuits

The number of employees dismissed on grounds of "operational necessity" or "organizational downsizing" grows year by year. But the fact that the employer invokes this ground does not mean the termination will automatically be deemed valid. The Yargıtay (Court of Cassation) subjects employers to quite strict scrutiny in operational dismissals. In this article, we explain the criteria against which operational-dismissal claims are assessed in reinstatement lawsuits, in light of current Yargıtay case law.

Why This Matters

For a dismissed employee, the phrase "operational necessity" often looks like a final and unchallengeable justification. Yet employment law reviews whether the employer took such decisions arbitrarily, whether it applied its selection criteria objectively, and whether it truly treated dismissal as a last resort. Not knowing about this scrutiny can lead an employee facing an invalid termination to give up on pursuing their rights.

Summary of the Situation (A Typical Scenario)

An employee has long been working on a particular project. The employer announces that the project will be "downsized" and will continue with only a single employee, and notifies the employee that their employment contract has been terminated for operational reasons. The employee files a reinstatement lawsuit. During the proceedings, it emerges that in the employer's internal correspondence and productivity reports this employee was not actually on the list of those to be dismissed, while the file nevertheless contains some earlier criticisms of their performance. It is also unclear by what objective criterion the employer selected the other employee who remained on the project.

The Legal Issue

Under Article 18 of the Labor Law, when terminating an employment contract the employer must show a valid reason arising from the employee's performance or conduct, or from the requirements of the enterprise, the workplace or the work. However, "showing a valid reason" and "proving that this reason is genuine and consistent" are two different things. The dispute centers on whether the operational justification put forward by the employer is truly concrete, consistent and free from arbitrariness.

What Does the Yargıtay (Court of Cassation) Say?

Being Bound by the Ground Stated in the Termination Notice

A decision of the Yargıtay (Court of Cassation), 22nd Civil Chamber (2012, E. 2012/19800, K. 2012/22006) holds the employer bound by the ground stated in the termination notice; the employer cannot put forward a new additional justification (for example, poor performance) at the litigation stage. Accordingly, if the termination notice states "operational reasons," the employer cannot later recast it as "it was actually a performance problem."

Consistency of the Operational Decision and Review for Arbitrariness

• Yargıtay (Court of Cassation), 9th Civil Chamber (2016, E. 2016/353, K. 2016/21822): Emphasizes that the employer must concretely demonstrate which measures it took and how those measures affected the dismissed employee's job.
• Yargıtay (Court of Cassation), 9th Civil Chamber (2017, E. 2016/23655, K. 2017/15695): Where it is unclear which objective criteria (seniority, performance, competence, etc.) were used in choosing between the dismissed employee and the other employee retained in the same position, this may lead to the conclusion that the termination was arbitrary.
• Yargıtay (Court of Cassation), 9th Civil Chamber (2019, E. 2018/7771, K. 2019/5114): The burden of proving the selection criteria lies with the employer; if that proof cannot be made, the case results in reinstatement.

The Principle That Termination Must Be the Last Resort (Ultima Ratio)

• Yargıtay (Court of Cassation), 9th Civil Chamber (2013, E. 2012/36404, K. 2013/14903): If new personnel were hired into similar positions during or shortly after the termination process, or the employee was not considered for another unit matching their competencies, this leads to the invalidity of the termination.
• Gaziantep Regional Court of Appeal, 8th Civil Chamber (2017, E. 2017/508, K. 2017/401): Having other employees work intensive overtime despite the employer's claim of economic difficulty constitutes a breach of the principle that termination must be the last resort.

Points to Watch

• Examine the ground stated in the termination notice carefully. The employer cannot change this ground or add a new reason to it during the litigation.
• Question whether the selection criteria are concrete. The answer to the question "why me, and not the other employee" must be objective and documentable.
• Request the employer's internal documents (productivity reports, board resolutions, etc.). These documents can reveal whether the stated justification is genuine or inconsistent.
• Check whether the "last resort" principle was applied. Did the employer, before resorting to termination, try measures such as placement in another position, training or the like?
• Performance allegations must not be confused with operational grounds. These two distinct grounds for termination cannot be used interchangeably; whichever the employer chose, it is bound by it.

Conclusion: What Should You Do?

As an employee dismissed on operational grounds, questioning whether that justification is truly consistent and objective is your most fundamental right.

• Examine your termination notice and, if any, the justifications presented by the employer carefully.
• Investigate the situation of other employees in positions similar to yours at the workplace and the selection criteria that were applied.
• Since the period for filing a reinstatement lawsuit is short (generally one month from service of the termination notice), consult an employment law attorney without delay.
• Remember that during the proceedings the burden of proof rests on the employer; your task is to bring to light the inconsistencies in the justification presented.