Expat executives and foreign workers in Türkiye: Severance pay, ceilings, and the mediation deadline.

Equal Rights under Turkish Labour Law (Law No. 4857)

Under art. 27 of the Turkish Act on Private International Law (Law No. 5718), an employment contract is governed by the law of the employee's habitual place of work. Where the parties have chosen a different law, that choice cannot deprive the employee of the minimum protection given by the law of the habitual workplace. For work performed in Türkiye that generally means the protective provisions of Labour Law No. 4857 apply whatever the contract says, and nationality does not change that. The principal entitlements are:

• Statutory Severance Pay (Kıdem Tazminatı) after 1 full year of service, where the contract ends on one of the grounds listed in art. 14 of Law No. 1475 — it is not payable on every termination, and in particular not where the employer terminates for cause under art. 25/II of Law No. 4857.
• Statutory Notice Pay (İhbar Tazminatı) for dismissal without requisite advance notice.
• Payout of accumulated unused annual paid leave (yıllık ücretli izin).
• Protection against unfair and bad-faith dismissal (kötüniyet tazminatı).

One qualification matters specifically for foreign staff: work permits are governed by the International Labour Force Act (Law No. 6735). Where an employee worked without the required permit, the validity of the contract — and with it entitlement to some end-of-contract compensation — can be contested, although a claim for wages covering work actually performed stands on a different footing (TBK art. 394/3). If you worked without a permit, that point has to be assessed on your own facts before any claim is valued.

How Severance Pay is Calculated: The Statutory Ceiling (Kıdem Tavanı)

Statutory severance equals 30 days of gross salary for each full year worked (with pro-rated fractions for remaining months). However, Article 14 of Labour Law No. 1475 imposes an official Statutory Severance Ceiling (Kıdem Tazminatı Tavanı) adjusted semi-annually by the Ministry of Treasury and Finance.

Where a foreign executive's gross wage exceeds the statutory ceiling, statutory severance is calculated at the ceiling. The ceiling in art. 14 of Law No. 1475 binds employment contracts and collective agreements alike — the article states in terms that severance fixed by employment contract may not exceed it — and the rule is treated as absolutely mandatory (emredici), so a clause purporting to lift it is void. Parties may of course agree an additional payment on termination, but that amount is a contractual entitlement rather than statutory severance, and is treated differently for tax, interest and limitation purposes.

Notice Pay (İhbar Tazminatı) Entitlements

Under Article 17 of Law No. 4857, if an employer terminates an indefinite employment contract with immediate effect without allowing you to work out your notice period, it must pay notice compensation equivalent to your full, uncapped gross wage for:

• 2 weeks' gross wage: for tenure under 6 months.
• 4 weeks' gross wage: for tenure between 6 months and 1.5 years.
• 6 weeks' gross wage: for tenure between 1.5 years and 3 years.
• 8 weeks' gross wage: for tenure exceeding 3 years.

The "Work Permit Cancellation" Fallacy

A frequent tactic used by unscrupulous corporate employers in Türkiye is threatening foreign staff that upon dismissal, their work permit will be canceled, forcing them to leave the country and forfeit their legal claims.

Losing a work permit does not extinguish your claims. Claims for severance, unpaid salary and contractual bonuses survive the cancellation of a permit and can be pursued before the Turkish Labour Courts. You can leave Türkiye and appoint a licensed Turkish attorney under Power of Attorney to conduct the mandatory mediation and any court proceedings on your behalf. Whether each head succeeds, and whether a judgment can be enforced, depends on your documents and on the employer's assets.

Mandatory Mediation and the One-Month Clock (Zorunlu Arabuluculuk)

Under the Labour Courts Act (Law No. 7036), initiating lawsuit proceedings directly in court is inadmissible without first completing Mandatory Mediation (Zorunlu Arabuluculuk).

Job Security Does Not Reach Every Senior Employee (İş K. art. 18/son)

Reinstatement under arts. 18-21 of Law No. 4857 requires a workplace of 30 or more employees and at least six months' seniority. It also has an exclusion that matters directly to expatriate managers. Under the final paragraph of art. 18, arts. 18, 19 and 21 do not apply at all to an işveren vekili: the manager who directs the undertaking as a whole and his deputies, and the manager who directs the workplace as a whole and holds authority to hire and dismiss.

Turkish courts look at actual authority rather than job title, so a country manager, managing director or general manager with hiring and firing power will frequently fall outside job security however the contract is worded. An executive in that position cannot bring a reinstatement claim, but keeps severance pay, notice pay and every other monetary claim — and where the right of termination has been abused, may claim a bad-faith indemnity of three times the notice period under art. 17/6.

Where reinstatement is available and the employer does not re-employ, art. 21 provides compensation of four to eight months' wages, together with up to four months' wages and other accrued rights for the period not worked.

Scope. This page is general information about Turkish law and procedure. It is not legal advice, it is not an assessment of your situation, and reading it does not create a lawyer-client relationship. Statutory figures, thresholds and rates are revised periodically — check the current position before relying on any of them. Any particular case turns on its own documents and facts.

Frequently Asked Questions