In working life, health problems, family obligations or personal reasons may give rise to a need to stay away from work for a period. Unpaid leave, which is resorted to in such cases, is an arrangement resting on agreement between the parties, under which no wage is paid for its duration and the employment relationship is not brought to an end. During this period the contract does not disappear; it is merely suspended.
The arrangement sometimes arises on the employee’s application and sometimes on the employer’s proposal. The rule, however, does not change: unpaid leave rests on the corresponding intentions of the parties. Placing an employee on leave without obtaining their consent, or failing to attend work without the employer’s acceptance, may give rise to serious legal consequences for both sides.
In this briefing note we examine the legal nature of unpaid leave, the procedure by which it is taken, the conditions required for its validity, its effect on the rights and obligations of the parties, and the points that generate the most debate in practice.
The Concept of Unpaid Leave
Definition
Unpaid leave, which has not been given detailed regulation in the legislation, is an institution shaped largely by the case law of the Court of Cassation. In essence it denotes the temporary suspension, by mutual agreement between employee and employer, of the obligations to perform work and to pay wages for a defined period of time. During this period the employee does not perform work, and as a rule the employer does not come under an obligation to pay wages.
Legal Nature: Suspension of the Contract
Unpaid leave is not a transaction that brings the employment relationship to an end; the consequence it produces is merely a state of suspension. Throughout the suspension the principal obligations of the parties are halted, while the contractual bond continues to exist. When the period expires the employee must resume work and the employer must take them back into employment.
Attaining a particular length of service at the workplace is not required for this arrangement. An employee who has only just started work, or whose length of service is short, may also take unpaid leave provided that there is mutual consent.
How Unpaid Leave Is Obtained
The rule is agreement between the parties. Just as an employee cannot absent themselves from work of their own volition, the employer cannot place its personnel on unpaid leave without obtaining approval. In practice the process begins in one of two ways.
On the Employee’s Request
An employee who is unable to work for a defined period for reasons of health, family, education or personal circumstances may make a written application to the employer and request unpaid leave. Where the application is accepted, the contract is suspended for the period agreed upon.
The employer is under no obligation to grant such a request. Where the request is refused, the employee must continue to perform their obligation to work.
On the Employer’s Proposal
A temporary contraction in the volume of work, economic difficulties or similar compelling circumstances may lead the employer to propose unpaid leave. Nevertheless, as a rule such an arrangement cannot be implemented without obtaining the employee’s express and written approval.
An employee placed on unpaid leave without consent being sought may, depending on the circumstances, acquire the right to terminate for just cause.
Conditions Required for Validity
Although it is not regulated in detail by statute, unpaid leave acquires legal validity within the framework of the principles adopted in practice and in the decisions of the Court of Cassation. For an unpaid leave arrangement to be regarded as lawful, the following elements must be assessed together.
Mutual and Express Consent
The basis of the arrangement is the corresponding intentions of the two parties; the wish of one party alone is not sufficient to produce an effect. Just as an employee cannot take unpaid leave of their own accord, the employer cannot place its personnel on leave without obtaining approval. Consent is expected to be expressed with a clarity that leaves no room for doubt.
Recording the Arrangement in Writing
Although the legislation does not lay down an express requirement as to form, the arrangement should be based on a written document in order to facilitate proof and to prevent disputes that may arise later.
The document drawn up must set out in full the date on which the leave begins, the date on which it will end, and the signatures of the parties.
The Period Being Defined
Leave must be granted for a defined period of time. Arrangements that do not state a duration, or that contain vague stipulations such as “until business recovers”, carry legal risk.
Unpaid leave of a defined duration means the temporary suspension of the contract, and on expiry of the period the employee must resume work.
Consequences of the State of Suspension
Unpaid leave does not extinguish the contract; it gives rise only to suspension. During this period the employee does not perform work and the employer does not pay wages, while the employment relationship retains its existence in law. On expiry of the period the parties continue to perform the obligations arising from the contract.
Consequence of an Arrangement Contrary to Consent
As regards an employee placed on unpaid leave without their express approval being obtained, it may be concluded that a substantial change has been made to the working conditions. In that event the employee may have recourse to termination for just cause and may become entitled to severance pay.
Where there is a documented request, the employer must grant up to 4 days of unpaid travel leave; taking annual leave in separate parts does not alter that 4-day period, and the parties may extend it by agreement.
Cases of Unpaid Leave Arising from Statute
Although the general basis of the institution is mutual consent, in certain cases the right to unpaid leave arises directly from statute. In those situations the leave is not left to the employer’s discretion but is in the nature of a right that must be granted upon the employee’s request.
Unpaid Travel Leave
An employee who is to spend their paid annual leave outside the locality in which the workplace is situated may, provided they document this and make a request, ask for unpaid travel leave for the time to be spent on the outward and return journeys. In that case the employer is obliged to grant unpaid travel leave of up to four days in total.
