Where an employment contract is brought to an end on the stated ground of “termination for just cause” and without the payment of any compensation, the course to be followed directly determines the outcome. For an employer can only bring the employment relationship to an end without paying severance and notice pay where there exist grounds that are exhaustively listed in Labour Act No. 4857 and that can be established by concrete evidence. The ground for termination is required to be clear, definite and capable of proof.
In practice, however, it is frequently seen that recourse is had to the heading of “conduct contrary to the rules of morality and good faith” without any sufficient legal basis. Yet if the termination is not lawful, the employee may claim severance and notice pay together with the other employment claims; and where the conditions are met, may also bring a reinstatement action.
For that reason, in terminations without compensation it is of critical importance that the calendar be followed carefully and that the application to mediation be made in good time. The rights held by the employee and the legal course to be followed are set out below in outline.
What Does Dismissal Without Compensation Mean?
Dismissal without compensation means that the employer does not pay the employee severance and notice pay when bringing the employment contract to an end.
For the purposes of Labour Act No. 4857, immediate termination without the payment of compensation is possible only where the grave grounds exhaustively listed in the statute have materialised. Those grounds must genuinely have occurred in the particular case and must be proved by the employer with clear and definite evidence. Otherwise the termination is regarded as unjustified and the employee may become entitled to severance and notice pay.
In practice, recourse is most often had to termination without compensation on the ground of “conduct contrary to the rules of morality and good faith”. What is required here, however, is that the employee’s conduct be of such gravity as to render the employment relationship intolerable, that proportionality be observed in the termination, and that the incident be of a nature capable of proof. Where these elements are not present together, the termination is regarded as unlawful.
In Which Cases Is Termination Without Compensation Possible?
Whether the employer may exercise its right of immediate termination without paying severance and notice pay depends solely on the existence of the just causes listed in Art. 25 of Labour Act No. 4857. These grounds are exhaustive and are not amenable to broad interpretation. Termination without compensation cannot be carried out in reliance on a ground not contained in the statute.
Those circumstances are addressed in detail in our note devoted to this subject, In Which Cases May the Employer Terminate the Contract for Just Cause?
The principal circumstances set out in subparagraph II of that article include the employee misleading the employer or making statements contrary to the truth, insulting the employer or members of the employer’s family, engaging in conduct contrary to honesty and loyalty such as theft at the workplace and abuse of trust, harassment, fighting or serious breaches of discipline, and absence from work exceeding the periods indicated in the statute and not founded on a just ground.
Where these conditions materialise, the employer’s right of immediate termination may arise. That said, each incident is dealt with within its own concrete circumstances; the ground relied upon is required to be clear, definite and capable of proof. If this is not achieved, the termination is regarded as unjustified.
Rights Claimable in the Event of Unjustified Termination
If a termination carried out without the payment of compensation is not lawful, the employee is not confined to severance and notice pay alone; all other employment claims may also be sought. Where the conditions are met, claims for reinstatement and even for non-pecuniary damages may also arise.
Claim for Severance Pay
In order to become entitled to severance pay, the employee must have rendered service with the same employer for at least 1 year. It is further required that the termination not be founded on the just causes regulated in the Labour Act, or that it not have been proved by the employer.
If the employer’s defence of termination for just cause is not accepted, the employee may claim severance pay in the amount of 30 days’ gross wage for each full year worked; periods exceeding one year are also taken into account on a pro rata basis. Interest at the highest rate applied to deposits runs on this claim, beginning from the date of termination.
Claim for Notice Pay
An employer which brings the contract to an immediate end without a just cause becomes liable to pay notice pay. If the conditions for termination for just cause have not materialised, the employer is deemed to have terminated without observing the notice periods.
The notice periods to be applied according to the employee’s length of service are as follows: 2 weeks for those with less than 6 months’ service, 4 weeks for those with between 6 months and 1.5 years, 6 weeks for those with between 1.5 and 3 years, and 8 weeks for those with service exceeding 3 years.
The gross wage corresponding to these periods may be claimed as notice pay.
The Right to Bring a Reinstatement Action
The non-payment of compensation does not mean that the termination is valid in every case. If the employee is employed under an indefinite-term contract, if there are at least 30 employees at the workplace, if the employee has at least 6 months’ service and if the termination is not founded on a valid reason, the avenue of reinstatement may be pursued.
The decisive matter here is time. The employee must apply to a mediator within 1 month of the date on which the notice of termination was served on them. This period is preclusive in nature and, once missed, the possibility of reinstatement is entirely extinguished.
