The date up to which an employee may claim wages, payment for overtime, severance pay or similar items is one of the most debated topics in labour law. Missing these periods does not extinguish the claim altogether, but it can make asserting it before a court practically impossible.
Two questions arise most frequently in practice: which item is subject to which period, and on what date the period begins to run. Avoiding a loss of rights, on both the employee’s and the employer’s side, depends on answering these two questions correctly. Indeed, where the nature of the claim is wrongly identified, an action may be brought for a time-barred claim just as a claim that is not yet time-barred may be abandoned.
Below we explain the regime of periods applied to employment claims, which item is subject to which period, the moment at which the period starts, and how the calculation is to be constructed, with examples drawn from practice.
The Function of the Statute of Limitations in Labour Law
In employment claims, the statute of limitations describes the loss of the ability to obtain wages, overtime, severance pay, payment in lieu of annual leave and similar items through the courts where they are not claimed within the period laid down by law. The expiry of the period does not extinguish the claim at its root; however, once the opposing party raises the defence of limitation, the court cannot order payment.
This institution serves a twofold function. On the one hand, the employee is encouraged to claim their rights within a reasonable span of time; on the other, legal certainty and security are secured for the employer. The correct identification of the regime of periods is therefore decisive both for setting the timetable for bringing an action and for preventing a loss of rights.
The Legal Nature of the Statute of Limitations
The statute of limitations is regulated in Articles 146 et seq. of the Turkish Code of Obligations No. 6098 and limits the assertion, by way of an action or enforcement proceedings, of a claim that has not been made within a given span of time. When the period expires the debt does not disappear; only the possibility of collection is closed off, and then only if the debtor raises the defence.
Special provisions complementing this general framework also exist in labour law. Article 32(8) of the Labour Act No. 4857 lays down a limitation period of five years for wage claims. The same period is applied in practice to items regarded as falling within the concept of wages, such as overtime pay, weekly rest day pay and pay for national and public holidays.
The Difference from the Preclusive Period
Both institutions narrow the possibility of seeking one’s rights as time passes; the consequences they produce and the manner in which they are applied, however, differ from one another.
- Where a preclusive period expires, the right itself disappears and the judge takes this into account of their own motion, even if the parties do not raise it.
- The expiry of a limitation period does not bring the claim to an end; only where the debtor raises the defence is the door to collection through an action or enforcement proceedings closed.
The distinction becomes clear when viewed through a concrete example: the period for bringing a reinstatement action is two weeks running from the date of the final minutes drawn up in mediation, and it is preclusive in nature. Once those two weeks have passed, the possibility of seeking reinstatement disappears entirely; the court takes the position into account of its own accord, even if the respondent raises no objection at all.
The Regime of Periods by Type of Claim
The period applicable to employment claims varies according to the legal nature of the item. Special periods are laid down for wages and rights treated as wages; for certain types of compensation, recourse to the general provisions has been accepted. Before entering into the calculation of the period, therefore, the nature of the claim must be established.
The most widespread error in practice is the assumption that all employment claims are subject to a single period. In fact, each item has its own regime. An incorrect characterisation may lead to the loss of the possibility of claiming on the employee’s side and to an unnecessary burden of litigation and proceedings on the employer’s side.
The One-Month Preclusive Period for a Reinstatement Claim
An employee within the scope of job security who wishes to seek reinstatement on the ground that their contract was terminated without a valid reason being given is bound by a specific time limit. The limit here is not a limitation period but a preclusive period; if it is missed, the right to claim lapses entirely and the court takes this into account of its own accord.
Under Article 20 of the Labour Act No. 4857, the employee must apply to a mediator within one month running from the date on which the notice of termination was served on them. If no application is made within this period, the right to seek reinstatement comes to an end.
If the mediation meetings close without agreement, the action must be brought within two weeks running from the date of the final minutes. As both periods are preclusive, a failure to act in time removes the possibility of bringing an action altogether. For the details of the subject, our note entitled Reinstatement Action may be consulted.
Items Subject to the Five-Year Period
Article 32(8) of the Labour Act sets the period for wage claims at five years. The concept of wages here is not limited to basic salary; it covers all monetary rights obtained by the employee in return for the work performed and bearing the character of wages. Because of this broad interpretation, many items regarded as ancillary to wages are also tied to the same period.
The principal claims subject to this regime are as follows:
- Claim for wages for the remaining term
- Discrimination compensation
- Trade union compensation
- Bad faith compensation
- Minimum living allowance (AGİ) claims for the relevant periods
- Travel, meal and fuel allowances bearing the character of wages
- Compensation for failure to reinstate, also referred to as job security compensation
- Wages for the period spent out of work
- Pay for annual leave that was not granted
- Performance and sales bonuses
- Claims for bonuses and premiums
- Pay for national and public holidays (UBGT)
- Weekly rest day pay
- Overtime pay payable in return for overtime work
- Notice pay
- Severance pay
- Claims for unpaid wages
For these items the period begins to run, as a rule, on the date on which the claim falls due. Payment for overtime, for example, becomes claimable in the payment period of the relevant month, so the period runs separately in respect of each period.
