A recent amendment to the International Private and Procedural Law (“IPPL”) clarifies whether the parties to an employment contract can agree on a choice of law and the safeguards available to the employee in such cases.
The amendment addresses the legal gap that was expected to result from the Constitutional Court’s annulment of the first paragraph of Article 27 of the IPPL, which permitted parties to choose the applicable law in employment contracts with a foreign element. The Constitutional Court ruled that this paragraph restricted the application of a law more closely connected to the employment contract, which could potentially offer greater protection to the employee. For more detail on the Constitutional Court’s annulment, see our recent client alert.
Accordingly, the amendment seeks to safeguard the employee by allowing the law most closely connected to the employment contract to be applied even if the parties have made a choice of law, provided that the employee continues to benefit from the minimum protection guaranteed by the mandatory provisions of the law of their habitual workplace. In this respect, the legislature reintroduced the annulled paragraph while adding a safeguard for cases where the parties have made a choice of law: courts may assess whether there is a law more closely connected to the employment contract and, if so, judges are granted the discretion to apply that law instead of the one chosen by the parties.
This amendment directly addresses the Constitutional Court’s concerns on the imbalance of power in employment relationships and the need to safeguard employees against the undesirable effects of unrestricted choice of law.
The amendment was published in the Official Gazette on 4 June 2025 and entered into force on the same date.
Please contact us for further guidance on the potential impacts of this amendment on your employment contracts.