If no settlement emerges in mediation, an action may be brought. If the court finds the termination invalid, the employee may claim wages for the period spent out of work of up to 4 months at most, together with compensation for non-reinstatement in the amount of 4 to 8 months’ wages. It is for this reason of critical importance that the 1-month application period not be missed.
Overtime, Leave and Other Heads of Claim
Termination without compensation does not extinguish the employee’s other employment claims. Whatever the reason for which the contract came to an end, claims that have accrued but remain unpaid may be sought separately.
Within this scope the employee may claim unpaid overtime pay, weekly rest day and public holiday claims, pay for annual leave that was not granted, and any claims in the nature of wages such as bonuses and premiums. Pay in respect of annual leave that was not granted falls due on the date the contract ends and is in the nature of wages. The general limitation period for overtime and other wage claims is 5 years.
Claim for Non-Pecuniary Damages
Being dismissed without compensation does not give rise to a right to non-pecuniary damages in every case. Such a claim may, by contrast, arise where the employee’s personality rights have been impaired in the course of the termination.
For instance, imputing theft to the employee without foundation, making humiliating statements at the workplace, engaging in conduct directed at the employee’s honour and standing, or using accusatory expressions liable to shake the employee’s professional reputation may cause non-pecuniary harm.
In such cases non-pecuniary damages may be sought within the framework of the provisions of the Turkish Code of Obligations. The unjustified nature of the termination alone is not, however, regarded as sufficient; proof is required that personality rights were concretely infringed and that non-pecuniary harm arose.
Burden of Proof in a Defence of Termination for Just Cause
An employer which asserts that it terminated the contract “for just cause” bears the burden of proving that assertion. The legal order regards terminations of this kind as exceptional. The ground relied upon is accordingly expected to be proved by clear, definite and concrete evidence.
The ground of termination stated by the employer cannot subsequently be changed; justification cannot be secured during the proceedings by relying on some other ground. The court makes its assessment bound by the ground written in the notice of termination.
Who Bears the Burden of Proof?
The general rule is that the party asserting a right must prove its assertion. Within this framework, an employer which argues that it terminated for just cause must support its assertion with concrete evidence.
In a defence of “conduct contrary to the rules of morality and good faith”, three matters in particular must be shown: that the incident genuinely occurred, that the act was committed by the employee, and that this conduct rendered the employment relationship intolerable. Assertions founded on supposition, suspicion or abstract characterisation do not produce this result. Where the burden of proof is not discharged, the termination is regarded as unjustified and the employee may claim their compensation rights.
Judicial Scrutiny of Termination for Just Cause
In the decisions of the Court of Cassation these assertions are subjected to narrow interpretation, and the employer is expected to support its defence with strong and concrete evidence. In terminations founded on the ground of conduct contrary to the rules of morality and good faith in particular, mere assertion is not regarded as sufficient; it is required to be shown that the act was genuinely committed and that it made it impossible for the employment relationship to continue.
The principal criteria that come to the fore in the practice of the Court of Cassation are as follows: assessments founded on suspicion are not regarded as sufficient for termination for just cause; breaches of discipline of a minor nature do not legitimise immediate termination; terminations carried out without obtaining the employee’s defence statement may be regarded as invalid; a reasonable interval must exist between the incident and the termination, and terminations carried out after a lengthy wait weaken the defence of justification.
The principle of proportionality must also be observed in the termination. Proceeding directly to termination without compensation in a case that could be remedied by a lighter sanction is not found to be lawful.
Time Limits for Bringing an Action and Limitation Periods
One of the most critical headings for an employee dismissed without compensation is the calendar. Some of the periods in this field are preclusive in nature and others are limitation periods. Missing a preclusive period brings the right of action to an end altogether. In the case of limitation, the expiry of the period renders the claim incapable of being asserted.
It is therefore important that the legal position be analysed immediately after the termination.
Time Limit for a Reinstatement Claim
Whether this claim may be asserted depends on an application being made to a mediator within 1 month beginning from the day on which the notice was served.
The period in question is preclusive; once missed, the possibility of bringing a reinstatement action comes to an end entirely and cannot subsequently be made good.
If no settlement emerges at the mediation stage, an application must be made to the labour court within 2 weeks beginning from the day on which the final minutes were drawn up.
The mistake most frequently made in practice is overlooking the fact that the period runs not from the date of termination but from the date on which the written notice was served. This distinction is decisive in calculating the period.