The period granted as travel leave is not counted within the period of annual leave.
Unpaid Maternity Leave After Childbirth
Although in practice this post-natal leave is dealt with under the heading of unpaid leave, its legal nature differs from classic unpaid leave; it is a special case resting directly on statute rather than on agreement between the parties. The provision is found in Art. 74 of the Labour Act. When a female employee has exhausted the paid leave periods provided for before and after childbirth, she may, if she so requests, take up to 6 months of unpaid leave.
Labour Act No. 4857, Art. 74
“If she so requests, a female employee shall be granted unpaid leave of up to six months following the completion of the sixteen-week period, or, in the case of multiple pregnancy, following the eighteen-week period.”
The practical consequences of the provision may be summarised as follows: since unpaid maternity leave extending to six months is a statutory right of the employee, the employer has no power to refuse the request and the leave may be taken unilaterally. That period does not replace paid annual leave; unpaid leave exceeding six months, on the other hand, is possible only with the employer’s acceptance.
Where an employer fails to allow statutory maternity leave to be taken, the employee may terminate the employment contract for just cause and claim severance pay.
Unpaid Leave on Account of Military Service
Compulsory military service is also treated in practice as falling within the scope of unpaid leave, yet in its nature it differs from ordinary unpaid leave. What is involved here is not leave resting on agreement between the parties but a special situation arising from statute.
The relevant provision – Art. 31 of the Labour Act
Article 31 of Labour Act No. 4857 governs the re-engagement, after completion of service, of an employee who has left the workplace on account of military service. Under the provision, where an employee who has left for compulsory military service notifies the employer within two months of the end of that service that they wish to return to work, the employer is obliged to engage that person immediately if there is a vacant post and, if there is none, in the first position that becomes available, giving them priority over other candidates. Throughout military service the employment contract is regarded in practice as suspended.
The consequences it produces
Throughout military service the contract is deemed suspended; since there is no actual work during this period, no wage is paid either. That suspension rests not on the intentions of the parties but directly on statute. Where the employee applies within 2 months of the date of discharge, the employer must re-engage them if the conditions are met; where this obligation is not fulfilled, the employee acquires the possibility of claiming compensation.
Important note: An employee who leaves employment on account of military service becomes entitled to severance pay if the conditions are met. In this respect military service differs from ordinary unpaid leave arrangements and may at the same time produce the consequence of termination of the contract.
Other Cases Not Expressly Regulated by Statute
The Labour Act has made provision for unpaid leave only in respect of a limited number of special situations. Arrangements falling outside these rest on the mutual agreement of the parties and on the practice formed by judicial decisions.
The situations that most frequently form the subject of a request for unpaid leave in practice are the following:
Prolonged illness and treatment: Where an employee is unable to work for a considerable period for reasons of health, the parties may agree on unpaid leave. The contract is suspended; the obligations to perform work and to pay wages are halted. Periods spent on medical leave are, however, subject to a separate assessment and may differ as regards the statutory termination periods.
Family and compelling personal grounds: The serious illness of a close family member, their becoming dependent on care, an obligation to be abroad and similar reasonable grounds may form the basis of a request for unpaid leave. What is decisive in these cases is the employer’s acceptance.
Leave for educational and academic purposes: Unpaid leave may be requested for the purpose of study in Türkiye or abroad, a master’s degree, a doctorate or professional development. The length of the period is determined by agreement between the parties.
Compelling reasons and temporary cessation of work: In cases such as economic contraction, natural disaster or a temporary halt in production, the employer may propose unpaid leave. However, implementing the arrangement without the employee’s express consent is legally risky; an arrangement imposed against consent may, depending on the circumstances, constitute a ground for termination for just cause on the employee’s part.
General framework
The situations listed above are not in the nature of a unilateral right arising from statute. Accordingly, just as an employee’s request for unpaid leave imposes no obligation on the employer to accept it, an offer by the employer does not bind the employee; in both situations it is of great importance that the arrangement be documented in writing.
Otherwise an unpaid leave arrangement may, at a later stage, lay the ground for disputes over termination of the contract, severance pay or absenteeism.
Failure to Return to Work and Refusal to Re-engage After Leave
Since unpaid leave does not bring the contract to an end, the parties are expected to perform their obligations on expiry of the period. A failure to resume work after the leave, or a refusal to admit the employee back into employment, produces significant consequences for both parties.
If the Employee Does Not Return to Work
A failure to resume work without valid excuse despite expiry of the period may be characterised as absenteeism. In such a case the employer acquires the possibility of terminating for just cause the contract of an employee who fails to attend work without excuse despite being called upon to do so. Where termination for just cause takes place, the employee cannot claim severance or notice pay. Where, on the other hand, there is illness, force majeure or a similar legitimate impediment, the position is assessed separately.
