When an employer in Turkey discovers that an employee has acted dishonestly, a six working day period begins. Miss it and the right to terminate for just cause is lost, along with the argument that no severance is payable. Almost everything else in a fraud investigation can be done later; this cannot.
This page covers that deadline and how it is actually counted, what can and cannot be gathered as evidence under Turkish law, where losses concentrate in Turkish companies, and the four separate tracks a case runs on once the facts are established.
The Six Working Day Rule
Under the Labour Law, where a party relies on conduct contrary to rules of morality and good faith, the right to terminate must be exercised within six working days of the other party learning of the conduct, and in any event within one year of the act. Where the employee gained a material benefit from the act — which is the fraud case — the one-year outer limit does not apply.
The period does not start when a colleague notices something, and it does not start when suspicion first arises. It starts when the body authorised to terminate learns of the conduct — in practice the board, or the disciplinary committee where the company has one.
That is what makes a proper investigation possible: an employer may investigate a suspicion, and the six days run from the point at which the authorised body is presented with the conclusion. What it does not permit is knowing the facts and doing nothing while deciding how to proceed. Documenting when the investigation concluded and when the authorised body was informed is therefore part of the investigation, not an administrative afterthought.
Evidence: What Can and Cannot Be Gathered
This is where investigations conducted with good intentions produce findings that cannot be used, and sometimes produce liability for the employer.
| Source | Position |
|---|---|
| Accounting records and documents | The company’s own records; freely examinable |
| Corporate email and systems | Examinable only where employees were informed in advance that they may be monitored, the purpose is legitimate and the examination is proportionate to it |
| Personal accounts and devices | Not examinable by the employer |
| Camera recordings | Usable where the recording itself complies with notification and purpose limitation requirements |
| Interviews with employees | Permitted; the record should be signed and the employee should not be pressured into a statement |
| Third-party confirmations | Suppliers and customers can be asked to confirm transactions, with care over what is disclosed to them |
| Personal data generally | Processing requires a lawful basis, prior notification and proportionality; an investigation does not suspend those requirements |
An employer that reads an employee’s corporate mailbox without having informed staff in advance that monitoring may occur is likely to find that the evidence is challenged and that the employer itself has a data protection problem. The requirement is prior notification and a proportionate purpose, and neither can be created retrospectively.
This is the single most common reason a well-founded case becomes difficult to prove. Companies that put a monitoring and acceptable use policy in place when nothing is wrong have the option available when something is; companies that do not, discover it in the week they can least afford to.
Where Losses Concentrate in Turkish Companies
| Area | How it typically works |
|---|---|
| Purchasing | A supplier connected to the person approving the purchase; prices above market with the difference shared; invoices for goods never delivered |
| Cash collection | Collections taken and recorded late or not at all, covered by the next collection — the balance grows until a reconciliation catches it |
| Payroll | Personnel on the records who do not work, overtime approved without records, or wages declared at one level and paid at another |
| Inventory | Goods removed and written off as waste or breakage; scrap sales not recorded |
| Fictitious documents | Invoices obtained from entities that do not carry on real activity, to create cost or to withdraw funds |
| Discounts and rebates | Customer discounts granted outside authority, with part returned to the person granting them |
| Expense claims | Individually small, persistent, and rarely reviewed because each item is below the threshold anyone looks at |
| Subcontractor arrangements | Work invoiced but not performed, or performed by the company’s own staff and invoiced as external |
Where the scheme involved invoices from entities not carrying on real activity, the company faces a tax position independently of the loss it suffered. Input tax deducted on those documents is disallowed and the expense is not deductible, with the assessment and penalties that follow.
Being the victim of an employee’s scheme does not remove that exposure. This is why the tax analysis belongs in the investigation from the start rather than after the employment and criminal questions have been settled — the numbers found determine the tax position as much as they determine the claim against the employee.
Four Tracks, Running in Parallel
Once the facts are established the case splits. The tracks have different deadlines, different standards of proof and different decision-makers, and treating them as one sequence is how deadlines are missed.
Termination for just cause, with the written defence obtained and the decision taken within the period. This track has the shortest deadline and is the one that cannot be recovered if missed. Severance and notice entitlements turn on it.
Depending on the conduct, offences such as abuse of trust, fraud and document forgery may be engaged. The complaint is a matter for counsel; the accountant’s role is producing the evidence in a form the file can use.
Disallowed input tax, non-deductible expense and the consequences of fictitious documents. Where a voluntary correction is the better route, it has its own timing, and the decision interacts with the criminal track.
A claim against the employee and, where relevant, against those who benefited. Severance entitlements cannot simply be set off against the loss; recovery requires its own proceedings. Any insurance covering employee dishonesty should be notified within the policy period.
Statements taken in the employment process become part of the criminal file. Figures produced for the tax analysis become part of the civil claim. Decisions taken quickly on one track without regard to the others create inconsistencies that the other side will use.
The practical answer is to establish the facts once, thoroughly, and then act on all four tracks from the same set of findings — while respecting the fact that only one of them has a six day deadline.
How an Investigation Runs
- Secure access and records before anything elseSystem access, documents and physical materials preserved before the person concerned knows an investigation is under way. This is the only step where speed matters more than process.
- Define the questionA specific allegation, a specific period and specific accounts. Investigations scoped as “look into the purchasing department” produce cost without conclusions.
- Reconstruct the transactionsFollowing the money through the records: what was approved, what was paid, what was received, and by whom. The reconstruction is what establishes both the amount and the mechanism.
- Quantify the lossSeparating the loss from the tax consequence and from amounts that were properly due. The figure has to survive scrutiny in three different forums.
- InterviewsConducted after the documents are understood rather than before, so that answers can be tested. Records signed, and the employee’s written defence obtained within the employment deadline.
- ReportFindings, the evidence supporting each one, the quantification and its basis, and the control failure that permitted it. Written so that it can be handed to counsel without rewriting.
- Close the gapThe control that failed is identified and changed. An investigation that ends with a dismissal and no control change leaves the same opening for the next person.
Common Mistakes
- Letting the six working days pass while deciding what to do. The right to terminate for just cause is lost and cannot be recovered.
- Confronting the person before securing access and records. Documents and system access disappear in the hours after the first conversation.
- Reading corporate email without a monitoring policy in place. The evidence is challenged and the employer acquires a data protection problem of its own.
- Examining personal accounts or devices. Outside the employer’s reach whatever the suspicion.
- Interviewing before the documents are understood. Answers cannot be tested and the opportunity is spent.
- Treating the tax position as someone else’s problem. Disallowed input tax and non-deductible expense follow the company even as the victim.
- Setting off the loss against severance entitlements. Recovery requires its own proceedings rather than a deduction.
- Dismissing the person and changing nothing. The control that failed is still open for whoever holds the role next.
Frequently Asked Questions
How long does an employer have to terminate for just cause after discovering fraud?
When does the six day period start?
Can an employer examine an employee’s corporate email?
Does the company still have a tax exposure if it was the victim?
Can the loss be deducted from the employee’s severance?
What should be done first when fraud is suspected?
Will the statutory audit detect fraud?
What can be done to reduce the risk beforehand?
As the Ozbek CPA team, we carry out the financial side of fraud examinations in Turkey — reconstructing transactions through the records, quantifying the loss on a basis that holds up in more than one forum, assessing the company’s own tax position arising from the scheme, and documenting findings in a form counsel can use. Legal steps, including any criminal complaint and civil claim, are matters for lawyers and we work alongside them rather than in their place. See also our pages on internal audit, auditing in Turkey and due diligence. Contact us.
