The footprint of flexible workplaces (i.e., co-working spaces) continues to expand as more and more global businesses embrace the modern workforce and the increasing options for work arrangements. Turkey has joined the flexible workplace trend.
Both global businesses and remote workers such as freelancers and start-up entrepreneurs find flexible workplaces attractive, as these spaces provide cost-efficiency, wider networking opportunities, and increased productivity.
Flexible workplaces afford global businesses the flexibility they need in the current dynamic economic climate. We are witnessing technological advancements moving at an unprecedented pace and transforming how and where work is done.
Nature of Flexible Workplace Agreements
As a co-working operation is a combination of lease, services, and even hospitality, there is no standard description for the agreements executed with the operators of such workplaces. In Turkey, operators refrain from defining these agreements as leases to avoid the mandatory lease provisions of the Turkish Code of Obligations No. 6098, which have a pro-tenant approach. Instead, operators usually attempt to classify their flexible workplace agreements as “membership contracts” or “service contracts,” and to describe the users/occupiers of a co-working site as “members” or “customers.”
However, users and occupiers can range from a single self-employed freelancer needing just a desk to an international company that requires a dedicated room or office space for a medium-to-longer term across multiple jurisdictions.
For example, for longer-term arrangements of dedicated spaces, users/occupiers seek membership/services contracts that (i) provide them with greater control of the space, and (ii) protect their usage rights. Such contracts usually evolve into traditional lease agreements.
Application of the Lease Provisions of the Turkish Code of Obligations to Flexible Workplace Agreements
The Turkish Code of Obligations defines a lease agreement as an agreement whereby the lessor allows the lessee to use a specific property for a specific period and the lessee undertakes to pay a fee or rent in return. The flexible workplace concept is quite new in the Turkish market and is not regulated by any specific legislation.
As explained above, flexible workplace agreements have the nature of a mixed contract. The expectation and intention of both the operator and the user in entering into a flexible workplace agreement is different than a traditional lease agreement, since traditional lease agreements limit the parties’ flexibility.
Users without a dedicated space – such as individual self-employed freelancers – usually pay for access to the flexible workplace to benefit from the services provided by the operator (such as Internet, printer, kitchen facilities, meeting room, reception, etc.), while utilizing a free space (desk, chair, etc.) to work. As this type of arrangement does not meet the conditions described under the Turkish Code of Obligations, we believe that the users may not be protected by it. Instead, this arrangement is similar to “members club” or “gym” memberships.
However, where the operator allows the user/occupier to use a specific property for a specific period in return for a fee, as described under the Turkish Code of Obligations, it can be argued that flexible workplace arrangements offering a dedicated space may be deemed a lease agreement.
Considering these facts and the complexity of flexible workplace agreements, it is difficult to come to a decisive conclusion as to whether or not the flexible workplace agreements are subject to the lease provisions of the Turkish Code of Obligations.
The number of co-working spaces are increasing in Turkey, and global businesses prefer flexible workplaces over offices. As the application of the Turkish Code of Obligations is currently uncertain, the number of potential disputes arising from flexible workplace agreements may increase in the future. In the absence of specific regulations focused on co-working space arrangements, court precedent and scholars’ opinions will provide guidance on the interpretation of these agreements. Thus, time will show how users/occupiers’ usage rights, confidential information, trade secrets, data privacy, brands, and talent will be protected while operating in these shared environments.
By Birturk Aydin, Partner, and Kerem Kuscu, Senior Associate, Esin Attorney Partnership