A request by the employee that the leave be extended does not of itself produce an effect; the employer’s approval is required for that.
If the Employer Refuses to Re-engage
A refusal to take back an employee who wishes to resume work at the end of the period may be assessed as meaning that the contract has been terminated by the employer. In that event the employee becomes entitled to severance and notice pay if the conditions are met; a refusal to re-engage may in some cases amount to wrongful termination, and the employee may also claim the other entitlements arising from termination (wages, leave and similar items).
Where the refusal to re-engage can be based on a legitimate ground, the legal consequences take a different shape.
Wages, Fringe Benefits and Insurance During the Leave
Since unpaid leave gives rise to a state of suspension, the principal obligations of the parties are temporarily halted during this period. The employee does not perform work; nor, as a rule, does the employer come under an obligation to pay wages. The implications for wages and fringe benefits are as follows:
Wages: Since the obligation to perform work is suspended, no wage is paid to the employee throughout the leave, and this period is not counted as time worked.
Meal, travel and bonus payments: Regular payments in the nature of wages (such as meal allowances, travel assistance, bonuses and gratuities) do not, as a rule, accrue throughout this period. The parties may agree otherwise by contract; the employer may choose to continue these payments in whole or in part, but cannot be compelled to do so.
Fringe benefits: Facilities such as private pension contributions, private health insurance and transport services are also in principle suspended. Workplace practice or a contractual provision may nevertheless provide for a different solution.
SGK contributions: As there is no actual work, no SGK contribution declaration is made for this period and no contributions accrue. That period is neither added to the number of contribution days for retirement purposes nor does it give rise to entitlements as regards the short-term insurance branches. In certain special situations, however, such as unpaid leave taken after childbirth, the employee may apply for voluntary insurance.
Frequently Asked Questions
May an employer place an employee on unpaid leave without their consent?
As a rule, no. The arrangement rests on mutual consent. As regards an employee sent on leave without their approval being obtained, it may be concluded that a substantial change has been made; and that may, depending on the specific circumstances, constitute a ground for termination for just cause.
Is the employer obliged to accept a request for unpaid leave?
As a rule it is not obliged to do so. The leave depends on agreement between the parties. However, in cases expressly recognised by statute, such as unpaid leave of up to six months after childbirth, the employer has no discretion.
Are SGK contributions paid during unpaid leave?
Since there is no actual work, no SGK contribution is paid during this period and the time is not added to the retirement contribution days. The employee may, if they wish, take out voluntary insurance.
Does unpaid leave affect length of service?
Since the contract does not come to an end, the length-of-service relationship continues; however, time spent on leave is not counted as actual working time and may not be reflected in the calculation of certain entitlements.
Does unpaid leave bring the employment contract to an end?
No. The contract is merely suspended. On expiry of the period the employee must return to work and the employer must take them back into employment.
Is there an upper limit on unpaid leave?
No general time limit is laid down; as a rule the period is determined by agreement between the parties. Nevertheless, in certain special situations, such as the unpaid leave granted after childbirth, the statute has set an upper limit (for example, up to six months).
Is unpaid leave deducted from annual leave?
No. The two institutions are distinct from one another and the period of unpaid leave is not deducted from the entitlement to annual leave. However, since that period is not counted as actual work, it may have indirect effects on the calculation of annual leave.
May an employee work elsewhere during unpaid leave?
Since the contract continues, so does the employee’s duty of loyalty. Working elsewhere may therefore breach the employment contract or a non-competition covenant; the assessment must be made according to the features of the particular case.
Related Articles
- Specimen Petition for Unpaid Leave
- The Right to Paid Annual Leave and Its Duration
Independent Legal Assessment
Almost all disputes concerning unpaid leave arise not from the existence of the leave but from the manner in which consent was expressed. Arrangements begun by oral agreement, with no duration fixed, or announced by a unilateral letter, are in most cases construed against the employer in actions brought years later; the state of suspension is characterised as a termination and gives rise to severance and notice pay. Unpaid leave should therefore be approached less as a human resources practice than as a discipline of documentation.
When designing a particular arrangement or assessing an existing dispute, the following headings take priority:
- Drawing up a text signed by both parties setting out the commencement and end dates of the leave
- Stating expressly in the document whether the request came from the employee or from the employer
- Assessing the statutory suspensions for maternity and military service separately from consent-based unpaid leave
- Calling the employee back to work after expiry of the period in written and provable form
- Determining at the outset how fringe benefits and insurance declarations will operate during the leave period
- Recording requests for extension in a separate agreement
Independent Legal provides advisory and litigation services in employment law matters, from the suspension of the employment contract through to the pursuit before the courts of disputes over entitlements arising from termination.