What is severance pay?

Severance pay, which first entered our law with the Labor Law No. 3008 dated 1936, is regulated in Article 14 of Law No. 1475. The new Labor Law No. 4857 did not regulate severance pay, but it did not revoke the provision of Article 14 in the repealed Labor Law No. 1457. Therefore, this provision is still in effect.

It is considered that after working in a workplace for a certain period of time, a compensation will be paid to the worker if certain conditions are met, in order to prevent him from being economically vulnerable due to the wear and tear that occurs during his working hours and until he finds another job to manage his life. The statements of the General Assembly of the Supreme Court of Appeals regarding the reason for severance pay are as follows:

"As stated in the decision of the Supreme Court Jurisprudence Unification Board dated 03.11.1948 and numbered 11/7, the right to severance pay is based on the purpose and reason of protecting the isolated worker and saving him from necessity and need to some extent, without taking into account the wishes and will of the two parties.

Severance pay is based on a completely unique idea of legal duty, which does not fall into any of the usual patterns, but is inspired by many of them. It is such a duty that it arises and becomes a claim on the employee's assets, only if certain conditions specified in the law are met; In other words, it depends on whether the worker has entered the situation framed by those conditions (Mustafa Çemberci, Labor Law Commentary, Ankara 1986, page 382). K. 2010/172

Below, we will provide information under the title of conditions for the employee to receive severance pay. However, due to its importance, it should be noted here that the right to severance pay only comes to the agenda in case of justified termination of the employee, i.e. unfair termination of the employer.

CONDITIONS FOR RECEIVING SEVERANCE PAY

1- Condition of Being a Worker Subject to the Labor Law

According to the definitions in the Labor Law, a real person who works based on an employment contract is called a worker. It does not matter how the contract is made. Verbal employment contracts are also valid. However, a written contract is recommended for proof.

According to the law, some professional groups are not considered as workers. These groups are also stated in Article 5 of Law No. 1475.

2- Minimum 1 Year Working Condition

To be entitled to severance pay, the employee must have worked for one year. Because, in Article 14 of the Law, ".. the employer shall pay severance pay to the employee in the amount of 30 days' wages for each full year during the continuation of the employment contract, starting from the date the employee starts working." There is a regulation as follows. It follows from this that full-year employment is sought.

If it is related to the employee's workplace, it is necessary to make the calculation according to the following article:

The seniority of the workers is calculated by taking into account the periods they worked in one or different workplaces of the same employer, regardless of whether the service contract continues or is re-contracted intermittently. In case of transfer or transfer of workplaces, or transfer from one employer to another employer in any way, or transfer to another location, the employee's seniority is calculated based on the sum of the periods of service contracts in the workplace or workplaces. As of 12.7.1975, in case the workplace is transferred or changes hands in any way, both employers are responsible for the severance pay. However, the responsibilities of employers who transfer the workplace are limited to the periods during which they employ the employee and the wage level received by the employee at the time of the transfer. If the workplace was transferred or changed hands in any way before 12.7.1975, the new employer is responsible for the severance pay incurred, unless there is a contrary provision in the transfer agreement.

We need to mention one more issue here. In order to receive severance pay, the worker must be working with an employment contract of indefinite duration. There is no right to severance pay in fixed-term employment contracts.

3- The contract must be terminated for just cause.

The conditions for being entitled to severance pay are regulated in the first paragraph of Article 14 of the Labor Law No. 1475; In the said article, it is stated that the person to whom severance pay will be paid must be a "worker" subject to the Labor Law No. 1475 and that the service contract must be terminated for the reasons specified in Article 14. The statements of the General Assembly of the Supreme Court of Appeals regarding termination are as follows:

"One of the most important reasons that terminates an employment contract is termination. Termination is a unilateral right that terminates a permanent (definite or indefinite-term) employment contract immediately or after a certain period of time, and creates a disruptive innovation that must reach the other party. Therefore, termination is a declaration of will that has its provisions and consequences from the moment it reaches the other party, and does not require the acceptance of the other party (Senyen Kaplan, Emine Tuncay: Fixed-Term Employment Contract Provisions and Consequences of Unfair Termination, Registry Labor Law Journal, Year 2016, Issue 36, p.23 ).

