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What is Severance Pay? How to qualify?

What is Severance Pay? How to qualify? Severance pay is an amount of money that must be paid by the employer to the employee with at least 1 year seniority due to the termination of the employment contract for a specific reason stipulated in the law, or to the family of the employee in case of death, the amount calculated according to the employee’s wage and seniority.

Severance pay is a right for workers. According to this; Severance pay is not only for workers in the Labor Law,

  • Seafarers who are considered workers according to the Maritime Labor Law
  • Journalists who fall outside the definition of worker according to the Press Labor Law
  • It is also valid for these workers if there is a provision in the employment contract in the workplaces where agricultural and forestry works are carried out, which are subject to the Law of Obligations, which are outside the Labor Law, and employ less than 50 workers.

TERMS AND CONDITIONS FOR QUALIFICATION TO SENIORITY

There are some conditions for a worker subject to the Labor Law to earn severance pay. These conditions are; to be working in a permanent workplace, the termination of the employment contract for certain reasons, and the fulfillment of the employee’s seniority condition.

1. WORKING IN A WORKPLACE SUBJECT TO LABOR LAW

The first condition for entitlement to severance pay is that the worker is working in a workplace subject to the Labor Law. At this point, it is important which jobs are subject to the Labor Law or not. Article 4 of the Labor Law No. 4857 counts the exceptions in terms of being subject to the Labor Law. These;

Sea and air transport
In agricultural and forestry enterprises and workplaces employing less than 50 workers
All kinds of construction works related to agriculture and forest within the borders of the family economy.
A family, provided that there is no outsider, in houses and in the works where handicrafts are made.
in home services
About apprentices, without prejudice to occupational health and safety provisions
About the athletes
About the rehabilitated
In workplaces where 3 people work in accordance with Article 2 of the Tradesmen and Craftsmen Law No. 507

2. TERMINATION OF THE EMPLOYMENT AGREEMENT FOR CERTAIN REASONS

The legislator has stipulated that the Employment Contract should be terminated for certain reasons in order for the severance pay arising from the termination of the employment contract to occur. These; death of the worker, termination of the contract by the employer without just cause, termination of the contract by the worker with just cause, termination of the contract due to military service, termination of the contract for the purpose of receiving a pension from the Social Security Institution or related funds, termination of the contract due to marriage.

SENIORITY COMPENSATION IN CASE OF EMPLOYEE’S DEATH

If the employment contract is terminated due to the death of the worker, the heirs of the worker are entitled to receive severance pay if the deceased worker has fulfilled the working condition of at least 1 year.

SENIORITY COMPENSATION DUE TO THE EMPLOYER’S UNIQUE TERMINATION

Any notice of termination, except that the employer terminates the employment contract due to “contrary to the rules of morality and goodwill”, entitles the worker to severance pay.

Article 25 of the Law also regulates the right of immediate termination of the employment contract by the employer. justifiable reasons;

  • health reasons
  • Situations that do not comply with the rules of morality and goodwill and the like
  • compelling reasons
  • If the worker is detained or arrested, the absence exceeds the notification period in Article 17.
  • In these cases, if the employer terminates the contract immediately, the worker cannot be entitled to severance pay.

SENIORITY COMPENSATION DUE TO TERMINATION OF THE EMPLOYEE FOR Legitimate Reasons

The worker is entitled to severance pay if the service contract is terminated with a notice of termination based on justifiable reasons. This issue is regulated in Article 24 of the Labor Law. Whether the term of the Employment Contract is definite or indefinite, the worker may terminate the contract immediately in case of health reasons, the employer’s non-compliance with the rules of morality and goodwill, etc., or in case of compelling reasons. If the worker terminates the employment contract in this way, he or she is entitled to severance pay.

