Termination of Employment 

According to the relevant provisions of the Labor Law, employers and employees are required to give specified notification periods prior to the termination of employment, as shown in the following table.

There are two types of termination for a job contract:

1) Termination with notification
2) Termination without notification based on justifiable reasons

Termination with notification

Both the employee and the employer may terminate a job contract concluded for an indefinite period based on the notification periods indicated in the above table. The employer may terminate a job contract by paying the salary of the employee corresponding to the notification period.  However, the employee covered by the labor security preserves the right to subject the validity of the termination of employment to judicial review.

Termination without notification based on justifiable reasons

Both the employer and employee have the right to terminate a job contract without notification under the following conditions:

• Reasons of health
• Cases arising from misconduct and similar reasons
• “Force majeure” events that prevent the employee from working for a period exceeding one week.

Termination indemnity (severance pay)

A lump-sum termination indemnity is to be paid to employees whose employment is terminated due to retirement or for reasons other than resignation or misconduct. Such indemnity pay is calculated on the basis of thirty days' pay per year of employment at the gross rate of pay applicable at the date of retirement or leaving. However, the thirty days’ payment per year of employment may not exceed a semi-annually determined limit which is TRY 2,260.05 for the first half of 2009. Indemnity may be agreed to be paid at an amount higher than the limit indicated above in case there is a provision in the contract of employment.

Termination indemnity paid within the limit specified is exempt from income withholding tax. However, the amounts of indemnity paid in excess of the limit shall be subject to income tax. The reasons on the basis of which employees are entitled to receive termination indemnity are as follows:

a) Leaving workplace due to the compulsory military service (for males)
b) Retirement (in order to receive old age, retirement pension or disability allowance from the relevant insurance institutions)
c) Voluntary termination by female employees within one year following the date of marriage
d) Death of the employee