According to the Turkish Labour Law, severance pay is the compensation paid over the last gross wage for each seniority year of a worker. The seniority of the worker is calcuated by taking consideration all the years passed at the same workplace and the years passed working at different workplaces of the same employer.
As this is the national minimum wage to be applied in the calendar year of 2023, the annual severance pay of a person working with the minimum wage is 10 thousand 8 Liras per seniority year. This shows the base of severance pay, that is, the minimum payment amount per seniority year. In this regard, the total gross amount of severance pay of a minimum wage worker with five years seniority is to be calculated as 50 thousand 40 Liras in the year 2023.
On the other hand, according to Turkish Labor Law, the maximum amount of severance pay is not determined according to the minimum wage. The annual amount of severance pay can be as much as the retirement bonus paid to the highest civil servant for one year of service. Pursuant to the 13th paragraph of the 14th article of the Labour Code No. 1475, amended by the Act No. 2762, the annual amount of the workers’ severance pay cannot exceed the maximum retirement bonus to be paid to the highest civil servant for one year of service.
Accordingly, the severance pay ceiling in the calendar year of 2022 was applied as 15 thousand 371 liras. The gross amount of severance pay to be applied in the year 2023 has been updated as 19 thousand 982 Liras within the scope of the latest updates. After deducting the stamp duty the net amount per year is 19 thousand 831 Liras.
All employees whose last gross wage exceed this amount will be able to receive severance pay over the ceiling account. Thus, if a person who has worked at the same workplace for ten years with a wage over the severance pay ceiling is dismissed by the employer without a justifiable reason, the gross amount of the severance pay will be 199 thousand 828 Liras in the year 2023, while this figure was 153 thousand 714 Liras in the year 2022.
The employer is responsible for paying the severance pay. In case of termination of any employment contract for a reason that legally necessitates payment of severance pay, severance pay equal to 30 days’ gross wage is paid for each full year worked. The periods increasing from one year are also included in the calculation by proportioning.
During the calculation of severance pay, in addition to the wage paid to the worker, all money and benefits that can be measured in money (road allowance, meal allowance, bonus payments, social benefits and extra benefits which are made regularly and all kinds of regular similar payments) are also taken into account.
In Which Situations do Workers Deserve Severance Pay?
Workers are entitled to receive severance pay in Turkey with the following rules:
- The employee must have been dismissed by the employer without a just cause (Just causes are defined in the Labour Code No. 4857).
- The employee must have cancelled the employment contract with a just cause (Just causes for the employee are defined in the Labour Code No. 4857).
- Severance pay cannot be received in cases where the employee leaves the job voluntarily (in other word, he/she resigns).
- In order for the employee to receive severance pay, he or she must have completed at least 1 year of employment at the workplace including the probationary period.
- Severance pay can be obtained in case of leaving the job due to the compulsory military service duty for male employees, and due to marriage, within one year from the date of marriage, for female employees.
- The employee can receive severance pay when he or she retires or applies to lump-sum payment from social security institutons.
- If the employee meets the conditions other than age for retirement, he or she can resign and receive severance pay as well.