Important Note: For employment contracts that ended before 25 October 2017, the former ten-year periods may apply to certain types of compensation; for terminations after that date, the five-year periods set out above are valid.
Items Subject to the Ten-Year Period
The legislature has not laid down a special period for certain employment claims. In that case the ten-year general limitation period in Article 146 of the Turkish Code of Obligations No. 6098 comes into play. That regime is of particular importance for compensation claims tied to the ending of the employment relationship.
The principal claims falling within this scope are as follows:
- Compensation for loss of support
- Claims for pecuniary and non-pecuniary damages arising from occupational disease
- Claims for pecuniary and non-pecuniary damages arising from an occupational accident
For these items the period mostly begins to run on the date on which the employment contract came to an end. In claims based on an occupational accident or occupational disease, however, the starting moment may differ according to special criteria such as the date on which the damage and the person responsible became known. For a detailed assessment of the subject, our note entitled Action for Damages Arising from an Occupational Accident may be examined.
On What Date Does the Period Begin to Run?
The starting moment varies according to the type of claim. Before entering into the calculation, therefore, the date on which the item fell due must be established.
A frequent error is the assumption that, for all employment claims, the period begins on the date of termination. In reality, for some items the period starts to run while the employment relationship is still continuing; for others, what is decisive is the ending of the contract.
Claims Tied to the Ending of the Contract
For claims arising upon the ending of the employment relationship, the period runs as a rule from the date of termination. These items are rights that cannot be claimed while the contract continues and that arise only when the relationship ends.
The following claims fall within this group:
- Bad faith compensation
- Compensation for failure to reinstate
- Notice pay
- Severance pay
Wage Claims and Claims of a Periodic Nature
For wages and rights treated as wages, the period runs not from the date of termination but from the date on which the claim falls due. These items are rights that may be claimed while the employment relationship is continuing and that arise in specific periods.
The principal claims in this group are as follows:
- Bonuses and premiums
- Pay for national and public holidays
- Weekly rest day pay
- Overtime pay
- Wage claims
For the items listed, a separate period runs for each period. For unpaid overtime, the period begins on the date on which the wage relating to the month in question ought to have been paid.
The Starting Point for Severance and Notice Pay
As severance pay and notice pay are items that arise only when the employment relationship ends, the period begins to run as of the date of termination.
In practice the day on which the notice period expires and the date of termination are from time to time confused with one another. What must be taken as the basis, however, is the date on which the contract legally came to an end.
For this reason the accurate establishment of the date of termination is decisive for the correctness of the calculation of the period.
The Starting Point for Occupational Accident and Compensation Claims
For compensation claims arising from an occupational accident or occupational disease, the starting point is subject to special rules compared with other employment claims.
For these items the period begins to run, as a rule, on the date on which the damage and the person responsible became known. In events giving rise to disability, permanent incapacity for work or death, the extent of the damage becomes apparent over time, so the starting moment may vary from file to file.
In claims of this kind, therefore, the starting date must be assessed separately within the particular circumstances of each event.
Events That Suspend and Interrupt the Period
In some cases the limitation period pauses in its running, and in others it is reset and begins afresh. When making the calculation, therefore, it is not enough to look only at the starting date.
In practice, steps such as bringing an action, applying for mediation or commencing enforcement proceedings produce consequences that directly affect the calculation.
What Does Interruption Mean?
Interruption means that the running period disappears and that, once the cause of interruption has ended, the period begins to run from the beginning. In that case the time elapsed before the interruption is not taken into account; the period is reset.
If, for example, an action is brought in respect of an overtime claim when only a short time remains before the period expires, the limitation period is interrupted. When the proceedings end, the period runs afresh from the beginning. In this respect interruption produces a powerful effect that prevents a loss of rights in employment claims pursued over a long period.
Events That Interrupt the Period
Within the framework of the provisions of the Turkish Code of Obligations, the principal events that interrupt the period are as follows:
- The existence between the parties of a written acknowledgement establishing the existence of the debt
- The provision of security for the debt
- Payment of part of the debt
- Acknowledgement of the debt by the debtor in whole or in part
- The commencement of enforcement proceedings
- The bringing of an action
When one of these events occurs the period is interrupted and, once the cause of interruption has disappeared, it begins to run afresh.
What Does Suspension Mean?
Suspension means that the period does not run at all for a given span of time and that, once the cause of suspension has disappeared, it continues from where it left off.
The difference from interruption is this: with suspension the time already elapsed is preserved and the counter is not reset; it is merely put on hold temporarily.
Events That Suspend the Period
Under the same Code, the principal events that suspend the period are as follows:
- Compelling circumstances amounting to force majeure
- For persons under guardianship, the period during which the guardianship continues
- Claims arising between a parent and a child for as long as custody continues
- For claims between spouses, the continuation of the marital union
- Situations in which it is legally impossible for the creditor to bring an action
In these cases the period temporarily does not run; once the obstacle has been removed, it continues to run from where it left off.
The Effect of an Application for Mediation
In employment claims, an application for mediation is a step that directly affects the calculation of the period. As pre-action mediation is mandatory in labour law disputes, this stage constitutes a distinct phase that must be separately assessed in the calculation.
