What is Severance Pay, Who Can Receive It, What Are the Conditions, and How is It Calculated?

Severance pay is the compensation that the employer is obligated to pay to the employee when they leave the job, provided the employee meets certain conditions.

Who Can Receive It?

First and foremost, the manner in which the employee leaves the job is important. In order for the employee to be entitled to severance pay, apart from the specific cases regulated by law (e.g., a female employee terminating her employment contract due to marriage), the employee must either be dismissed by the employer or leave the job with a just cause.

What Are the Conditions?

1. The employee must have worked at least 1 year at the workplace where they are employed.
   • Even if the employee has worked in different job fields or workplaces under the same employer, these periods of work will be accumulated and counted as 1 year.
2. The employee must have been dismissed by the employer or terminated their employment contract for just cause.
3. The employee must be one of the workers subject to the Turkish Labor Law No. 4857.
   • Which workers are subject to the Turkish Labor Law No. 4857 and which are not are defined in Article 4 of the law as follows:
     • Article 4 – The provisions of this Law do not apply to the following jobs and employment relationships:
       • In maritime and air transport jobs,
       • In workplaces or businesses where agricultural and forestry work is carried out with fewer than 50 employees (including 50),
       • All types of construction work related to agriculture within the boundaries of family economy,
       • In homes and handicraft work done between family members and relatives up to the third degree (including the third degree), without the involvement of anyone from outside,
       • Domestic services,
       • Apprentices,
       • Athletes,
       • Those who are rehabilitated,
       • In workplaces with three employees, as defined in Article 2 of the 507th Tradesmen and Artisans Law.
       • However, the following are subject to the provisions of this Law:
       • a) Loading and unloading operations from ships to shore and from shore to ships at the coasts, ports, and docks,
       • b) Works carried out at all aviation facilities,
       • c) Construction works in agricultural enterprises,
       • d) Park and garden works that are open for public use or are an extension of the workplace,
       • e) Works related to marine products producers working at sea, which are not covered by the Maritime Labor Law and are not considered agricultural work.
       • These are subject to the provisions of this Law.

How is it Calculated?

Severance pay is calculated based on the gross salary of the employee on the date they leave the job, with one gross salary added for each year worked before leaving the job. Periods exceeding one year will also be taken into account in the calculation.

To explain with an example, if an employee working on the minimum wage leaves their job on 01.07.2020, having started on 01.01.2017, they would have 3 years + 6 months of service, and when calculated using the 2020 gross minimum wage of 2,943.00 TL: 3.5 * 2,943.00 = 10,300.50 TL in severance pay. After a stamp duty deduction of 0.00759 is applied to this gross amount, the employee will be entitled to a net severance pay of 10,222.30 TL.

Can an Employee Who Resigns Receive Severance Pay?

An employee will be entitled to severance pay if they leave the job for a justified reason that allows them to exercise their right to immediate termination. The justifiable reasons for termination are listed in Article 24 of the Turkish Labor Law No. 4857, and similar situations that may constitute a just cause can also be sufficient for lawful termination:

• The Employee’s Right to Immediate Termination for Just Cause – Article 24: Whether the contract is for a fixed term or not, the employee may terminate the employment contract before the expiration of the term or without waiting for the notice period in the following cases:
• I. Health reasons:
  • a) If performing the work subject to the employment contract becomes dangerous for the employee’s health or life due to the nature of the work.
  • b) If the employee contracts a contagious disease or a disease incompatible with the nature of their work due to continuous and direct contact with the employer or another employee.
• II. Situations and similar cases that violate the rules of ethics and good faith:
  • a) If the employer deceives the employee by providing false qualifications or conditions about a fundamental aspect of the employment contract during its formation, or by giving inaccurate information or making misleading statements.
  • b) If the employer makes comments or engages in behavior that insults the honor and dignity of the employee or a member of their family, or if the employer sexually harasses the employee.
  • c) If the employer harasses the employee or a member of their family, intimidates them, encourages or incites them to act unlawfully, or if the employer commits a crime that would result in imprisonment against the employee or a family member, or makes false, defamatory, or damaging accusations about the employee’s honor and dignity.
  • d) If the employee is sexually harassed by another worker or third party in the workplace, and despite notifying the employer, necessary measures are not taken.
  • e) If the employer does not calculate or pay the employee’s wage in accordance with the law or the terms of the contract,
  • f) If it is agreed to pay the wage per piece or based on the amount of work, and the employer provides fewer tasks than the employee is capable of, and the wage difference is not paid on an hourly basis, or if the working conditions are not applied.
• Force majeure reasons: If force majeure circumstances arise that require the work to stop for more than a week at the workplace where the employee works.

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