Retirement After Completion of 3600 Work Days - Legal Disputes Over Severance Pay

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Executive summary

As per article 14 -still in force- of former Labor Law 1475, an employee is entitled to severance pay in case of resignation after completing 3,600 work days and 15 years insurance period, provided that he/she presents a document from the Social Security Institution showing the entitlement of  retirement except age limit. 

For years it has been a highly controversial topic whether the employee, who received his severance pay entitled in line with above mentioned provision, may work in another workplace during his waiting period for age limit. In other words, whether an employer who paid the severance may claim the payment back in case the employee starts working another employee’s establishment, instead of waiting for the legal retirement age.

After many conflicting court decisions and rulings of Supreme Court, this issue became clearer and most of the experts are agreed that;

  • In case an employee who has received his severance pay as per the above said law may work in another workplace provided that he starts working after the employment contract he signed with previous workplace is terminated.
  • In case an employee  finds a new job and signs an employment contract, and then resign from the previous workplace for receiving severance pay employer doesn’t have to pay the severance, or may file a lawsuit to get back the severance pay if he have already paid it.

                                                                  

Outlines

According to arrangements regulating retirement conditions, persons who are first time insured before 9th October 1999 may choose to retire with 3600 premium paid days in 15 years of insurance period. If they haven’t reached the required retirement age determined by the law, they are to wait for the age limit.  The employee is not required to work for the same employer for the 15 year period.

RETIREMENT WITH 3600 PREMIUM DAYS AND 15 YEARS OF INSURANCE PERIOD

Persons who are first time insured before 8th October 1999 may choose the retirement with 3600 premium paid days in 15 years insurance period.

- By completing 3600 premium days and 15 years of insurance period until 23rd May 2002; women at the age of 50 and men at the age of 55 can be retired.

- After 24th May 2002 a gradual system is applied. 

Persons completed the 3600 premium days within 15 years insurance period between the dates:

24.05.2002-23.05.2005 men 56 women 52,

24.05.2005-23.05.2008 men 57, women 54

24.05.2008-23.05.2011 men 58, women 56,

24.05.2011-23.05.2014 men 59, women 58,

after 24.05.2014 men 60 women 58 may be retired.

ENTITLEMENT TO SEVERANCE PAY

Law No 1475 Article 14/5 – (Amended first clause: July 29, 1983 – Article 2869/3) In the case of annulment of the service contracts of the employees who are amenable to this Act:

Due to their voluntary severance upon completing the insurance period and the number of days to pay premium prescribed for putting an employee on an old age pension as per the conditions other than the prescribed ages in sub-clauses (a) and (b) of sub-paragraph (A) of the first clause of Article 60 of Law no. 506 (Annex: August 25, 1999 – Article 4447/45) or as per Provisional Article 81 of the same Law”

PRINCIPLE OF GOOD FAITH AND FAIR DEALING

In the light of recent Supreme Court rulings an employee may start to work after he received his severance pay due to his retirement right with 3600 days in 15 years of service, because the right to work is guaranteed by the Constitution.

However, in case he finds a new job and signs an employment contract before he left his old workplace he cannot claim any severance from the old workplace, because this is considered by the Supreme Court as an act against the good faith and fair dealing.

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