Notice Periods and Notice Compensation

Subject to cases of immediate termination for just cause, employment contracts of indefinite duration are, as a rule, terminated by observing the statutory notice periods or notice periods extended by contract. Termination with notice (ordinary termination) is governed by Article 17 of Labour Law No. 4857 (İş Kanunu). The party that does not comply with the notice requirement is obliged to pay the other party notice compensation (ihbar tazminatı); however, the employer may terminate the contract with immediate effect by paying the wage for the notice period in advance. The notice period and notice compensation are important for both employees and employers; they are legal institutions distinct from severance pay (kıdem tazminatı) and job security.

Contents

• What is termination with notice (ordinary termination)?
• How long are the statutory notice periods?
• Can notice periods be changed by contract?
• What is notice compensation and when does it arise?
• How is notice compensation calculated?
• What does termination with payment in lieu of notice mean?
• What is the right to job-search leave during the notice period?
• What is bad-faith compensation?
• How does notice compensation differ from severance pay?
• When do the claims become time-barred and how are they asserted?
• Conclusion

What is termination with notice (ordinary termination)?

Termination with notice means that a unilateral notice of termination aimed at ending an employment contract of indefinite duration, which must reach the other party, takes effect at the end of the statutory or contractual notice period. In an immediate termination for just cause under Articles 24 and 25 of the Labour Law, by contrast, the expiry of the notice period need not be awaited. If the termination is based on the cases of conduct contrary to morality and good faith under paragraph (II) of Article 24 or paragraph (II) of Article 25, the forfeiture periods in Article 26 of six working days and, as a rule, one year must also be observed.

Pursuant to Article 109 of the Labour Law, notices that result in the termination of the employment contract must in all cases be made in writing, and their receipt by the other party must be documented. Although the amendment that entered into force on 24 July 2025 permits certain other notices to be made via registered electronic mail (KEP) if the employee has accepted this in writing, notices of termination are excluded from this option; in practice, delivery against signature or service through a notary is preferred. Within the scope of job security, where the same employer has a total of at least 30 employees at its workplaces in the same line of business (in the practice of the Court of Cassation, employees working at workplaces of the same employer in the same line of business abroad are, as a rule, also taken into account in determining this number) and the employee has, as a rule, at least six months of service, the employer must base the termination on a valid reason and state the reason clearly and precisely in the written notice. In terminations relating to the employee's conduct or performance, the employee's defence must be obtained. The right to immediate termination in accordance with paragraph (II) of Article 25 of the Labour Law remains reserved. Observing the notice period does not replace these additional requirements.

During the notice period, the employment relationship continues with all rights and obligations: the employee performs the obligation to work and the employer the obligation to pay wages, wage increases and social benefits continue to be provided in the same way, and this period during which the employee works at the workplace is taken into account in calculating the period of service. It should be noted, however, that where the employee does not continue working during the notice period and the employer pays the wage for the notice period in advance, this period will not be taken into account in calculating severance pay.

How long are the statutory notice periods?

The notice periods are determined by the employee's length of service with the same employer and are regulated in Article 17 of the Labour Law:

The period begins when the notice of termination reaches the other party and is calculated in weeks. It applies to termination by the employee as much as to termination by the employer; accordingly, an employee who wishes to terminate the employment contract is likewise obliged to observe the notice period corresponding to his or her length of service.

Can notice periods be changed by contract?

The statutory notice periods are minimum periods. They may be increased by the employment contract between the parties or by a collective labour agreement; however, these periods cannot be shortened to the detriment of the employee. Nevertheless, increased periods do not affect the parties in the same way: in the practice of the Court of Cassation, notice compensation based on the increased period is applied essentially to termination by the employer, whereas the employee's liability is, as a rule, limited to the statutory period. Moreover, the increase is not unlimited. Court decisions have emphasised that disproportionately long notice periods are subject to judicial review under Article 2 of the Turkish Civil Code. The periods provided for in the contract should therefore be clear and balanced and should not be so long as to make it unnecessarily difficult for the employee to take up other employment.

What is notice compensation and when does it arise?

The party that terminates an employment relationship of indefinite duration without just cause and without observing the statutory notice period pays the other party notice compensation in the amount of the wage corresponding to that period. The entitled party is therefore not only the employee; if the employee leaves work without just cause and without observing the notice period, the employer may also claim notice compensation.

No right to notice compensation arises in the following cases:

• immediate termination based on just cause pursuant to Article 24 or Article 25 of the Labour Law,
• the end of fixed-term employment contracts upon expiry of the term,
• the termination of the employment relationship by agreement (mutual termination agreement, ikale), and
• the death of the employee.

If the employee personally terminates the contract for just cause under Article 24 of the Labour Law or on one of the grounds listed in Article 14 of Labour Law No. 1475, which remains in force (for example compulsory military service, fulfilment of the conditions required for retirement, or a female employee leaving within one year of the date of her marriage), the employee may become entitled to severance pay; however, as the terminating party, the employee cannot claim notice compensation. In these cases, the employer likewise cannot claim notice compensation from the employee.

How is notice compensation calculated?

As with severance pay, the basis of the calculation is the gross wage including benefits (giydirilmiş brüt ücret). Continuing payments in cash and benefits with a monetary value to which the employee is entitled under the contract or the law, such as meal and transport allowances and regular premiums and bonuses, are added to the basic gross wage. Notice compensation is calculated on the basis of the gross wage including benefits corresponding to the number of weeks of the applicable notice period.