Termination notification is a unilateral declaration of will, and this declaration can be used to terminate the contract by granting a period of time in indefinite-term employment contracts, as well as to terminate fixed or indefinite-term contracts by the employee or employer without giving a period, based on just cause. For this reason, notice of termination in employment contracts is a unilateral declaration of intent that must be directed to the other party, terminating the contract after a certain period of time or immediately, and it produces results when it reaches the addressee.

The right to give notice of termination in employment contracts is, as a rule, granted to both parties. Due to its legal nature, termination notification is an innovative right, and since this declaration will have consequences once it reaches the other party, there is no need for the other party to accept it. Since the employment contract will end with a notice of termination, which is the exercise of a right that creates disruptive innovation, the notice must be made in a specific and clear manner.

The employee's right to terminate the employment contract immediately for justified reasons is regulated in Article 24 of the Labor Law No. 4857.

In accordance with subparagraph (e) of paragraph (II) of Article 24 of the Labor Law No. 4857, "If the employee's wage is not calculated or paid by the employer in accordance with the provisions of the law or the terms of the contract", the employee may terminate the employment contract for justified reason.

It should be noted that the worker can exercise this right due to non-payment of not only his basic wage, but also his wage in a broad sense, in other words, all kinds of wage supplements (e.g. bonus, premium, fuel allowance, clothing allowance, etc.) (Süzek, Sarper: Labor Law, 19th Edition, Istanbul 2020, p. 712).

If it is proven that the employment contract was terminated for justified reason in accordance with Article 24 of the Labor Law, the employee is entitled to severance pay in accordance with the currently valid Article 14 of the repealed Labor Law No. 1475, which regulates severance pay."

As can be understood from the decision, the law provides the opportunity for immediate termination for justified reasons to both the employee and the employer. The important point for our subject is this; In order to receive severance pay, the contract must be terminated either by the employee for justified reasons or by the employer for an unfair reason. Below we will list the situations that give the employee the right to immediate termination. In addition, we will also touch upon the employer's justified termination reasons and situations in which severance pay will not be earned.

IN WHICH CASE IS AN WORKER ENTITLED TO SEVERANCE PAY?

The Labor Law grants the employee the right to terminate the employment contract immediately in some cases. In these cases, the employee who terminates the contract will be entitled to severance pay. According to the decision of the Supreme Court of Appeals HGK numbered 2021/1402 K.:

One of the most important reasons that terminates an employment contract is termination. Termination is a unilateral right that terminates a permanent (definite or indefinite term) employment contract immediately or after a certain period of time, and that creates a disruptive innovation that must reach the other party. Therefore, termination is a statement of will that has its provisions and consequences from the moment it reaches the other party and does not require the acceptance of the other party (Senyen Kaplan, E. Tuncay: Provisions and Consequences of Unfair Termination of a Fixed-Term Employment Contract, Registry Labor Law Journal, 2016, Issue: 36, p. 23).

The employment contract is a contract established between the employee and the employer, which imposes obligations on both parties, and creates a personal and permanent relationship based on mutual trust between the employee and the employer. For this reason, acting on the fact that if one of the employee or employer parties violates this trust with the behavior of the party whose trust is shaken, the party whose trust is shaken cannot be bound by the employment contract in cases where it can no longer be expected to continue this relationship according to the objective rules of good faith, the legislator has given the parties the right to terminate the employment contract without compensation for just cause with its regulation.

Termination for just cause, which is expressed in our law with terms such as "extraordinary termination", "termination without notice", "indefinite termination", "termination without notice", "immediate termination", "termination for justified reason", Turkish Code of Obligations Article 435, Labor Code Articles 24 and 25; Maritime Labor Code articles 14, 16; It is regulated in Article 11 of the Press Act. Therefore, termination for just cause is a right recognized by law. Termination for just cause is defined as a party's immediate termination of the employment contract, without retroactive effect, by a declaration of intent directed to the other party, relying on the right to terminate for just cause. In this respect, the Labor Law regulates the right to termination for just cause under the title of "Immediate termination for just cause" ( Mollamahmutoğlu, H. / Astarlı, Muhittin / Baysal, Ulaş: Labor Law, 6th Edition, Ankara 2014, p. 794 ).

