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In this study, we examine employers' manipulations of the wage payroll. In line with Court of Cassation (Yargıtay) decisions, we explain the concept of “payroll fraud” and assess the legal and administrative consequences of such practices. In particular, we show that payrolls in which the overtime column has been left blank are not, on their own, regarded as evidence, even where they have been signed by the employee.
The wage payroll and the wage slip are official documents that record the employee's wages and wage-related entitlements, working hours, overtime, work on national and public holidays, bonus payments and statutory deductions from wages. These documents are of great importance both for the employer's performance of its obligations and for ensuring that the employee's rights can be monitored. Under Article 238 of the Tax Procedure Law No. 213, the employer is required to prepare a wage payroll and to show the statutory deductions clearly in the payroll. In parallel, under Article 37 of the Labour Law No. 4857, when making wage payments to the employee, the employer must give the employee a wage slip stating what the wage is paid for and which deductions have been made.
In Court of Cassation practice, the content of the wage payroll is examined not only formally but also for material accuracy. In particular, where the wages to which employees are entitled for overtime, weekly rest days, and work on national and public holidays are not clearly shown in the payroll, or where such payments are reflected as if they were part of the employee's base wage, the payrolls in question are regarded as fraudulent payrolls. In this context, where it is established that the accruals made by the employer on the payroll, such as overtime, national and public holiday (UBGT) work or bonus payments, do not in fact correspond to actual work but are split-up reflections of the employee's basic wage, the Court of Cassation characterises this practice as “payroll fraud”. In such a case, it is accepted that the employer did not pay the employee for overtime or holiday work performed and nevertheless resorted to fraud by showing such work on the payroll as though it had been paid, and this is assessed in the employee's favour, so that no credence is given to the payroll.
The purpose of this study is to set out the content of the concept of “payroll fraud” within the framework of the decisions given by the Court of Cassation concerning employers' manipulative acts relating to the wage payroll, and to assess the legal and administrative sanctions arising from such practices. Where the wage payroll contains an overtime column but this column has been left blank, the fact that the payroll has been signed by the employee does not, on its own, constitute evidence against the employee. In such cases it is possible to prove the contrary of the payroll's content by any kind of evidence, including witness statements.
In its decision dated 29.05.2019, File No. 2017/8459 E., Decision No. 2017/12501 K., the 22nd Civil Chamber of the Court of Cassation (Yargıtay) held that;
“…In the concrete case, it is understood that the claimant worked at the defendant's workplace as a loader operator between 21.07.2010 and 28.12.2012. The case file contains payrolls for the claimant's period of service whose signature is not disputed by the claimant employee and which include an overtime accrual. Taking this into account, the court dismissed the overtime claim. However, it has been seen that, although in some months the payrolls were signed by the claimant employee and included an overtime column, the said column was blank and no accrual had been made, and that the amount in the payroll had been paid through the bank. In that case, the signed payrolls cannot be taken into account for months of this nature; whereas it should have been determined whether overtime was worked by hearing impartial witnesses bearing no hostility towards the parties for those months, and a decision should have been given accordingly, the failure to observe this is erroneous and necessitates reversal.”
Under this decision, with respect to payrolls in which the overtime column is blank or no accrual has been made, those payrolls are not accepted as conclusive evidence even if they bear the employee's signature. The accuracy of the content of such payrolls must be established in the dispute between the parties by various kinds of evidence, above all independent and impartial witness statements. Under this approach, the employer's submission of the employee's signature as evidence without showing overtime accruals in the payrolls is regarded as restrictive of the employee's rights. In conclusion, as regards overtime receivables, the content of the wage payrolls must be examined concretely, and any deficiencies or gaps in the payrolls must be interpreted in the employee's favour.
Another problem frequently encountered in practice is that the accruals shown in wage payrolls for overtime remain at a symbolic level. By using this method, employers try to prevent employees from claiming their overtime pay. However, the fact that overtime accruals are symbolic does not prevent the employee from proving his or her receivable. The employee may prove the overtime pay claim with any evidence in his or her possession. In this case, the amount stated in the payroll is not treated as conclusive evidence; set-off must be applied rather than exclusion.
In its decision dated 8 June 2020, File No. 2016/27594 E. and Decision No. 2020/5017 K., the 9th Civil Chamber of the Court of Cassation (Yargıtay) drew attention to the following points:
“…Where it is understood that overtime pay was paid in the signed payrolls, unless there is payroll fraud, the employee must prove with written evidence that he or she actually worked more overtime. However, if the employee has stated in a reservation of rights (ihtirazî kayıt) that the overtime receivable is greater than what is written in the payroll, overtime may be proved by any kind of evidence. If there is no fraud in the payroll, overtime wages have been paid and no reservation of rights has been entered, the months paid must be excluded for overtime established by witness statements; otherwise, these payments are set off. In other words, if employers have made symbolic accruals in order to prevent employees' overtime claims, these months are not removed from the calculation, but the overtime wages paid are deducted from the receivables. The court must calculate the overtime receivables on the basis of the accepted wage, set off the amounts in the payrolls, obtain an expert report suitable for review and give its decision also taking into account a discretionary reduction on the claim.”
According to this decision, overtime accruals shown symbolically must be taken into account to be set off when calculating the employee's receivable, and the calculation must be supported by any kind of evidence.
In conclusion, if wage payrolls bearing the employee's signature contain overtime accruals, the scope of such work must be demonstrated concretely with written evidence, in particular attendance records or documents prepared by the employer. In practice, however, it is seen that employers abuse this arrangement by reflecting symbolic overtime amounts in the payroll. In such cases, rather than completely excluding the symbolic accruals in the payroll from the calculation of overtime receivables, setting them off against the actual receivables would be more consistent with the principles of justice and equity.
