Where the contract of an employee within the scope of job security is terminated invalidly, the fact that the reinstatement claim has been upheld does not by itself make good the loss suffered. For the period during which the proceedings continue and the employee is not actually employed, the legislature has provided for a separate monetary entitlement. Known in practice as wages for the idle period, this item is intended to make good the loss of income caused by an unlawful termination and to ensure that the job security provisions do not remain a dead letter.
By contrast, the precise moment at which the claim arises, the number of months over which it is to be calculated, which payment items enter the calculation and whether collection is made on the gross amount frequently give rise to doubt. For parties engaged in a reinstatement process, clarifying these points at the outset prevents losses that are difficult to remedy afterwards.
Below we examine the definition of the claim, its legal nature, the conditions that must be satisfied cumulatively for it to arise, the payments falling within its scope, the steps of the calculation and the limitation period to which it is subject, within the framework of the statutory provisions and settled judicial practice.
The Concept of Wages for the Idle Period
Where a reinstatement action brought on account of an employment contract terminated for an invalid reason is concluded in the employee’s favour, the wages corresponding to the period during which the employee was not employed, together with the other entitlements attaching to them, are met by the employer. In practice this payment item is called wages for the idle period. For the procedural dimension of the subject, reference may be made to our note entitled Reinstatement Action.
The basis of the claim is Article 21 of the Labour Act No. 4857:
Labour Act No. 4857, Art. 21(3)
“The employee shall be paid the wages and other entitlements accrued for a maximum of four months in respect of the period during which he was not employed until the judgment became final.”
The scheme established by the provision is directed at closing the income gap left on the employee by an unlawful termination and at preserving the deterrent effect of the job security system. The fact that the obligation to perform work was not actually discharged during that period does not alter the outcome; since the statute treats that span of time as though it had been worked, the employee’s wages and other entitlements of a monetary nature are deemed to have accrued.
The Legal Nature of the Claim
By its nature, the sum paid in respect of the idle period is not damages but a wage claim. The basis of the payment is not the making good of a loss suffered by the employee, but the meeting of wages and ancillary entitlements relating to a period deemed by law to have been worked.
In this respect the item is structurally distinct from the classic heads of damages in labour law. Although the employee did not actually perform the obligation to work during the period concerned, he is deemed by the statutory construction to have worked, and the employer’s obligation therefore arises not as a debt in damages but directly as a wage debt.
The practical significance of this characterisation is considerable: treating the claim as wages determines the provisions to be applied on a great many matters, from limitation to the deduction regime, and from the type of interest to the rules of proof. The provision as a whole forms part of the job security system and serves to prevent the employee being left without income on account of an unlawful termination.
The Four-Month Upper Limit
The legislature has provided for a ceiling period in respect of this item. Article 21 of the Labour Act provides that, where the employer does not reinstate the employee within the prescribed period, the wages and other entitlements accrued for a maximum of four months shall be paid.
The maximum period is therefore 4 months, and the length of the reinstatement proceedings does not raise that ceiling. Even if the action is concluded in six months, in a year or over a longer period, the sum payable remains limited to a four-month period.
The courts likewise give judgment, as a rule, on the basis of a period of up to four months; that period corresponds to the span of time during which the employee did not actually work but is deemed by law to have done so.
Points of Distinction from Compensation for Failure to Reinstate
Two monetary entitlements arise at the conclusion of reinstatement proceedings, and they are assessed independently of one another.
The sum paid in respect of the idle period is a wage claim relating to the period during which the employee was not employed, and it arises for a maximum of four months. Compensation for failure to reinstate, on the other hand, is separate compensation arising where the employer does not re-employ the employee; the court assesses this item within a range of four to eight months’ wages.
In short, the first item expresses the entitlement to wages attaching to a period deemed to have been worked, while the second expresses the sanction for the decision not to reinstate. Although they arise out of the same event, their legal natures and methods of calculation differ from one another.
Conditions Required for the Claim to Arise
Termination of the contract for an invalid reason is not sufficient for this claim to arise. The conditions laid down in Article 21 of the Labour Act must be satisfied together. Indeed, files are encountered in practice in which this item did not arise at all despite the reinstatement action having been won. The conditions required are examined separately below.
Acceptance of the Reinstatement Claim
The first condition is that the action brought by the employee be upheld and the termination declared invalid. With that judgment the unlawfulness of the employer’s act of termination is established, and the legal footing is laid for the wages and other entitlements relating to the period during which the employee was not employed to arise.
Application by the Employee Within Ten Working Days
The upholding of the action is not sufficient on its own. Within 10 working days following service of the final judgment, the employee must notify the employer of his request to return to work.
An employee who misses this period is deemed not to have exercised the right of reinstatement; accordingly, he cannot benefit from the wages and other entitlements in respect of the idle period either.
Failure of the Employer to Reinstate in Time
If the employer does not re-employ the employee despite the employee having applied in time, the obligation to pay the wages and other entitlements relating to the period during which he was not employed arises.
If the employer manifests an intention to reinstate within the period, the employee actually returns to work; in that case too the wage claim relating to the idle period arises, but compensation for failure to reinstate does not additionally come into play. For the details of the distinction, our note entitled Compensation for Failure to Reinstate (Job Security Compensation) may be consulted.