Articles 24 and 25 of the Labor Law No. 4857 regulate the situations of immediate termination of the employment contract by the employee and the employer for just cause, and the 24th article titled "The employee's right to immediate termination for just cause";

"Whether the term is fixed or not, the employee may terminate the employment contract before the end of the term or without waiting for the notice period in the following cases:

1- Severance Pay in Case of Termination Due to Health

According to Article 25 of the Labor Law, the right to termination due to health will only arise in the following cases:

a) If the performance of the work that is the subject of the employment contract is dangerous to the health or life of the worker due to a reason arising from the nature of the work.

b) If the employer or another worker with whom the worker constantly meets closely and directly has a disease that is contagious or incompatible with the worker's job.

In paragraph (I) of Article 24 of the Labor Law No. 4857, termination of the employee's employment contract due to health reasons is accepted as limited to two situations. In subparagraph (a) of paragraph (I) of the relevant article; It has been explained that if the performance of the work that is the subject of the employment contract is dangerous to the health or life of the worker due to a reason arising from the nature of the work, the worker has the possibility of justified termination.

Again, according to the above provision, in order for the right to terminate for health reasons in favor of the worker to arise, first of all, the work performed must pose a danger to the life or health of the worker. Likewise, the danger in question must arise from the nature of the work.

A Supreme Court decision on the subject is shared below:

"After 1999, it was determined that it was given to the coil department due to its report, and according to the dust measurement made by İSGÜM in the workplace, the rate in question was below the standards.

Witnesses on both sides stated that there was dust in the coil section, and the difference with the previous section was small.

In this case, as a result of the examination to be carried out at the workplace by the expert committee, including the plaintiff's doctor, who is a specialist in his illness, it should be determined whether the work contract is dangerous to his health or life due to the plaintiff's fixed illness in the department where he works, due to a reason arising from the nature of the job, and it should be decided whether the employment contract was rightfully terminated by the plaintiff, but the decision to reject the severance pay request with written justification was wrong and required reversal. Y9 HD. 2008/16409 K.

2- Severance Pay in Termination Due to Non-Payment of Labor Receivables

Failure to pay labor receivables creates the possibility of immediate justified termination for the employee. Labor Law 24/2 e. This issue is directly regulated in the article. The worker can exercise this right due to non-payment of not only his basic wage, but also his wage in a broad sense, in other words, all kinds of wage supplements (e.g. bonuses, premiums, fuel aid, clothing allowance, etc.). There is also the possibility of termination if the fee is paid late.

3- Situations That Do Not Comply With the Rules of Ethics and Goodwill and Similar

a) If the employer misleads the employee at the time of making an employment contract by showing false qualifications or conditions about one of the essential points of this contract, or by giving unrealistic information or making statements.

b) If the employer says words, acts in a way that harms the honor and decency of the employee or one of his family members, or sexually harasses the employee.

c) If the employer taunts or intimidates the worker or one of his family members, or encourages, provokes or drags the worker or one of his family members to act against the law, or commits a crime requiring imprisonment against the worker or one of his family members, or makes unfounded and serious accusations against the worker or a member of his family that are degrading to honor and dignity.

d) If the worker is subjected to sexual harassment in the workplace by another worker or third parties and the necessary precautions are not taken despite reporting this situation to the employer.

e) If the employee's wage is not calculated or paid by the employer in accordance with the provisions of the law or the terms of the contract, (this issue is explained in the title above.

f) In cases where it is decided to pay the wage on a piece-by-piece basis or based on the amount of work, but the employer assigns less work to the worker than the number and amount he can do, the wage difference is paid on a time basis and the worker's missing wage is not covered, or the working conditions are not implemented.

In case of one of the above reasons, the employee is entitled to severance pay by terminating the employment contract.

