Navigating employment termination in Turkey requires a thorough understanding of the country's labor laws, primarily governed by Labor Law No. 4857. Both employers and employees have specific rights and obligations during the termination process, whether the separation is initiated by the employer or the employee. Adhering to the legal framework is crucial to ensure compliance and avoid potential disputes or claims.
Properly managing terminations involves understanding notice periods, calculating severance pay, identifying valid grounds for dismissal, and following strict procedural requirements. Failure to comply with these regulations can lead to significant legal challenges, including claims for wrongful dismissal and financial penalties.
Notice Period Requirements
When terminating an employment contract for reasons other than just cause (immediate termination), employers are generally required to provide employees with a notice period. The length of this period is determined by the employee's length of service with the company. During the notice period, the employment relationship continues, and the employee is typically entitled to paid time off to seek new employment. Alternatively, the employer can terminate the employment immediately by paying the employee their salary for the corresponding notice period in lieu of notice.
The minimum statutory notice periods are as follows:
| Length of Service | Minimum Notice Period |
|---|---|
| Less than 6 months | 2 weeks |
| 6 months to 1.5 years | 4 weeks |
| 1.5 years to 3 years | 6 weeks |
| More than 3 years | 8 weeks |
These are minimum periods, and employment contracts or collective bargaining agreements may stipulate longer notice periods.
Severance Pay Calculations and Entitlements
Severance pay, known as "seniority indemnity" (kıdem tazminatı), is a statutory entitlement for employees whose employment contract is terminated by the employer for reasons other than the employee's gross misconduct, or who resign for certain valid reasons (e.g., military service, retirement, or termination by the employee due to the employer's just cause). To be eligible, an employee must have completed at least one full year of service with the same employer.
Severance pay is calculated based on the employee's last gross salary for each full year of service, pro-rated for any partial year. The calculation is based on the employee's "last gross salary," which includes basic wage plus regular benefits provided by the employer (e.g., housing allowance, food allowance, transportation allowance), provided these benefits are included in the calculation base according to the law and relevant court precedents.
The formula is:
Severance Pay = (Last Gross Salary per day * 30) * (Total Years of Service + Pro-rated Months/12)
There is a statutory ceiling for severance pay, which is updated semi-annually. The amount payable per year of service cannot exceed this ceiling, regardless of the employee's actual gross salary.
Grounds for Termination
Employment contracts in Turkey can be terminated based on various grounds, broadly categorized as termination with cause (immediate termination) and termination without cause (requiring notice or payment in lieu of notice).
Termination with Cause (Just Cause)
Immediate termination without notice or severance pay is permissible only under specific circumstances defined as "just cause" in the Labor Law. These grounds are typically related to serious misconduct by the employee or force majeure events that make the continuation of the employment relationship impossible. Examples include:
- Dishonesty, fraud, or breach of trust.
- Sexual harassment or other serious misconduct in the workplace.
- Refusal to obey lawful instructions.
- Being arrested or detained, preventing absence for more than the notice period.
- Force majeure preventing the employee from working for more than one week.
The employer must terminate the contract within six working days of learning about the just cause and within one year of the occurrence of the event, except for acts involving financial gain for the employee.
Termination Without Cause (Valid Cause or Employer's Initiative)
Termination without cause requires providing the statutory notice period or payment in lieu of notice, and generally triggers the obligation to pay severance pay if the employee is eligible. For employees covered by job security provisions (working in workplaces with 30+ employees and with at least 6 months of service), the employer must also demonstrate a "valid cause" for termination. Valid causes can be related to:
- Employee's competence or behavior: Poor performance, frequent absenteeism, disruptive behavior (if not severe enough for just cause).
- Requirements of the workplace, business, or job: Restructuring, redundancy, changes in technology, economic difficulties.
Terminations based on valid cause require a written notice stating the reason and, in some cases, providing the employee an opportunity to present a defense.
Procedural Requirements for Lawful Termination
To ensure a termination is lawful, employers must follow specific procedural steps, particularly when terminating employees covered by job security provisions based on a valid cause related to their competence or behavior.
Key procedural steps often include:
- Written Notice: The termination notice must be in writing and clearly state the reason for termination.
- Reason for Termination: The stated reason must be clear, specific, and justifiable under the law.
- Opportunity to Defend (for behavioral/performance reasons): Before terminating an employee for reasons related to their behavior or performance, the employer must typically give the employee a written warning about the issue and provide them with an opportunity to present a defense against the allegations.
- Consultation with Employee Representative (in some cases): In workplaces with employee representatives, consultation might be required depending on the reason for termination and the workplace structure.
- Payment of Entitlements: Ensure all final payments, including notice pay (if applicable), severance pay (if eligible), unused annual leave pay, and other accrued benefits, are calculated and paid upon termination.
- Issuance of Documents: Provide the employee with necessary documents, such as a service certificate (indicating the nature of the job and duration of service) and termination notice.
Failure to follow these procedures, even if a valid reason exists, can render the termination procedurally unfair and lead to a wrongful dismissal claim.
Employee Protections Against Wrongful Dismissal
Turkish labor law provides significant protection against unfair or wrongful dismissal, particularly for employees covered by job security provisions. These provisions apply to employees working in workplaces employing 30 or more employees and who have completed at least six months of service under the same employer (excluding certain managerial positions).
For these protected employees, termination based on a valid cause must be proven by the employer. If an employee believes their termination was unfair or lacked a valid cause, they can file a lawsuit for reinstatement within one month of receiving the termination notice.
If the court finds the termination was wrongful (either lacking a valid cause or failing to follow proper procedure), the employer may be ordered to reinstate the employee. If the employer chooses not to reinstate the employee, they must pay the employee compensation ranging from four to eight months' salary, in addition to the statutory severance pay and notice pay (if not already paid).
Common pitfalls leading to wrongful dismissal claims include:
- Failing to provide a valid reason for termination.
- Not providing the reason in writing.
- Failing to give the employee an opportunity to defend themselves (when required).
- Terminating based on discriminatory grounds (e.g., union membership, pregnancy, religion).
- Not adhering to the correct notice period or paying in lieu of notice.
- Incorrectly calculating or failing to pay severance indemnity.
Understanding and strictly adhering to these legal requirements is essential for employers operating in Turkey to ensure compliant and legally sound termination processes.