Calculation example

The employment contract of indefinite duration of an employee with four years of service (notice period: 8 weeks) and a gross monthly wage including benefits of TL 45,000 has been terminated without just cause. The notice compensation is TL 45,000 / 30 × 7 × 8 = TL 84,000 gross. Unlike severance pay, notice compensation paid to the employee is, as a rule, subject to income tax and stamp duty; it is not, however, included in the earnings subject to social security premiums.

For notice compensation, there is no statutory ceiling and no one-year minimum service requirement. However, if the termination takes place within a valid probationary period, the parties may terminate the contract without observing a notice period and without paying compensation. Once the probationary period has ended, notice compensation may arise even in the first year of the employment relationship, provided that the other conditions are met.

What does termination with payment in lieu of notice mean?

Pursuant to Article 17 of the Labour Law, the employer may terminate the employment contract with immediate effect by paying the wage for the notice period in advance. The payment must be made on the date of termination and calculated on the basis of the gross wage including benefits. In this case, the employment relationship ends immediately; the notice period not worked is not added to the period of service. The notice period constitutes a whole and cannot be divided; it is therefore not possible for part of the period to be worked and the remaining part to be settled unilaterally by the employer by way of advance payment. If the employment relationship is ended before the notice period has been completed, notice compensation arises, as a rule, on the basis of the entire notice period and not only for the remaining period. Termination with payment in lieu of notice does not override the job security provisions; an employee covered by job security may file a reinstatement claim. Nor does the advance payment extinguish any obligation to pay severance pay.

What is the right to job-search leave during the notice period?

Where the notice period is worked, the employer is obliged under Article 27 of the Labour Law to grant the employee paid leave to look for new employment during working hours of not less than two hours per day. The employee may combine the leave hours and take them in one block; however, the employee must take the leave on the days immediately preceding the day of departure and must inform the employer accordingly. If the contract is terminated with immediate effect by paying the wage for the notice period in advance, no job-search leave arises.

If the employer does not grant the job-search leave or grants it only in part, the employer pays the employee the wage for the period not granted. If the employer makes the employee work during the leave hours, it pays, in addition to the wage the employee would have received had the leave been taken, the wage for the time worked with a 100 per cent supplement. This right exists irrespective of which party gave notice of termination.

Since the law does not require a request by the employee for the job-search leave to arise, the employer is obliged to grant this leave even if the employee does not request it. However, taking the leave hours in one block depends on the employee's request to that effect and on the employee informing the employer in advance.

What is bad-faith compensation?

Employees who are outside the scope of the job security provisions in Articles 18 to 21 of the Labour Law and who work under an employment contract of indefinite duration are protected against abuse of the right of termination by bad-faith compensation (kötü niyet tazminatı). If the employer terminates the contract, for example, because the employee has asserted a right arising from legislation or the contract or has applied to the competent authorities, the employer may be obliged to pay bad-faith compensation in the amount of three times the wage for the notice period.

Bad-faith compensation may be claimed in addition to notice compensation if its conditions are met; the burden of proving bad faith lies, as a rule, with the employee. Employees covered by job security cannot claim bad-faith compensation; for them, the provisions on the invalidity of the termination and reinstatement apply.

How does notice compensation differ from severance pay?

Notice compensation and severance pay are independent claims with different conditions. It is therefore possible to claim both types of compensation on account of the same termination.

Notice compensation: It depends on non-compliance with the notice period, requires no minimum period of service, is calculated in weeks, is not subject to a ceiling and is subject to income tax.

Severance pay: It is compensation that arises according to the period the employee has worked for the same employer and the ground on which the contract ended. As a rule, at least one year of service and one of the cases listed in Article 14 of Labour Law No. 1475, which remains in force, are required. It is calculated on the basis of 30 days' gross wage including benefits for each full year, with additional periods taken into account pro rata, and it may not exceed the severance pay ceiling. Severance pay within the statutory limits is exempt from income tax; it is subject to stamp duty.

If the employment contract of indefinite duration of an employee with long service is terminated by the employer without just cause and without observing the notice period, the conditions for both types of compensation may be met at the same time. Nevertheless, the ground and manner of termination must be assessed separately with regard to severance pay and notice compensation.

When do the claims become time-barred and how are they asserted?

Notice compensation and bad-faith compensation are subject to a five-year limitation period running from the date on which the claim becomes due. An application to a mediator before filing an action concerning these claims is a procedural prerequisite. Statutory interest accrues on notice compensation from the date of default; if the employer has not previously been placed in default by a proper formal notice, the date on which the final mediation report recording that no agreement was reached is drawn up is deemed to be the date of default. Since notice compensation does not have the nature of wages, statutory interest applies rather than the highest deposit interest rate specific to severance pay.

Conclusion

Compliance with the statutory notice periods and correct calculation of notice compensation are important in order to avoid disputes that may arise from the termination of an employment contract. Since no particular minimum period of service is required for notice compensation and notice compensation is not subject to any ceiling, the notice period and the related compensation obligations must be assessed separately in the termination process.

Before an employment contract is terminated, the applicable notice period, the cost that would arise if the wage for the notice period were paid in advance and any consequences relating to job security must be assessed together. Compliance with notice periods is also essential in terminations by the employee. If the employment contract is terminated without just cause and without observing the notice period, the employee may become obliged to pay compensation in the amount of the wage for the notice period.

GEMS Schindhelm supports employers and employees in the lawful structuring and implementation of terminations, in the calculation of notice compensation and other termination-related claims, and with representation in mediation and court proceedings. This article is intended for general information purposes only and does not constitute a legal opinion or legal advice; each dispute must be assessed separately in light of the specific circumstances of the case and the legislation in force.