Payment Items Included in the Calculation
This claim does not consist of the bare wage alone. For the period during which the employee did not actually work but is deemed by law to have worked, the monetary and social benefits provided on a regular basis are taken into account alongside the basic wage.
In making the calculation, all continuing payments to which the employee is entitled under the employment contract and the working conditions are taken into consideration. The principal items falling within the scope are examined below.
Basic Wage
The core of the calculation is the employee’s last gross wage. The amount to be taken as the basis is the current wage as at the date of termination; in other words, the measure is the wage the employee would have received had he continued to work.
Transport and Meal Allowances
The transport and meal facilities provided to the employee are also included in the calculation. Where these benefits are paid in cash they are assessed directly on the amount, and where they are provided in kind, on their monetary equivalent.
Premiums and Bonuses
Premium and bonus payments made on a regular basis also fall within the scope. For these to enter the calculation, they must be of a continuing character and must arise from the employment contract or from workplace practice.
Sales premiums, performance premiums or bonus payments made at particular times of the year may be given as examples of items of this kind.
Social Benefits of a Continuing Character
The calculation takes into account not only the basic wage but also the continuing social benefits provided to the employee. Since the employee, although not actually working during this period, is deemed by law to have worked, the social entitlements he would enjoy under the ordinary working arrangements must also be reflected in the calculation.
Benefits arising from the individual contract, from a collective labour agreement or from settled workplace practice, which are granted periodically and whose monetary equivalent is measurable, are accepted as an element of this claim. The principal items included in the calculation in practice are as follows:
- Regular payments made by way of clothing allowance
- Child allowance
- Family allowance
- Benefits provided by way of education support
- Fuel allowance
- The monetary equivalent of a shuttle service or transport facility
- Other social benefits repeated periodically
The decisive criterion here is that the payment be of a continuing character and bear the quality of an entitlement granted to the employee on a regular basis. One-off and incidental benefits, together with irregular payments left to the employer’s discretion, are as a rule not included in the calculation.
For this reason, in each file the employee’s working conditions, the terms of the contract and the settled practice at the workplace are examined together; benefits of a regular and measurable character are included in the calculation.
Method of Calculation
The last gross wage as at the date of termination is taken as the basis of the calculation. Not only the basic salary but also the monetary entitlements provided to the employee on a regular and continuing basis enter the exercise.
The claim is thus determined on the basis of the total of the wages and ancillary entitlements the employee would have received had the employment relationship not been interrupted.
The steps followed in practice may be summarised as follows:
- The gross wage as at the moment of termination is established.
- The ancillary payments of a continuing character (transport, meals, premiums, social benefits and similar items) are identified.
- These two groups are combined to arrive at the total monthly gross earnings.
- The period awarded by the court is applied to the figure so obtained.
The figure obtained in this way gives the total wage claim relating to the period during which the employee was not employed.
Important Note: The Amount Taken as the Basis Is Gross
The calculation is made on the gross wage; tax and social security deductions are made at the time of payment. It is therefore normal for there to be a difference between the sum awarded and the net figure the employee will receive.
Limitation Period
Since the claim is by its legal nature regarded as a wage claim, it is subject to the general limitation regime applicable to wage claims.
The Turkish Code of Obligations No. 6098 has fixed the statute of limitations for wage claims at 5 years. Accordingly, claims relating to the idle period must as a rule also be brought within five years.
When the period begins to run is of further importance in practice. Limitation begins to run once the reinstatement judgment has become final and the employee has not been reinstated by the employer despite an application made in time. In other words, the starting point is the date on which the claim becomes enforceable.
For this reason employees entitled to the claim must bring their claims before the five-year period expires, so as not to suffer a loss. For the position on this subject in respect of other employment claims, our note entitled Limitation Periods for Employment Claims may be consulted.
Independent Legal Assessment
Although the claim for the idle period appears to be a natural extension of reinstatement proceedings, in practice it calls for a separate discipline of follow-up. The ten-working-day application period following the judgment becoming final is the most critical threshold determining the fate of the claim; missing that threshold may extinguish altogether the monetary outcome of an action that has been won. Similarly, the content of the application and the method of its service must be arranged so as not to give rise to problems of proof at a later stage.
On the employer’s side, the intention to reinstate is required to be genuine and capable of actual implementation. Practices that invite the employee in appearance while making the working conditions more onerous, or that direct the employee to a position materially different from his former duties, may produce the result of a failure to reinstate.
In drawing up a road map in a concrete file, the following headings should be given priority:
- Establishing by documentary evidence the date of service of the final judgment and the ten-working-day period
- Arranging the content of the application to return to work and the manner of its service by a method with strong evidential value
- Separating out, from the payroll, the gross wage as at the date of termination and the ancillary payments of a continuing character
- Claiming the four-month ceiling in due form, together with the claim for compensation for failure to reinstate
- Calculating the starting point of the five-year limitation period by reference to the date of the failure to reinstate
Independent Legal provides advisory and litigation services throughout the whole of the process in job security disputes, from the assessment of the validity of a termination to the collection of monetary entitlements following reinstatement.