Severance and Notice Compensation – Legal Rights & Calculation


What Is Severance Pay?

Severance pay is a compensation amount paid by the employer to the employee or their legal heirs in case of termination under specific conditions. To qualify for severance pay, the employee must have worked for at least one year and meet the legal termination criteria.

Conditions for Receiving Severance Pay

  1. The employee must have at least one year of continuous employment (insured work).
  2. The employment contract must end for specific reasons, including:
    • Not being dismissed due to misconduct (Termination under Article 25 of the Labor Law for immoral behavior disqualifies severance pay).
    • Employee resignation under justified reasons (Labor Law Article 24).
    • Termination due to compulsory military service.
    • Resignation for retirement or pension benefits.
    • Female employees resigning due to marriage within one year.
    • Employee’s death (severance is paid to legal heirs).

How Is Severance Pay Calculated?

Severance pay is calculated based on one month’s gross salary for each year of employment.

Formula for calculation:

  1. Calculate the employee’s daily wage (based on the last gross salary before termination).
  2. Multiply by 30 (to determine monthly severance).
  3. Multiply by the number of years worked.
  4. For partial years, calculate proportionally.

Severance pay is always based on gross salary, not net salary.

What Is Notice Compensation?

Notice compensation is a financial obligation imposed on the party terminating an indefinite-term employment contract without just cause, without following the required notification period.

Conditions for Notice Compensation

  • The terminating party must lack a justified reason (as defined by Article 24 for employees and Article 25 for employers of the Labor Law).
  • The terminating party must either:
    • Give proper notice within the required time, or
    • Pay compensation equal to the notice period salary.

Notice Periods and Calculation

The required notice period depends on the employee’s tenure at the company:

  • Less than 6 months → 2 weeks’ notice
  • 6 months – 1.5 years → 4 weeks’ notice
  • 1.5 years – 3 years → 6 weeks’ notice
  • More than 3 years → 8 weeks’ notice

Unlike severance pay, notice compensation does not require a minimum of one year of employment.

The statute of limitations for notice compensation claims is five years.

For expert legal assistance in severance pay, notice compensation, and labor disputes, contact Üner Law Office in Alanya via uner.av.tr.

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