Limitation Period for Claims
In respect of severance and notice pay, annual leave pay, overtime pay and weekly rest day and public holiday claims, a limitation period of 5 years applies. The period begins to run on the date the claim falls due. The starting point is the date of termination for severance and notice pay, the day on which the contract ends for annual leave pay, and the payment date for wage and overtime claims.
If no action is brought within the period, the claim may be dismissed upon the other party raising a limitation objection.
Periods of a Preclusive Nature
Unlike limitation periods, preclusive periods are taken into account by the court of its own motion; they are applied even if neither party raises them.
The most important period of this nature is the 1-month period for applying to mediation afforded in respect of a reinstatement claim. Other preclusive periods may in addition be provided for in certain special statutes and collective labour agreements.
For an employee dismissed without compensation, therefore, whether the calendar has been complied with affects the outcome just as directly as the merits do.
Important warning: Time limits play a decisive role in this field. Being in the right does not on its own produce a result; once the 1-month application period afforded in respect of reinstatement is missed, the possibility of bringing an action disappears entirely. In the event of a termination without compensation, a legal assessment must therefore be carried out without loss of time and applications must be made within the applicable periods.
Frequently Asked Questions
What should an employee dismissed without compensation do first?
The content of the notice of termination and the date of service should be examined first. If reinstatement is being considered, an application to mediation must be made within 1 month; the period in question is preclusive and, once missed, this possibility comes to an end entirely. The legal position must therefore be analysed without delay.
What happens if the employer says “conduct contrary to the rules of morality and good faith”?
This is the ground of termination most frequently relied upon in practice. The assertion must, however, be proved by concrete evidence; its mere assertion is not regarded as sufficient. If the employer cannot furnish that proof, the termination is regarded as unjustified and severance and notice pay may be claimed.
Does having given a defence statement make the termination conclusively justified?
The giving of a defence statement does not on its own render the termination justified; what is decisive is the content of the statement. Defence statements given under pressure or on incomplete information may be taken into account by the court. A defence statement does not result in the employer’s assertion being treated as verified.
Is a release deed signed after termination valid?
Whether release deeds drawn up after the employment contract has come to an end can take effect depends on compliance with the conditions required by the statute. Release deeds signed before payment has been made, or before the 1-month period following termination has elapsed, are in most cases regarded as invalid.
Should reinstatement be claimed, or should compensation be sought directly?
The answer differs in every file. If the action is won, wages for the period spent out of work and compensation for non-reinstatement may be obtained. In some disputes, by contrast, claiming the heads of compensation directly may produce a more practical result; a strategic assessment must be made.
Can severance pay be obtained in the event of a termination for just cause?
If the ground relied upon by the employer genuinely is one of the circumstances listed in the statute, the employee cannot obtain severance pay. If the ground is not found justified by the court, however, severance pay may be claimed together with interest. What is decisive is whether the ground of termination has been proved.
Can an employee dismissed without compensation receive unemployment benefit?
The decisive criterion for unemployment benefit is that the employee became unemployed otherwise than through their own fault. If the employer’s assertion of termination for just cause does not reflect the truth, or if the termination is invalid, unemployment benefit may be drawn. If, by contrast, the dismissal is on account of conduct contrary to the rules of morality and good faith having genuinely been committed, this right may not arise.
Independent Legal Assessment
Two axes determine the outcome in files concerning termination without compensation: whether the employer is able to found its ground of termination on documents, and whether the employee is able to manage the time limits. In practice a significant proportion of assertions of termination for just cause are founded on minutes drawn up at the moment of termination and on witness accounts; failing to obtain a defence statement, or proceeding to terminate long after the incident, leaves the employer in a difficult position. On the employee’s side, the gravest loss arises not from the heads of compensation but from a one-month application period that has been missed.
In a concrete file the following headings should be addressed first:
- Whether the notice of termination was in writing, and documenting the date of service by a record
- Whether the ground of termination was clearly indicated in the notice, and whether it was subsequently broadened
- Whether a defence statement was obtained and whether a reasonable interval between the incident and the termination was observed
- Determining the scope of job security in terms of the number of employees at the workplace and the length-of-service conditions
- Listing severance, notice, overtime, annual leave and holiday claims in full in a single application
- Monitoring the periods for the mediation application and for bringing an action by fixing them to a calendar
Independent Legal provides advisory services to parties in disputes arising from the termination of the employment contract, from the mediation stage through to the conduct of reinstatement and monetary claim actions.