SENIORITY COMPENSATION IN RELEASE DUE TO ACTIVE MILITARY SERVICE

According to the Labor Law, another situation in which the employee is entitled to severance pay is the situation of leaving the job due to active military service. Regardless of whether the termination of the employment contract is made by the employee or the employer, the employee is entitled to severance pay. The duration of the military service or how it is done does not matter.

In order to be entitled to severance pay due to military service, there must be a reasonable period of time between leaving the job and starting military service. In some of its decisions, the Court of Cassation has decided that workers who leave the job and go to the military after a long time are not entitled to severance pay.

SENIORITY COMPENSATION IN CASE OF RECEIVING MONTHLY FROM THE SOCIAL SECURITY INSTITUTION OR RELATED BOARDS

According to Article 14 of the Labor Law, the employee will be entitled to severance pay in case of termination of the contract “for the purpose of receiving old age, retirement or invalidity pension or lump sum payment from the institutions or funds established by the law to which they are affiliated”. In order for the employee to receive severance pay, he/she must document that he/she has terminated the employment contract for this reason, is entitled to monthly or lump sum payments, and has made a monthly or lump sum payment to the relevant social security institution.

SENIORITY COMPENSATION FOR LEFT FROM EMPLOYMENT DUE TO MARRIAGE

The Labor Law regulates being entitled to severance pay by leaving the job due to marriage, as one of the cases of entitlement to severance pay. Severance pay due to marriage can only be used by women. The law wants to make positive discrimination in favor of women with such an arrangement.

There were some conditions for being entitled to severance pay in case of leaving the job due to marriage. These;

  • The employee was married while the employment contract was in place.
  • Termination of the employment contract by the employee
  • Termination of the employment contract within 1 year from the date of marriage

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REALIZATION OF SENIORITY CONDITION

In order for the seniority condition to be fulfilled and for the worker to be entitled to severance pay, the legislator stipulates a minimum working period of 1 year. This period does not include the days actually worked, but covers the entire period, including the employee’s leave and rest days.

CALCULATION OF SENIORITY BENEFITS

The amount of severance pay is the last 30-day gross wage amount for each full year from the date of employment of the worker during the continuation of the employment contract. Payments are made at the same rate for periods increasing from one full year. The final fee is important in calculating compensation. In addition, on this amount; premiums paid to the worker, bonus, child raise, food and vehicle allowances and other monetary benefits will also be added.

PAYMENT OF SENIORITY BENEFITS

The creditor of the severance pay is the worker if there are numbered reasons and the right to severance pay arises. In the event of the employee’s death, the beneficiaries of the severance pay, which are entitled, are also the heirs.

Severance pay is in the nature of wages. For this reason, it transfers it partially or completely to another person. It is also possible to be seized due to the nature of being a fee.

The law does not specify exactly when severance pay should be paid. Although the exact time of payment is not specified, it is stated that “at the termination of the employment contract, the employee’s wages and the money arising from the contract and the benefits that can be measured in money must be paid in full”. For this reason, it is understood that the employer must pay the severance pay immediately and immediately after the employment contract.

If the employer does not pay the severance pay, the worker will request interest to be applied to the compensation due to delay. This interest will be the highest interest applied to the deposit from the end of the employment contract until the payment day. The reason for applying high interest is to prevent the worker from being a victim in long litigation processes.

MEDIATION AND LEGAL ACTION IN SENIORITY COMPENSATION

In order for the worker to receive severance pay, they must first apply to a mediator in the renewed order. If the employee and employer cannot reach an agreement in mediation, this time a lawsuit must be filed.

Competent Court; The court in charge of severance pay cases is the Labor Courts.

Authorized court; The court of the place where the employee works is authorized. The Supreme Court has given decisions that confirm this issue.

TIMELINESS IN LIABILITY ACTIONS

The statute of limitations for severance pay was normally 10 years, but in line with the newly enacted law, the statute of limitations was reduced to 5 years. If the claim for severance pay is not carried out within 5 years, the worker does not have the right to compensation.

For more detailed information about Severance Pay, you can contact us on our contact page.