Supreme Court Decisions Regarding Proof of Overtime Pay in Light of Payroll Records

One of the most common labor claims encountered in practice is the claim for overtime pay. In proving an overtime claim, the employee must demonstrate that they worked overtime; the employer, on the other hand, must prove that this overtime work was paid.

In its decision dated 04/11/2020, case no. 2016/30119 E., 2020/14681 K., the 9th Civil Chamber of the Supreme Court stated:

"In labor law, the employee who claims to have worked overtime or on holidays must prove this claim, while the employer must prove that they have paid the corresponding wages."

In practice, the validity of the provisions stating “I have received my overtime pay” in standard employment contracts signed by some employers is non-existent. If proven, the claim for overtime work can be legally recognized.

The employee can prove the overtime work with any type of evidence. However, it is worth noting that according to Article 199 of the Civil Procedure Law, the primary evidence in proving a claim is the document. If a document is absent or lacks the necessary conditions, other evidence can be used to prove overtime work.

According to the established principle decision by the Supreme Court:

“The evidence for proving overtime work includes workplace records, especially documents showing entry and exit from the workplace, and internal workplace correspondence. However, if overtime work cannot be proven with written documents, the case should be resolved based on the testimonies of witnesses. In addition, some generally known facts can also be considered in this context. The nature and intensity of the work actually performed by the employee should also be investigated to determine whether there was overtime work.”

This is also the direction of the decisions of the 9th Civil Chamber of the Supreme Court, case nos. 2015/25462 E., 2018/22543 K., dated 06.12.2018 and 2016/2003 E., 2019/11470 K., dated 20.05.2019.

One of the employer obligations regulated in the Labor Law No. 4857 is to provide the employee with a wage slip. According to the first paragraph of Article 37 titled “Wage Slip”,

“the employer is obliged to give a slip signed or bearing the special mark of the workplace showing the wage account to the employee in payments made at the workplace or to the bank”. This wage slip must separately show “the date of payment, the period it relates to, and any additions to the basic wage such as overtime, weekly rest, public holiday and general holiday wages, and any deductions such as tax, insurance premium, advance offset, alimony, and execution”.

Article 10 of the Regulation on Overtime and Extra Hours Work Related to the Labor Law also states that if the employer makes the employee work overtime, they must prepare a document showing how long the overtime work lasted. This signed document must be kept in the employee's personnel file, and the payment should be made according to Articles 32 and 34 of the Labor Law No. 4857, and these payments must be clearly shown on the payroll and wage slips.

Payroll records, which have a strong evidential value from the perspective of the Supreme Court and host many decisions, are among the most used evidence in proving that overtime work was performed. In other words, payroll records are among the fundamental documents used in labor disputes and litigation.

Various possibilities in the preparation of payroll records can seriously affect the value of this document. Whether or not the payroll includes an accrual for overtime work, whether the accruals are symbolic or not, whether the payroll is signed or not, whether it contains a reservation of rights, and whether there is payroll fraud are factors that affect the evidential strength and value of the payroll.

a) Payrolls with Signatures, Without Reservations, and Showing Overtime Accrual

A payroll bearing the employee's signature and without any reservation is considered definitive evidence until its falsity is proven. The 9th Civil Chamber of the Supreme Court, in its decision dated 02.07.2012, case no. 2010/18174 E., 2012/25327 K., stated:

“The expert report, which was the basis of the court's decision, calculated the overtime pay for the plaintiff based on witness statements, considering 15 hours per week with a 30% deduction for fairness. The overtime pay paid to the plaintiff between 14.6.2004-14.1.2008 was deducted from this amount. According to our chamber's established precedents, an employee who signs the payroll without any reservation needs to prove any claim of working more hours than stated in the payroll with written evidence. There are no reservations in the payrolls signed by the plaintiff in the file. The plaintiff has not been able to prove with equivalent written evidence that they worked more hours than stated in the payroll. Therefore, the decision to calculate overtime pay for months without overtime accrual, excluding the months with overtime accrual in the signed payroll, is erroneous.”

This statement emphasizes that the presence of signed payroll records should be considered conclusive evidence, and that witness statements should not be relied upon when there are months with overtime accrual in the payroll.

A payroll showing overtime accrual and signed without any reservation can be disproven with an equivalent document according to the rule of proof against document. Examples of equivalent documents include workplace records, especially documents showing entry and exit from the workplace, internal workplace correspondence, attendance records, log records, weapon handover and report books. The 9th Civil Chamber of the Supreme Court, in its decision dated 16.04.2012, case no.

