Notice and Severance Pay in Fixed-Term Employment Contracts

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Fixed Term Pay Art

One of the most frequently asked question is related to notice of termination and payment, and severance pay of employees working under fixed-term employment contract. In the following paragraphs, we will try to clear this subject by taking the provisions of Turkish Labor Law 4857 as a base.

Notice Payment:

According to Labor Law Article 17, "Before terminating a continual employment contract made for an indefinite period, a notice to the other party must be served by the terminating party.

As a fixed-term employment contract is concluded only for a defined period of time (with a specified end date) there will not be a notice of termination/notice pay obligation. No provision against that rule can be put on a fixed-term employment contract. However, in case the fixed-term contract is deemed as open-ended for legal reasons, the notice pay will be obligatory.

According to Turkish Code of Obligations; "Either of the parties may terminate any service contract with a term longer than ten years, after expiry of ten years by observing a notice of termination of six months. The termination shall take effect only at the beginning of the month following this term." 

 

Severance Pay:

An employee who has worked at least one year is entitled to severance pay whether he/she is working under a fixed-term or an open-ended contract. Labor Law doesn't make any distinction between these two types of contracts.

According to Supreme Court rulings, if the employer declares that employment contract will not be renewed, this will be deemed as termination by the employer and employee will be entitled to severance pay.

Also principles of equal treatment should be observed as stipulated in Labor Law; "Unless there are essential reasons for differential treatment, the employer must not make any discrimination between a full-time and a part-time employee or an employee working under a fixed-term employment contract (contract made for a definite period) and one working under an open-ended employment contract (contract made for an indefinite period)."

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