4- Right to Severance Pay in Case of Military Service

According to Article 31 of the Labor Law:

In order to benefit from this right, the worker must have worked in that job for at least one year. For each additional year of work for more than one year, two additional days are added. However, this entire period cannot exceed ninety days.

The worker's wage will not be processed during the period that must be waited for the employment contract to be considered terminated. However, the provisions of special laws on this matter are reserved. Even if the other party is notified within this period that the employment contract has been terminated by the employer or employee based on another reason arising from the Law, the period specified by the Law for termination begins to run after the end of this period. However, if the employment contract is concluded for a certain period of time and the contract terminates automatically within the period written above, the provisions of this article do not apply.

If workers who leave their jobs due to any military or legal duty want to take a job within two months starting from the end of this duty, the employer must hire them immediately if there are vacancies in their old jobs or similar jobs, otherwise, under the current conditions, by giving preference to other bidders for the first job to be vacant. If the employer does not fulfill his obligation to conclude an employment contract even though the required conditions are met, he will pay compensation in the amount of three months' salary to the former employee who requested to be hired.

As stated in the above provision of the Law, severance pay must be paid to the employee who leaves the job due to military service. An employee who leaves his job due to paid military service is also entitled to severance pay.

5- Severance Pay Due to Retirement

If the employee whose legal retirement period is due leaves his job, he will be entitled to severance pay. 14/4 of Law No. 1475. According to the article; Workers who leave their jobs in order to receive old-age, retirement or disability pensions or lump sum payments from the institutions or funds established by law "or by Presidential decree" to which they are affiliated have the right to severance pay.

6- Severance Pay in Termination Due to Marriage of a Female Worker

14/5 of Law No. 1475. Pursuant to the second sentence of the article, if the woman terminates her marriage voluntarily within one year from the date of marriage, severance pay is paid to her. It should be noted that the contract must be terminated within 1 year from the date of marriage.

7- Severance Pay in Case of Death of the Worker

14/5 of Law No. 1475. It is regulated in the article that severance pay will arise in case of death of the employee.

Also, in accordance with Article 440 of the TBK:

The contract ends automatically with the death of the worker. The employer shall pay one month's salary to the employee's surviving spouse and minor children or dependents, starting from the day of death; If the service relationship has continued for more than five years, he is obliged to make a payment of two months' salary.

CASES WHERE THE WORKER CANNOT RECEIVE SEVERANCE PAY

The worker's right to receive severance pay is limited in some cases. These limitations usually come into play when the worker leaves the job due to personal reasons. For example, if the employee resigns due to finding a better job, severance pay will not be paid. Here we feel the need to make a few evaluations regarding resignation. As a rule, the resignation of the employee means that he will not receive severance pay. However, sometimes the worker may have resigned due to compelling reasons. In addition, a resignation letter may have been coerced from the employee. In such cases, true will is investigated. An employee who makes resignation cases the subject of a lawsuit due to the judiciary's interpretation in favor of the employee can claim that the termination is justified by proving his claim. The following Supreme Court HGK decision expressed this situation as follows:

"The dispute is; in the concrete case where the plaintiff claimed in the petition that he terminated the employment contract for a justified reason due to non-payment of labor receivables, and the defendant's attorney submitted a resignation letter dated 14.12.2011, in which it was written that the plaintiff resigned due to special reasons. Considering the witness statements, whether the plaintiff terminated the employment contract without a justified reason by resigning or for a justified reason due to non-payment of labor receivables; depending on the conclusion to be reached here. It depends on whether the employee is entitled to severance pay or not.

The plaintiff's attorney claimed in his petition that his client terminated the employment contract for just cause due to non-payment of labor receivables, and stated that the unpaid labor receivables were overtime, national holiday and general holiday wages, and requested that the said receivables be adjudicated. The defendant employer did not make a defense regarding termination, but submitted a resignation letter dated 14.12.2011, handwritten and signed by the plaintiff, in the workplace registry file. In this resignation letter included in the file, the plaintiff stated that he wanted to resign as "...I want to resign from my duty of opening 2 notice distribution cuts in Hatay Province, where I work, due to special reasons..." and stated that he wrote this resignation letter during the trial phase due to the non-payment of labor receivables.

