What is Severance Pay?
Severance pay, pursuant to Article 14 of the Labor Law No. 1475 which remains in effect, is compensation that must be paid to workers or their heirs when certain conditions are met. It is paid at the rate of 30 days' gross dressed wage for each full year of service.
Conditions for Severance Pay Eligibility
For a worker to be eligible for severance pay:
• They must have worked for at least 1 year under the same employer
• The employment contract must have been terminated for reasons specified by law
Termination cases qualifying for severance pay:
• Termination by employer without just cause (excluding violations of moral and good faith rules)
• Termination by employee for just cause (health, violations of moral and good faith rules, etc.)
• Termination due to mandatory military service
• Termination by female worker within 1 year of marriage
• Termination to receive retirement, old age, or disability pension
• Death of the worker
Severance Pay Calculation
Calculation is based on the worker's gross dressed wage. Items included in the dressed wage:
• Base (core) wage
• Meal allowance
• Transportation allowance
• Regularly paid bonuses and premiums
• Food and fuel assistance
• Housing allowance
Calculation formula: Gross dressed wage × Number of years worked = Gross severance pay. Only stamp duty (0.759%) is deducted from severance pay; income tax and social security premiums are not deducted.
Severance Pay Ceiling
Severance pay is limited by the ceiling amount determined annually. The ceiling is calculated by adding the service allowance to the highest-ranking civil servant's salary. If the worker's gross wage exceeds the ceiling, the ceiling amount is used in the calculation.
Statute of Limitations
The statute of limitations for severance pay claims is 5 years. This period starts from the date of termination of the employment contract.
Severance Pay for Part-Time Workers
Part-time workers are also entitled to severance pay. However, the calculation is based on the total period elapsed since the start date, not actual working hours.
Conclusion
Severance pay is one of the most fundamental rights of workers. Knowing the eligibility conditions and calculation method prevents loss of rights for workers. Professional legal consultation during the employment contract termination process ensures complete protection of compensation rights.