2010/5844 E., 2012/12961 K., ruled:

“...the plaintiff has proven that they worked more overtime than stated in the payroll using the attendance records, weapon handover and report books, and internal correspondence found in the file. The expert, taking all the documents into consideration, determined that the plaintiff worked more overtime than stated in the payroll and calculated the overtime pay. Given this situation, and considering the above-mentioned material and legal facts and principle decision, the decision to reject the claim for overtime pay instead of evaluating the expert report is inappropriate.”

This indicates that an employee can prove they worked more overtime than indicated in the payroll with written evidence in the file.

In the presence of payrolls with signatures, without reservations, and showing overtime accrual, if this cannot be disproven with an equivalent written document, an exclusion process is performed in the calculation of overtime work. The 9th Civil Chamber of the Supreme Court, in its decision dated 18.06.2020, case no. 2016/17146 E., 2020/5907 K., stated:

“A payroll bearing the employee's signature is considered definitive evidence until its falsity is proven. In other words, unless the falsity of the payroll is claimed and proven, it is assumed that the overtime pay shown in the signed payroll has been paid. If the payrolls are signed and without any reservations, the employee must prove with a written document that they worked more hours than stated in the payroll. If there is the plaintiff's signature and overtime accrual on the payroll, then the overtime calculation for that month should be excluded.”

This highlights that in the presence of payrolls signed without any reservations, these months should be excluded, meaning they should not be considered in the calculation of overtime work for the respective month.

If the employee contests the authenticity of the payroll, the claim of forgery should be examined. The 22nd Civil Chamber of the Supreme Court, in its decision dated 26.3.2018, case no. 2015/29737 E., 2018/7756 K., stated:

“...The plaintiff's lawyer states in the petition and reiterates in the appeal that some of the signatures on the payrolls do not belong to their client. The plaintiff's objection regarding the signatures on the payrolls not belonging to them has not been considered. The first action by the court should be to clarify which month's payroll signatures do not belong to the plaintiff and conduct a signature analysis by an expert, to unquestionably determine whether these documents were actually signed by the plaintiff…”

This highlights that it is erroneous not to investigate the employee's lawyer's claim that some of the payroll signatures do not belong to their client.

b) Payrolls with Signatures and Reservations, Unsigned with or without Reservations, and Showing Overtime Accrual

If the employee has signed the payroll showing overtime accrual but has made a reservation, or has not signed and has not made any reservations, or has neither signed nor made any reservations, they can prove they worked more overtime than indicated in the payroll with any type of evidence. In short, the legal consequences of these three scenarios are the same in payrolls. The 22nd Civil Chamber of the Supreme Court, in its decision dated 15.11.2018, case no. 2017/17565 E., 2018/24492 K., stated:

“…If it is understood from the signed wage payrolls that the overtime pay has been paid, it is not possible for the employee to claim that they actually worked more overtime. However, if there is a reservation by the employee regarding the claim that their overtime pay should be more, proof of working more than what is indicated on the payroll can be made with any type of evidence.”

This indicates that if there is a reservation, it is possible to prove that more work was done with any type of evidence.

In practice, some of the payroll records submitted by the employer to the file may be signed while others are unsigned. In such cases, while the payrolls of the months with signatures should be taken as the basis, for the months without signatures, all kinds of evidence, including witness statements, can be resorted to.

When there are signatures on the payrolls, an exclusion process is performed, whereas for the months without signatures, a set-off process is conducted. The main difference between the exclusion and set-off processes is that in the set-off process, calculations are made for the month with the signed payroll and the payment made is set off, whereas in the exclusion process, regardless of the amount of payment made, the respective month is not considered in the determination and calculation.

c) Payrolls Signed Without Reservations with Empty or "0" Overtime Accrual Columns

If the payroll includes a column for overtime but this column is empty, i.e., no accrual for overtime work is recorded, or if the overtime column shows “0”, even if the payroll is signed by the employee, it will not constitute evidence against the employee and can be disproven by any type of evidence, including witness testimonies. The 22nd Civil Chamber of the Supreme Court, in its decision dated 29.05.2019, case no. 2017/8459 E., 2017/12501 K., stated:

“...In this case, it is understood that the plaintiff worked as an excavator operator at the defendant's workplace from 21.07.2010 to 28.12.2012. The file includes payrolls, not denied by the plaintiff employee in terms of signature, showing overtime accrual. The court, considering this, decided to deny the overtime pay claim. However, in some months, although payrolls were signed by the plaintiff and contained an overtime column, this column was empty and no accrual was made; and the amount in the payroll was paid through the bank. Therefore, for such months, the signed payrolls cannot be considered, and impartial and non-hostile witnesses should be heard to determine whether overtime work was performed for these months, and a decision should be made accordingly. Ignoring this aspect is erroneous and necessitates reversal.”

