Employees who meet the requirements for retirement (to be entitled to old-age pension) and want to retire, have the right to terminate their contracts due to retirement and receive severance pay.
According to the Turkish Labour Law, it is essential that the employee who terminates his/her employment contract due to retirement is to be paid severance pay and unused annual leave wages, if any, as of the date of termination.
The employer cannot unilaterally decide to pay severance pay at a later date.
However, the employee and the employer may agree to pay severance pay or unused leave wages at a later date. In other words, the method of not paying severance pay and remaining annual leave cannot be preferred solely by the employer’s/company’s decision without the employee’s written consent.
If the employee continues to work without receiving the severance pay and the remaining annual leave wage to be paid, in this case there would be two different scenarios:
If the employee terminates the employment contract by resigning during the post-retirement working period, the employee can receive the severance pay with the wage and interest on the date of retirement, or if the parties agree, the severance pay can be paid without interest based on the last wage on the date of resignation. On the other hand, if the parties agree, the last wage (the wage at the date of the last termination of the employment contract) can also be taken into account.
In the second option, there is a possibility that the post-retirement working period will end by deserving a new severance pay. In this case, the employee will receive severance pay for the entire severance periods (both for the period pre-retirement and post-retirement) based on the last wage he/she deserves.
If the employee retires and the severance and/or unused annual leave fee will not be paid, it would be appropriate to stipulate how the payments will be made in a protocol to be agreed upon by the parties.
Regardless of how the employee’s employment contract ends in the post-retirement period, the remaining annual leave pay must be calculated based on the last wage at the date of termination.