The defendant's witnesses did not have information about the plaintiff's reason for leaving his job; They stated that ..., one of the plaintiff's witnesses, did not have a statement regarding termination, and that the other plaintiff witnesses ... and ... had left the job before the plaintiff, and that they did not have information about the reason for the plaintiff's resignation. In this respect, no information regarding the termination of the employment contract can be obtained from the statements of the plaintiff and defendant witnesses. However, the plaintiff's witnesses have eye-based information regarding the plaintiff's working hours and days, and the court ruled that they will receive overtime, national holiday and general holiday pay in line with the expert report prepared by evaluating these statements. Since it is seen that the Special Chamber has not reversed the judgment regarding the receivables, it must be accepted that the plaintiff's witnesses confirmed the plaintiff's claim that the labor receivables were not paid.

On the other hand, while the plaintiff employee stated in his resignation letter that he left the job for special reasons, he did not specify any concrete reason, and claimed in the petition and during the trial that he terminated the employment contract for justified reasons due to unpaid labor receivables. In this case, the real situation behind the resignation letter needs to be investigated. Failure to pay workers' wages in full and on time gives the worker the opportunity to terminate the employment contract for justified reasons, so this case must be investigated. As a result, it is clear that what the plaintiff meant by the special reasons stated in his resignation letter was the non-payment of labor receivables, and that the plaintiff, who terminated the employment contract based on just cause, was entitled to severance pay, as it was determined in the trial that the plaintiff was owed overtime, national holiday and general holiday wages. " 2022/82 K.

According to Article 25 of the Labor Law, the employee is not entitled to receive severance pay in the following cases:

I- Health reasons:

b) If it is determined by the Health Board that the disease that the worker is suffering from is incurable and there is a risk for him to work in the workplace.

Except for the reasons listed in subparagraph (a), the employer has the right to terminate the employment contract without notice in cases such as illness, accident, birth and pregnancy; The specified situations arise after the notification period in Article 17 exceeds six weeks, depending on the employee's working period at the workplace. In cases of birth and pregnancy, this period begins at the end of the period specified in Article 74. However, wages will not be charged for periods when the employee cannot go to work due to the suspension of the employment contract.

II- Situations that do not comply with the rules of morality and good faith and similar:

a) The employee misleads the employer by claiming that he/she has the qualifications or conditions required for one of the essential points of this contract at the time of making the employment contract, even though he/she does not have them, or by giving untrue information or words.

c) The employee sexually harassing another employee of the employer.

d) The employee teasing the employer, one of his family members, or another employee of the employer (Amended phrase: 6331 - 20.6.2012 / art.32/b / Validity / art.38/c) "coming to the workplace drunk or on drugs or using these substances at the workplace".

e) The employee's behavior that does not comply with honesty and loyalty, such as abusing the employer's trust, stealing, revealing the employer's professional secrets.

f) The worker commits a crime at the workplace that is punishable by imprisonment for more than seven days and whose punishment is not suspended.

h) The employee insists on not performing the duties that he is obliged to perform, even though he is reminded.

III- Compelling reasons:

The emergence of a compelling reason that prevents the employee from working at the workplace for more than a week.

IV- In case the worker is detained or arrested, the absenteeism exceeds the notification period in Article 17.

The worker may apply to the judiciary within the framework of the provisions of Articles 18, 20 and 21, claiming that the termination is not in accordance with the reasons set out in the above paragraphs.

In termination due to the employee's absenteeism, the following criteria must be followed in the Supreme Court decision:

"In subparagraph (g) of paragraph (II) of Article 25 of Law No. 4857, which regulates the employer's right to immediate termination for just cause, it is stated that "In case the worker does not attend his job for two consecutive business days, or twice in a month, on the next business day after any holiday, or three business days in a month, without taking permission from the employer or based on a justified reason", the employer may terminate with justified termination. It has been ruled that there is a possibility.

