Can Every Employee Who Leaves Employment Receive Severance Pay?
No.
Severance pay is not a right that automatically arises upon the termination of an employment contract in every case. Both the employee’s length of service and the reason for termination are significant.
Therefore, the view that “I have worked for more than one year, so I will definitely receive severance pay” is not correct in every case.
A termination by the employer, termination by the employee for just cause, retirement, or other grounds for termination regulated by law may lead to different outcomes.
What Is Notice Pay?
When an employment contract for an indefinite term is terminated, the Labour Law provides for notice periods determined according to the employee’s length of service.
Article 17. of the Labour Law sets these periods progressively at two, four, six, and eight weeks according to length of service. Where termination takes place without complying with the notice requirements, notice pay may be payable if the relevant conditions are met.
However, cases such as immediate termination for just cause require a different assessment.
What Happens to Unused Annual Leave?
When the employment contract ends, the employee may also become entitled to payment in lieu of annual leave that they have accrued but not used.
Although annual leave should, in principle, be taken while the employment relationship continues, termination of the employment contract may give rise to a right to claim payment in lieu of unused leave.
Overtime and Unpaid Employment Receivables
If the employee has unpaid:
- Wages,
- Overtime pay,
- Weekly rest-day pay,
- National holiday and public holiday pay,
- Bonuses and similar employment-related receivables
these may also be claimed after termination of the employment contract.
However, the working arrangements, payslips, bank records, workplace records, and other evidence are important in determining whether such receivables exist and their amount.
When Does an Action for Reinstatement Arise?
Under the Labour Law provisions on job security, an employer must generally rely on a valid reason for termination in the case of certain employees who work at workplaces employing thirty or more employees, have at least six months’ service, and are employed under contracts for an indefinite term.
Time limits are particularly important in reinstatement disputes. In employment disputes, applying for mediation is a condition of bringing an action in many cases involving reinstatement and employee or employer receivables and compensation.
Therefore, waiting for a long time after the termination notice may result in loss of rights.
Not Every Termination Is the Same
The employment contract may be:
- Terminated by the employer,
- Terminated by the employee by resignation,
- Terminated by the employee for just cause,
- Terminated immediately by the employer for just cause
each of which may lead to different legal consequences.
Therefore, in determining which rights the employee is entitled to, it is necessary to consider not only the termination code but also the actual reason for and manner in which the employment relationship ended.
Conclusion
Rights that may arise after termination of the employment contract are not limited to a single type of compensation. In addition to severance and notice pay, various claims, including wages, annual leave, overtime, and reinstatement, may arise.
However, which rights arise must be determined by evaluating the length of service, the reason for termination, the nature of the contract, and the available evidence.
Related practice area: For more detailed information on this subject, you can review our Employment Law page.
This article is intended to provide general legal information. In employment law, particularly in view of applicable filing and limitation periods, the specific circumstances of each case must be assessed separately.