Severance and notice pay are among the most debated topics in the workplace. These severance payments, which employees are entitled to when they leave or are dismissed from their jobs, will remain one of the most important safeguards in labor law in 2025. Severance pay is paid in return for the employee’s long years of service, while notice pay is paid if the notice periods granted to the parties prior to the termination of the employment contract are not observed.
What is Severance Pay?
Severance pay is compensation paid to an employee who has worked for at least one year at the same workplace or for the same employer, provided certain conditions are met upon termination of employment. This compensation is considered a reward for the employee’s years of service.
- It ensures job security for the employee.
- Protects the rights of long-term employees.
- It secures the worker’s future financial security.
What is Severance Pay?
Notice pay is compensation paid when the obligation to give prior notice, granted to the parties in the event of termination of the employment contract, is not fulfilled.
- The employer must give the employee notice at specified intervals before dismissing them.
- The employee is also obligated to observe the same periods before leaving the job.
- If the notice period is not observed, severance pay shall be paid.
Seniority Compensation Conditions 2025
The following conditions must be met in order to be eligible for severance pay in 2025:
- The employee must have worked for at least 1 year under the same employer.
- Termination of the employment contract by the employee for just cause
- The employer’s unfair dismissal of the employee
- Resignation due to military service, retirement, or marriage
- Claim by the heirs in the event of the worker’s death
Notice Compensation Conditions 2025
To be entitled to severance pay, the employment contract must be of indefinite duration and the notice period must not have been observed upon termination.
The notification periods are as follows:
- For employees with 0-6 months of service: 2 weeks
- For employees with 6-18 months of service: 4 weeks
- For employees with 18-36 months of service: 6 weeks
- For employees with 3 years or more of service: 8 weeks
Severance Pay Calculation 2025
Severance pay is calculated based on the employee’s gross salary. This salary includes regular payments such as transportation, meals, and bonuses in addition to the base salary.
Formula: Length of service (years) x Gross salary = Severance pay amount
- One month’s gross salary is paid for one year.
- 10 yıl çalışan bir işçi için 10 aylık brüt ücret ödenir.
- The severance pay ceiling for 2025 is determined by the Ministry of Treasury and Finance.
Notice Compensation Calculation 2025
Notice pay is calculated based on the gross salary corresponding to the notice periods determined according to the employee’s seniority.
Example:
- The notice period for an employee who has worked for 2 years is 6 weeks.
- If the gross salary is 20,000 TL, then 20,000 / 30 x 42 days = 28,000 TL severance pay is paid.
Supreme Court Decisions on Severance Pay and Notice Pay
Supreme Court precedents play a guiding role in compensation cases. As of 2025, the Supreme Court:
- Regularly paid premiums must be included in the seniority calculation,
- The net salary will be used as the basis for severance pay, not the gross salary.
- It consistently states that if the employer terminates the employment unfairly, both seniority and notice compensation must be paid.
Statute of Limitations on Severance Pay and Notice Pay
- Statute of limitations for severance pay: 5 years
- Statute of limitations for severance pay: 5 years. If no lawsuit is filed within this period, the right to compensation is lost.
Justified Grounds for Termination in Severance Pay
An employee may be entitled to severance pay by terminating the employment contract for just cause under certain circumstances. These circumstances are clearly specified in the Turkish Labor Code.
- Non-payment or persistent delay in payment of wages
- Work conditions that endanger the health of workers
- Employer’s conduct contrary to the rules of ethics and good faith
- The employee’s departure for active military service
Calculation Errors in Severance Pay
The most common mistake made when calculating severance pay is considering gross pay rather than net pay. Regular payments such as travel, meal, and bonus allowances are included in gross pay. Excluding these payments results in a loss of rights for the employee.
In addition, the employer’s unlawful dismissal of the employee also leads to incorrect calculations. Courts collect the employer’s underpayments with interest. Therefore, both employees must be aware of their rights and employers must make careful calculations.
Employee Responsibilities Regarding Notice Compensation
Notice pay may be the responsibility of both the employer and the employee. The employee must comply with the statutory notice periods when leaving the job.
- The employee’s resignation without observing the notice period
- Resigning suddenly on the grounds of finding a new job
- Terminating the employment contract without giving written notice to the employer
- Obligation to pay compensation to the employer due to wrongful termination
Employer’s Obligations Regarding Notice Compensation
The employer’s most important obligation regarding severance pay is to comply with the legal notice periods when dismissing an employee. These periods are determined based on the employee’s seniority and aim to allow the employee time to find new employment. If the employer fails to comply with these periods, they are obligated to pay the employee severance pay.
Additionally, it is a legal requirement for the employer to provide the employee with a written termination notice during the dismissal process. In cases of improper or verbal termination, courts may rule in favor of the employee and order the employer to pay both notice and seniority compensation. Therefore, employers must carefully manage the process.
Employee Rights Regarding Severance Pay
Severance pay is compensation for the employee’s years of service and is of great importance in terms of job security. The employee can claim this right when the conditions specified in the law are met. In particular, severance pay must be paid if the employee leaves the job for a valid reason or is unfairly dismissed by the employer.
Not knowing their rights often prevents workers from receiving compensation or results in them receiving less than they are entitled to. Therefore, an employee who leaves their job should keep their pay slips, employment contract, and any supplementary payment documents. Furthermore, knowing that severance pay is calculated based on gross salary ensures that the worker makes the correct claim.
Important Considerations for Employees
- Investigate the grounds for just cause termination before leaving your job.
- Use the gross salary as the basis for the compensation calculation.
- Keep your documents (contract, pay slip, payment receipt).
- To avoid losing your rights, file a lawsuit in a timely manner.
Points to Consider for Employers
- Terminations must be based on valid reasons.
- Notification periods must be observed.
- Fringe benefits paid to the employee should be included in the account.
- Liability for damages arising from irregular transactions should be avoided.
Risks of Compensation Claims from the Employer’s Perspective
Employers may be required to pay substantial compensation if they take incorrect steps during the termination process. This situation can also negatively impact the company’s financial structure.
- Awarding severance pay and notice pay due to wrongful termination
- Obligation to pay the interest due as a result of an underpayment
- Prolongation of cases due to Supreme Court reversal decisions
- Additional compensation claims that the employee may file (overtime, leave pay, etc.)
Legal Support with Atakan Ayhan Law Firm
Seniority and notice period compensation lawsuits require technical knowledge and the correct interpretation of current case law. Incorrect steps can lead to financial losses for both the employee and the employer.
Attorney Atakan Ayhan and his team provide professional support to their clients in compensation calculations, litigation processes, and labor-management disputes, drawing on their experience in labor law.
In 2025, seniority and notice pay will continue to be important in terms of protecting employee rights and regulating employer obligations. Accurate calculation, compliance with deadlines, and managing processes with legal support ensure that the parties obtain their rights without suffering any detriment.
