Notice pay is the compensation paid in the amount of the wage for the termination notice period, in case the indefinite-term employment contract is terminated without complying with the notice periods stipulated in the law. The regulation is in Article 17 of the Labor Law No. 4857.
Notification Periods (HR article 17/2)
The party terminating indefinite-term employment contracts must notify the other party of its intention to terminate within a period of time that varies according to seniority:
- For the employee whose employment has lasted 6 months → 2 weeks
- For the worker whose job lasted 6 months – 1.5 years → 4 weeks
- For a worker who has worked for 1.5 – 3 years → 6 weeks
- For workers who have worked for more than 3 years → 8 weeks
These periods are minimum; It can be increased, not decreased, by contract or collective bargaining agreement.
Entitlement to Notice Compensation
Notice compensation arises not in every case of termination, but only in the following cases:
- In case of termination made by the employer without a justifiable reason and without complying with the notice period → employee receives.
- In case the employee resigns without complying with the notice period, other than HR article 24 → employer may request it.
Notice compensation does not arise in the following cases:
- Natural termination of a fixed-term contract
- Termination of the employee under HR Article 24 (for just cause)
- Termination of the employer by HR Article 25/II (with just cause) - violation of the rules of morality and good faith
- Resignation of the worker due to retirement or military service
- Resignation of a female employee within 1 year due to marriage (she only receives seniority, no notice)
- Death of worker
How to Calculate?
Notice compensation = Gross wage for the notice period. The calculation is the same as the defined wage in severance pay (including food, travel, bonuses, bonuses, social benefits).
Example
The notice period for an employee who has worked for 4 years and whose monthly gross wage is 40,000 TL is 8 weeks:
- Daily wage = 40,000 / 30 = 1,333.33 TL
- 8 weeks = 56 days
- Notice pay = 56 × 1.333,33 = 74.666,67 TL gross
Important tax difference: Severance pay is exempt from income tax; Notice compensation is subject to all tax deductions (income tax, stamp duty). The net amount is considerably lower than the gross.
Termination by Cash Payment
If the employer does not want to wait for the notice period, he can terminate the employment contract immediately by paying the fee for the notice period in advance (HR article 17/4-5). In this case, termination becomes effective with down payment. However, advance payment does not eliminate the severance pay obligation.
Job Search Permit (HR Article 27)
During the notification period, the worker is entitled to a job search permit of at least 2 hours a day during work hours. If the employer does not give this permission or the worker is employed even though he is not sent to look for a job, the wage for the time spent on leave must be paid with a hundred percent increase.
Interest Type and Limitation
- Interest: Legal interest is applied to the notice pay (NOT the highest bank interest such as severance pay). The beginning of interest is the date of default; In practice, the date on which the notice is received or the date on which the lawsuit is filed is generally accepted.
- Prescription: 5 years (Additional Article 3 of Law No. 4857). The period starts from the date of termination.
Employer's Right to Request in Case of Employee's Resignation Without Notice
If the employee leaves the job without a justified reason and without complying with the notice period, the employer may also demand notice compensation from the employee. In practice, the employer tries to offset this amount from the final wage; However, unilateral offset cannot be made without the written consent of the employee (TBK Article 407, principle of wage protection). For this reason, the employer must either submit his claim to the labor court or file a separate claim.
Notice Compensation and Mandatory Mediation
Requests for notice compensation are subject to compulsory mediation within the scope of Article 3 of Law No. 7036. If the mediator is not consulted before the case is filed, the case will be rejected due to procedural reasons.
Common Errors
- Incorrect calculation of notice period (resulting from incorrect determination of seniority period)
- Not including regular payments such as food/transportation in the calculated wage calculation
- Requesting the interest type as severance interest instead of notice (reason for reversal by the Supreme Court)
- Confusion of prepaid notification fee and notice compensation
These items make a difference of thousands of TL; Therefore, it is recommended to seek professional legal support during the termination process.