Under Article 3 of the Labour Courts Act No. 7036, the limitation period is suspended upon the application for mediation. When the process closes, it continues to run from where it left off. The time elapsed between the date of the application and the date on which the final minutes were drawn up is not added to the period.
To give a concrete example: if a mediator is approached in respect of a wage claim when 3 months remain before the period expires, the counter starts running again from where it left off when the process ends, and the employee has 3 months in which to bring an action. For the details of the subject, our note entitled Mandatory Mediation in Labour Actions may be consulted.
Calculating the Period
For a correct calculation, the type of the claim must first be established, then the starting date, and finally whether there is any circumstance suspending or interrupting the period. Assessments made without regard to these three elements give rise both to a loss of rights and to the risk of an unwarranted action.
A particular order must therefore be followed in the calculation.
Basic Elements to Be Observed in the Calculation
The following headings must be assessed together:
- Whether a mediation process took place
- The existence of a circumstance suspending or interrupting the period
- The date on which the period began
- Whether the applicable period is 5 years or 10 years
- The type of the claim (wages, overtime, severance pay and the like)
The accurate determination of these elements is a precondition of the correctness of the calculation.
Establishing the Start and End Dates
The period begins, as a rule, on the date on which the claim falls due and ends at the close of the day on which the relevant period expires.
If, for example, the date on which a wage claim ought to have been paid is 01.03.2020 and that item is subject to the five-year regime, the period will come to an end on 01.03.2025.
If within that span of time there is a circumstance such as recourse to mediation, the bringing of an action or an acknowledgement of the debt, the calculation takes a different shape.
The Effect of the Mediation and Litigation Process
When making the calculation, the mediation stage must be addressed separately. The period is suspended upon the application; it continues from where it left off once the process closes.
Where an action is brought or enforcement proceedings are commenced, the period is interrupted and begins to run from the beginning once the proceedings or the litigation have ended.
For this reason, careful calculation of the time elapsed at the pre-action stage in particular determines the outcome of the assessment.
Common Errors in the Calculation
The following mistakes are frequently encountered in practice:
- Missing the time for bringing an action because the period was calculated incorrectly
- Overlooking circumstances that interrupt or suspend the period
- Including the time spent in mediation within the period
- Assuming that the period begins, in every case, on the date of leaving employment
- Supposing that all employment claims are subject to the same regime
These errors can lead to serious losses of rights, particularly in high-value files.
Can a Time-Barred Claim Be Made?
The expiry of the period does not mean that the claim has disappeared entirely. A time-barred claim retains its existence in law; however, if the debtor raises the defence, its collection by way of an action or enforcement is not possible.
Bringing an action in respect of a time-barred item is therefore theoretically possible; but once the respondent raises the objection of limitation, the court will dismiss the claim.
What Is the Defence of Limitation?
The defence of limitation is a means of defence that allows the debtor to avoid payment by asserting that the period has expired. Unless this defence is raised, there is no question of the judge taking the period into account of their own accord.
Accordingly, if the respondent does not raise the defence, the court may order payment even in respect of a time-barred claim.
Does the Judge Take the Period Into Account Unprompted?
The statute of limitations is not a period relating to public order but bears the character of a defence. The judge cannot therefore take it into account of their own motion; the period must without fail be raised by the respondent.
This point constitutes one of the clearest distinctions between the statute of limitations and the preclusive period. Whereas with preclusive periods the judge is obliged to take the position into account of their own accord, no such obligation exists with the statute of limitations.
Payment of a Time-Barred Debt
If a time-barred debt is paid by the debtor, the payment made is regarded as valid and the return of the sum paid cannot be sought. This is because the statute of limitations is an institution that does not extinguish the debt but merely restricts its being claimed through the courts.
The voluntary payment of a time-barred debt therefore constitutes a legally valid performance and cannot be recovered by relying on the provisions on unjust enrichment.
Independent Legal Assessment
The regime of periods often determines the outcome of employment claim files before any debate on the merits. Before the statement of claim is prepared, each item must be classified separately, the dates on which they fell due must be supported by documents, and the days elapsed during the mediation process must be calculated separately. Particularly in long periods of employment, part of the periodic claims may be time-barred while the remainder is still claimable.
On the employer’s side, raising the defence of limitation in time and in the proper form is of critical importance. It must not be forgotten that, where the defence is not raised, the judge cannot take the position into account of their own accord.
In a particular file, the following headings must be examined as a priority:
- Determining separately whether each claim item is subject to the 5-year or the 10-year regime
- Establishing a separate due date for each payment period in periodic claims
- Recording the date of termination in a document, distinguishing it from the expiry of the notice period
- Deducting from the calculation the period between the dates of the mediation application and the final minutes
- Establishing, with concrete evidence, the moment of knowledge in occupational accident and occupational disease claims
- Reviewing the former regime of periods for relationships that ended before 25 October 2017
Independent Legal provides advisory services at every stage of disputes arising from employment claims, from the analysis of periods through the mediation process to the conduct of litigation.