Transfer of Undertakings and the Limits of Employee Protection: Turkey and the United Kingdom Beyond the EU Directive 2001/23/EC

Abstract

The transfer of undertakings (TUs), whether by sale, merger, outsourcing, or comparable restructuring, poses a persistent challenge to employment law in terms of how to reconcile an employer’s freedom to reorganise its business with the protection of employees. This article compares the United Kingdom’s (UK’s) and the Turkish responses to that tension, asking how far Turkish law has converged with a regime derived from Council Directive 2001/23/EC despite Turkey’s non-membership in the European Union, and how far it still diverges in practice. The article examines TU-related provisions in both countries: Article 6 of Turkish Labour Act No. 4857 and the Transfer of Undertakings (Protection of Employment) Regulations 2006 in the UK. It considers the constituent elements of an undertaking, the circumstances in which an economic entity retains its identity, and the consequences for employees and employers in each jurisdiction. Substantial structural convergence emerges. Both treat the transfer as substituting the identity of the employer rather than terminating the employment relationship; both exclude the protective regime where the transfer occurs in insolvency-driven liquidation; both construe the underlying legal transaction broadly; and both resist reducing the identity of the economic entity to any single criterion, relying instead on a multifactorial and casuistic assessment. Beneath this shared architecture, however, material differences leave Turkish employees comparatively less protected. Turkish law remains fragmented across several statutory instruments rather than consolidated; its case law approaches identity through the undertaking’s essential, property-linked elements rather than through the more developed UK inquiry into the qualification, skill, and intensity of the workforce; it affords no general right to object to a transfer, the sole exception being confined to mergers, divisions, and conversions of commercial companies; and it imposes no duty to inform or consult employees or trade unions in advance. Turkish law is stronger in one respect only: its broad, automatic joint and several liability for pre-transfer claims, as against the narrowly circumscribed UK position. The article concludes that targeted reform is warranted: consolidation of the provisions, extension of the right to object, and the introduction of a genuine information and consultation duty. Such reform would bring Turkish practice closer to the UK protective standard without departing from the conceptual framework the two systems already share.