The justifiable reason giving rise to the right of termination here is that the employee has not continued his job for a certain period of time without permission or a valid excuse. In order to constitute a justified reason, the absence must have lasted two consecutive business days, twice in a month on the business day following any holiday, or three business days in a month, as prescribed by law. The term "working day" includes the days that are considered to be working days by law, as well as the days that are considered to be working days by contract and, accordingly, the general holidays that are foreseen to be worked by collective bargaining agreements (Mollamahmutoğlu, Hamdi/Astarlı, Muhittin/Baysal, Ulaş: Labor Law, 6th Edition, Ankara, 2014, p. 851).

If the employee is on leave on the days determined to be absent, or if his absence is based on a justified reason, it will not be possible to terminate the employment contract due to absenteeism, even if he did not continue his job. It is not possible to count and determine the reasons that justify absenteeism in advance, and they must be determined according to the characteristics of each concrete event.

Whether or not the event on which the worker bases his absence is justified should be determined according to objective rules of good faith, taking into account issues such as the nature of the event, the situation the worker is in, the characteristics and requirements of the workplace, and traditions ( Mollamahmutoğlu et al., p. 853 ).

The worker who claims that the absence is based on a justified reason is obliged to prove this." YHGK- 2024/44 K.

HOW IS SEVERANCE PAY CALCULATED?

The wage to be taken as basis in calculating severance pay is the employee's last wage. In other words, it is the wage valid at the time the employment contract is terminated. In the case of termination by giving notice, the fee on the date of termination of the notice should be taken as basis, since the termination takes place on the date when the notice expires. In case of termination by the employer without notice and before the notice payment is paid (in full), the employee whose employment contract is terminated must also benefit from the wage increase implemented in the workplace until the end of the notice period, and his compensation must be calculated on the basis of this increased wage.

The wage that should be taken into account in the severance pay calculation is the worker's gross wage. In that case, severance pay is calculated not on the employee's actual wage, but by taking into account the gross wage determined without deductions such as insurance premiums, taxes, union fees, etc.

In determining the wage to be taken as basis for severance pay, in addition to the actual wage mentioned in Article 32 of the Labor Law No. 4857, the money provided to the worker or benefits that can be measured in money are taken into account. Accordingly, bonuses, ongoing premiums, fuel aid, clothing aid, rent, lighting, service aid, food aid and similar payments are taken into account in the calculation of severance pay. Private health insurance benefits or life insurance premium payments provided to the worker are also included in the concept of benefits that can be measured in money and should be added to the wage based on compensation. Although the bonus calculated based on sales figures or other data may vary, it should be evaluated within the concept of extended wage in the severance pay calculation. Y9HD. 2020/13100 K.

Based on the above decision, it should be noted that the severance pay will be the amount resulting from multiplying the last gross wage the worker received by the number of years he worked.

SEVERANCE PAY CEILING

According to Law No. 5434, a ceiling limit has been determined for severance pay. According to the law, the upper limit of severance pay cannot exceed the highest retirement bonus amount paid to the highest civil servant in a year. This fee has been determined as 41,828.42 TL until the end of 2024.

SEVERANCE PAY LIMITATION PERIOD

A statute of limitations has been determined for severance pay. This period is set as 5 years. The starting date of the interest to be applied to severance pay for employees working under the Labor Law No. 4857 is the termination date in case the employment contract is terminated by termination, and in case of termination due to retirement, the date on which the employee's retirement allocation request is notified to the employer by the Institution. The type of interest to be applied is the highest deposit interest actually applied by banks to one-year deposits. For employees within the scope of the Maritime Labor Law and the Press Labor Law, the beginning of severance pay interest is the default date and the type of interest is legal interest.

HOW IS SEVERANCE PAYMENT PAID?

According to Article 32 of the Labor Law titled "Payment of Wages and Wages", "In the termination of employment contracts, the employee's wages and benefits that can be measured in money arising from the contract and the Law must be paid in full."

In accordance with the above provision, severance pay must be paid in cash following the termination date of the contract. However, the parties may change the payment time and conditions by mutual agreement.