Transfer Fee: Legal Characterization and Practical Application 16 September 2025

2. Definition and Nature
 

According to the Court of Cassation, in the context of labor law, a transfer fee is not a direct consideration for the employee's services or work performed. Rather, it is a monetary obligation undertaken by the employer wishing to transfer the employee, taking into account the employee's past achievements and anticipated future contributions to the workplace. The parties are free to agree upon such a payment.
 

Since the transfer fee is not paid in exchange for work, it does not constitute wages or a wage supplement (such as bonus, premium, or travel allowance). Legally, it is a one-time, contractual debt. In this respect, it may also be characterized as a signing bonus or signing fee.
 

Court of Cassation, 22nd Civil Chamber, Case No. 2013/17798, Decision No. 2015/5088
 

"The transfer fee is a one-time payment made in consideration of the employee's past performance and future contributions to the employer. In this respect, it cannot be classified as wages or a wage supplement."
 

Court of Cassation, 9th Civil Chamber, Case No. 2007/29896, Decision No. 2009/6771, 12.03.2009
 

"The legal nature of wages and their supplements on the one hand, and transfer fees on the other, are different. The mere use of the term 'transfer fee' does not render it wages."
 

3. Independence from Working Period
 

The transfer fee is not a right accrued as a result of the employee's service over a certain period; it is an immediate performance. The employee is not required to remain in employment for a specific period to be entitled to the payment. Accordingly, even if the employee leaves the job shortly after receiving the fee, this does not invalidate the right.
 

Court of Cassation, 7th Civil Chamber, Case No. 2013/14110, Decision No. 2013/15342, 24.09.2013
 

"The transfer fee is an immediate performance and is not contingent upon the employee's service for a certain period. Therefore, even if the employee leaves the workplace before the agreed period, the transfer fee must still be paid in full."
 

Court of Cassation, 9th Civil Chamber, Case No. 2007/36468, Decision No. 2009/9154, 01.04.2009
 

"The transfer fee must be paid in its entirety, irrespective of the length of service."

4. Statute of Limitations
 

Since the transfer fee is not among the types of remuneration regulated under the Labor Code, it is not subject to the five-year limitation period applicable to wages, but instead to the general ten-year statute of limitations under the Turkish Code of Obligations.
 

Court of Cassation, 9th Civil Chamber, Case No. 2007/29896, Decision No. 2009/6771, 12.03.2009
 

"For the reasons stated above, the transfer fee is subject to the ten-year statute of limitations provided for in Article 125 of the Turkish Code of Obligations."
 

5. Competition Law Dimension
 

One of the most controversial aspects of transfer fees concerns their implications under competition law and labor law. The purpose of a transfer may not be to harm the employee's current workplace, to deprive the employer of qualified personnel, or to damage the reputation of a competitor. In such cases, the new employer's liability for breach of competition restrictions may arise.
 

Court of Cassation, 22nd Civil Chamber, Case No. 2013/17798, Decision No. 2015/5088, 17.02.2015
 

"Employee transfer agreements may not be concluded with the purpose of causing an employee of another employer to resign, for example to deprive that workplace of qualified personnel, or to enhance the reputation of the transferring business by hiring a successful employee. Similarly, transfers may not be made solely to benefit from the knowledge, experience, skills, and performance of an employee working in any department or position of another business.
 

Employee transfers may not be carried out with the intent to harm the workplace where the employee is currently engaged."