Severance pay is a security payment made in return for the employee’s wear and labour when the employment relationship between employee and employer ends for certain reasons listed in the law. Under our labour legislation, certain basic criteria are sought — both in terms of duration and the manner of termination — in order to be entitled to severance pay.
1. At Least One Year of Service
For an employee to be entitled to severance pay, they must have worked for at least 1 full year at the workplace or workplaces of the same employer. For work lasting less than one year, no right to severance pay arises, regardless of how the employment contract ends.
2. Termination of the Contract in a Manner That Allows Severance
Not every departure from a job gives rise to severance pay. As a general rule, if the employee resigns of their own accord without a just cause, the right to severance pay lapses. However, the employee is entitled to severance in the following cases:
- The employer terminating the contract for reasons other than the employee’s conduct contrary to the rules of morality and good faith.
- The employee terminating the contract with just cause due to health reasons, the employer’s breach of the rules of morality and good faith, or compelling reasons.
- Leaving work due to compulsory military service.
- Completion of the premium days and insurance period required to obtain retirement rights or to be granted an old-age pension.
- A female employee ending the contract of her own volition within 1 year from the date of her marriage.
When calculating severance pay, in addition to the employee’s last gross wage, regular monetary benefits or benefits measurable in money provided to them (transport, meal allowance, bonuses, etc.) are also taken into account.