This emphasizes that for months where the overtime column in the payroll is empty and no accrual is made, payrolls cannot be considered, even if signed by the employee.

The 9th Civil Chamber of the Supreme Court, in its decision dated 02.07.2009, case no. 2008/3009 E., 2009/18484 K., stated:

“...According to our chamber's established practice, if overtime pay claims are shown as zero (0) in the payroll, not involving any accrual or payment, then the employee, upon proving their work related to these claims, earns the right to overtime pay…”

This indicates that payrolls will not be considered against the employee if the overtime column shows “0”.

d) Symbolic Overtime Payrolls

Another issue frequently encountered in practice is when the accruals for overtime work in payrolls are symbolic. Employers use this method to circumvent the Law and prevent employees from claiming their overtime work.

If the accruals for overtime are symbolic, the employee can prove their claim for overtime work with any type of evidence. In this case, the payroll cannot be regarded as conclusive evidence, and instead of an exclusion, a set-off process is performed. The 9th Civil Chamber of the Supreme Court, in its decision dated 08.06.2020, case no. 2016/27594 E., 2020/5017 K., stated:

“...If it appears from the signed wage payrolls that the overtime pay has been paid, as a rule, unless the payroll is fraudulent, the employee must prove with written evidence that they actually worked more overtime. However, if there is a reservation by the employee regarding the claim that their overtime pay should be more, proof of working more than what is indicated on the payroll can be made with any type of evidence. Moreover, if there is no payroll fraud and the payroll shows that overtime pay has been paid without any reservation, the months with payments should be excluded in determining additional overtime work based on witness statements, otherwise, the payments should be set off. In other words, if the employer makes symbolic overtime accruals to prevent employees from claiming overtime pay, these months should not be excluded from the overtime work calculation, but the payments made for overtime work should be set off against the determined overtime pay claim. The appropriate action is to request an expert report suitable for review from the court, calculate the overtime claims based on the accepted wage, and make a decision after considering the set-off of the amounts written in the payrolls and the issue of discretionary reduction regarding the claim.”

This indicates that in the presence of symbolic accruals, the employee's claim for overtime work should be calculated with any type of evidence, and the symbolic accruals in the payrolls should be included in the calculation by way of set-off.

In the decision of the 9th Civil Chamber of the Supreme Court dated 23.01.2020, case no. 2016/12008 E., 2020/1047 K., it was stated:

“...In the signed wage payrolls submitted to the file, generally, an overtime payment of 50 TL per month is included. Considering the evidence in the file, the payment made is symbolic and far from covering the entire overtime work. Although it is correct to include overtime pay in the judgment, failing to set off the amounts paid is erroneous…”

Furthermore, in another decision dated 18.11.2019, case no. 2016/8503 E., 2019/20065 K., the Supreme Court observed:

“...In the specific dispute, it has been proven with the contents of the file that the plaintiff worked 5.5 hours of overtime per week, and the employer made symbolic accruals in the payrolls against the plaintiff's signature. Since some months included 2-4 hours of overtime accruals, instead of excluding the periods of signed payrolls with accruals, the payment should be set off…”

Highlighting that in cases of symbolic accruals for overtime hours and payments, a set-off process should be conducted.

It should also be noted that the set-off process should be conducted after, not before, the fairness reduction. In the decision dated 05.06.2020, case no. 2016/24784 E., 2020/6770 K., the Supreme Court stated:

“...In this specific dispute; although it is appropriate not to exclude the months from the calculation due to symbolic overtime payments in some of the payrolls, failing to consider setting off the total of overtime accruals in the payrolls against the overtime pay calculated after a reasonable reduction based on inference is erroneous…”

Indicating the necessity of conducting the set-off process after the fairness reduction.

e) Fraudulent Payrolls

The Supreme Court has characterized the practice of paying part of the wage as overtime pay as payroll fraud. In such cases, overtime accruals are not considered, and no set-off process is conducted. In the decision dated 19.06.2019, case no. 2017/11110 E., 2019/13720 K., the Supreme Court ruled:

“...Our chamber considers situations where overtime, weekly rest, and public holiday claims are extremely symbolic or where varying accruals for overtime, weekly rest, and public holidays are made, but the overall paid wage remains the same, as instances where a part of the wage is shown as overtime, weekly rest, and public holiday pay. In the specific dispute, considering the overtime accruals in fraudulent payrolls to reach a conclusion is erroneous. The 1020 TL wage shown in the payrolls should be accepted as the wage itself, and the plaintiff received a net 1020 TL wage. The other claims adjudicated should be recalculated based on this wage amount…”

Emphasizing that when the basic wage is shown as overtime pay, and the total wage remains unchanged, payroll fraud is present, and such payrolls should not be considered.

