Notice Compensation Calculation

Notice Compensation Calculation
Notice Compensation Calculation

What is Notice Compensation? Before the termination of the employment contract, the other party of the contract must be notified of the termination. The purpose of this notice is to enable the other party to prepare for termination. Therefore, the obligation to notify creates an obligation for both the employee and the employer. This obligation is called the 'notice notice'.

Employers/employees who do not comply with the notice notice obligation will be liable for notice indemnity. As we have mentioned above, even if the employee is the party who terminates the employment contract, if the notice is not recognized, the employer will be liable to pay notice indemnity. The amount of notice indemnity is determined according to the seniority period.

Mihci Law Firm Wrote.

  1. Notice Pay Conditions

-Must Have Indefinite Term Contract: For fixed-term employment contracts, there is no obligation to give notice. For notice indemnity, the employment contract must be of an indefinite duration.

- The Terminating Party Should Not Have Been Based on a Just Reason: The party terminating the employment contract must not have been based on a just cause for itself. Justified reasons are listed in the law.

- The Notification Period stipulated in the Law should not have been complied with: According to the seniority period, the notice period that should be given has been determined in the law. We can list these periods as follows:

  1. a) Worker with less than 6 months = 2 weeks
  2. b) Worker who worked between 6 months and 1,5 years = 4 weeks
  3. c) Worker who worked between 1,5 years and 3 years = 6 weeks
  4. d) Worker with more than 3 years = 8 weeks

If the termination occurs without complying with the stipulated periods, notice compensation is awarded against the party that does not comply with the notification. The worker continues to work during the notice period. However, since the employment contract will expire, various rights such as job search permission arise.

In the continuation of our article, we will examine in detail with examples how to calculate the notice compensation.

  1. Notice Compensation Calculation 

Calculating notice pay made on the gross wage. The amount of the clothed gross wage at the time of termination must be taken into account. The fee for unrecognized notice periods is reflected as notice indemnity. Before proceeding to the calculation of the notice indemnity, we believe that it would be useful to explain what the clad gross wage is.

Dressed gross wage, refers to all periodic expenses incurred by the employer for the worker. These expenses, besides the worker's wages; It includes in-kind or cash expenditures such as food, travel, fuel, and food aid. We should state that these expenditures should be regular aids that have gained the quality of workplace practice. When calculating the clothed gross wage, one day's cost of the worker is subtracted, this cost is multiplied by 30 and converted into a 1-month cost. The 1 month cost is added to the gross wage to obtain the clothed gross wage. We think it will be better understood by giving an example.

Let a worker receive 360 ​​TL worth of Ramadan food every year, a cash bonus of 4 TL every 1200 months, and 1 TL worth of clothing only once. In addition, let's assume that a shuttle is provided for the employee's commute and 500 meal a day is provided. In this example, the benefits received by the worker other than the clothing allowance received once will be taken into account in the calculation of the dressed gross wage. Since the clothing allowance is not periodic, it is not taken into account in the dressed wage calculation.

– Monthly fee of Ramadan food: 360/12= 30 TL

– Monthly fee of 4-month cash bonus: 1200/4= 300 TL

– Assuming that daily service cost is 5 TL, monthly expense: 30×5= 150 TL

– Assuming that the daily meal cost is 20 TL, monthly expense: 20×30=600 TL

The clad gross wage will be obtained by adding the total to the gross wage of 1080 TL.

Gross wages, It is the actual wage that the worker is entitled to receive. However, a part of the wage is deducted due to taxes and additional expenses, and the wage received by the worker is less than the gross wage. The wage that the worker receives as salary at the end of the month is expressed as net wage. The minimum gross wage amount for 2019 has been determined as 2.558 TL per month. The net minimum wage amount was determined as 2.020 TL.

The gross dressed wage of the minimum wage employee whose monthly clothed wage is 600 TL will be determined by the calculation of 2.558 + 600 = 3.158 TL.

We said that if the notice to be given to the worker is not given, the unused periods will be reflected as notice compensation. Now we will try to make the situation more understandable with an example.

Let's assume that a worker is employed at the same workplace with minimum wage for 1 year and 4 months with an indefinite-term employment contract and is dismissed without just cause. In this case, the employer should have given the termination notice at least 4 weeks before terminating the employment contract. Since he did not give notice of termination, he must give the 4 weeks' gross wages to the other party as notice indemnity. In this case, the wage calculation is made assuming that 1 month corresponds to 4 weeks. Therefore, 1 month's wage is divided by 4 to calculate the 1-week dressed gross wage. In our example, it should be assumed that the worker is entitled to the monthly draped gross wage as a notice pay.

In some cases, the notice period that should be given to the worker may not be fully recognized. For example, if a notice period of 4 weeks is granted while legally it should be granted for 2 weeks, then the 2 weeks' gross wages will be reflected as notice compensation.

We must state that the employment contract can be terminated at that moment by paying the fee for the notice period in advance.

We can present the notice indemnity account in tabular form with another example. The table was created based on a normal minimum wage employee.

Date of start 16.12.2013
Dismissal Date 18.12.2019
Termination Notice Date 10.12.2019
Monthly Dressed Gross Wage 2.558 TL + Meal (200 TL)
Daily Dressed Gross Wage 91.9 TL
Notice Period to be Allowed For more than 3 years: 8 weeks (56 days)
Recognized Notice Period 6 Days (not counting the day of notification and termination)
Missing Notice Period 50 Days
Amount of Notice Pay 50×91.9 = 4595 TL
Stamp duty (‰7,59) 34,87 TL (It will be deducted from the amount of notice indemnity.)

Notice Compensation for Part-Time Employees

While calculating the notice pay for part-time employees, the monthly gross wage of the worker is calculated. Regardless of the working time, this wage is divided by 30 and the daily dressed wage is found. Then, the notice compensation is obtained by multiplying the notice period to be given to the worker.

It would be appropriate to explain part-time work with an example. For example, let's assume that the worker works 3 hours a day, 6 days a week, 18 hours a week and 72 hours a month. Let's assume that this worker's monthly wage is 1500 TL and he eats at the workplace on the days he works. In this case, the daily meal wage of the worker will be calculated and the dressed gross wage will be obtained by multiplying the monthly total working days. Therefore, the worker with a daily meal wage of 20 TL will have a weekly 60 TL and a monthly 240 TL clothed gross wage. Under the condition of a 4-week notice period, this worker will be entitled to 1740 TL notice compensation. 

  1. Conclusion 

We have explained the calculation of the notice indemnity with examples above. It should be noted that in some cases, the calculation of notice indemnity can become complicated. For example, situations such as workers' entry and exit from work require concrete evaluation. Since such cases will be resolved with different provisions in each case, it is not possible to mention these cases in our article.

In addition, it is possible to terminate the employment contract by paying the notice indemnity of the workers in advance. In such cases, it is very common for workers to lose their rights. Therefore, we believe that it is important to act by applying to legal counsel, no matter what.

Günceleme: 01/12/2022 10:34

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