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What is notice compensation, and when does it arise?

Notice compensation is a payment that comes into play when the legal notice period is not observed while ending an open-ended employment contract. Under certain conditions, this right can create a claim not only for the employee but also for the employer.

The basic rule is that one party must give the other a reasonable notice period before terminating the contract. If a termination is made without allowing that period, notice compensation may be due in an amount equal to the wage corresponding to the unused notice period.

However, notice compensation does not arise in every case of leaving a job. The assessment may differ, especially in cases of immediate termination for just cause, departures during the probation period, or the automatic expiry of fixed-term employment contracts.

Who can receive notice compensation?

From the perspective of employee rights, the most important factors are the nature of the contract and the reason for termination. In general, notice-period rules apply to employees working under open-ended employment contracts.

  • If the employer dismisses the employee without observing the required notice period, the employee may claim notice compensation.
  • If the employee leaves the job without complying with the notice period, the employer may also claim notice compensation.
  • If there is immediate termination for just cause, the notice period and related compensation rule generally does not apply.
  • For fixed-term contracts, the assessment of notice compensation may vary depending on the structure of the contract.

How are general notice periods determined?

In general practice under Turkish labor law, notice periods increase in stages according to the employee’s length of service. The minimum periods are commonly accepted as follows:

  • 2 weeks for less than six months of service
  • 4 weeks for between six months and one and a half years
  • 6 weeks for between one and a half years and three years
  • 8 weeks for more than three years of service

It is also possible for the employment contract or collective bargaining agreement to set longer periods. For that reason, the contract terms must be reviewed separately in each case.

How is notice compensation calculated?

When carrying out a compensation calculation, the main factor is the wage the employee would have earned during the notice period. In practice, not only base pay but also some regular and recurring fringe benefits may be included.

The general approach is to determine the employee’s daily or weekly gross earnings and multiply that by the unused notice period. Whether payments such as meals, transportation, or regular bonuses are included in the calculation depends on the structure of the wage.

To avoid mistakes in the calculation, it is important to assess the payroll, the contract, and the termination notice together. In the event of a dispute, official application channels and expert advice may be crucial to prevent the loss of rights.

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