In another decision dated 05.07.2018, case no. 2015/21075 E., 2018/14840 K., the Supreme Court remarked:

“...As a principle, if the payroll shows accruals and is signed, the rejection of overtime and holiday pay claims is correct unless proven otherwise with documentation. However, according to our chamber's established practice, showing a part of the wage as overtime pay in the payroll (payroll fraud) necessitates the calculation and adjudication of the wage claim for overtime and weekly rest work proven by the employee's witness statements if the amounts shown in the payroll are fixed or if the wage amount is disputed. In such cases, if there is no payroll fraud, the paid amounts should not be excluded but set off…”

Whether a fraudulent payroll is signed or unsigned, whether it contains a reservation or not, or whether the payment is made through a bank does not affect the outcome. Such a payroll is not considered at all in the calculation of overtime pay. The 9th Civil Chamber of the Supreme Court, in its decision dated 28.09.2015, case no. 2014/11074 E., 2015/26460 K., stated:

“...Although the court rejected the overtime pay claim on the ground that it was accrued and paid by the defendant employer, it is understood that the items paid under the guise of overtime work constitute the plaintiff's actual wage. Indeed, the amounts accrued and paid as monthly wages are even below the wage amount confirmed by the plaintiff's witnesses and the wage survey. Therefore, it is inappropriate not to consider the payrolls and not to subject the overtime pay claim confirmed by the plaintiff's witness statements to a reasonable discretionary reduction before adjudication…”

This emphasizes that when payroll fraud is present, the payrolls should not be considered, and overtime work can be proven with any type of evidence.

f) Statements in the Payroll Such as "I Did Not Work Overtime"

In practice, payrolls often contain written statements like “I did not work overtime,” “I received my overtime, I have no overtime claims,” “I received my entitlements, I did not work extra,” and similar. The validity of these statements in payrolls is significant. The 9th Civil Chamber of the Supreme Court has indicated that such records taken during the continuation of the employment contract are invalid. In the decision dated 21.10.2008, case no. 2007/29051 E., 2008/28165 K., the Court stated:

“...The plaintiff has requested the payment of overtime pay, weekly rest pay, and leave pay. The monthly wage payrolls from December 2001 and onwards, bearing the plaintiff's signature, include the statement ‘I did not work overtime, I received my monthly entitlements in full.’ However, these payrolls do not include any overtime accruals. Such expressions added to the payrolls during the employment relationship should be considered invalid. If the plaintiff employee proves that they worked overtime during the mentioned period, they should be able to claim the corresponding increased payment. Even though some of the payrolls for the same period contain statements like ‘I did not work on weekly holidays,’ ‘I did not work on weekly and public holidays,’ ‘I received my monthly entitlements in full,’ these statements should be considered invalid as the employment relationship was ongoing…”

This rules that such records taken during the continuation of the employment relationship are not credible, and the employee can prove overtime work with any type of evidence.

g) Unsigned Payrolls with Overtime Accruals Paid Through the Bank

In practice, in some workplaces, employees do not sign payrolls, but their overtime claims are paid through the bank. In such cases, if the unsigned payrolls with overtime accruals are paid through the bank, the employee can prove they worked more overtime with any type of evidence, and the overtime payments made through the bank should be set off. The 9th Civil Chamber of the Supreme Court, in its decision dated 02.07.2020, case no. 2016/19739 E., 2020/7049 K., stated:

“...Our chamber's established practice is that in cases where unsigned payrolls with overtime accruals are deposited in the bank, the relevant month should not be excluded, but the amount paid for overtime should be set off after a discretionary reduction. Excluding the months with overtime accruals based on unsigned payrolls is erroneous. The court should bring all payrolls and bank records for the accounting period and set off the accruals in the unsigned payrolls for the months with overtime accruals as mentioned above. Choosing exclusion over set-off is incorrect…”

This indicates a change from previous rulings, emphasizing that in cases where overtime claims are paid through the bank, a set-off process should be conducted instead of exclusion.

Similarly, in the decision dated 23.01.2020, case no. 2016/12839 E., 2020/1063 K., the Court ruled:

“...When unsigned payrolls include overtime accruals and the amounts specified in the accruals are paid into the bank account, any overtime work exceeding the accruals can be proven with any type of evidence. When calculating overtime work exceeding the accruals, the amounts of overtime payment in the payrolls should be set off…”

Indicating that in cases of unsigned payrolls with overtime accruals paid through the bank, the employee is not limited to written evidence but can prove the excess with any type of evidence.