INTRODUCTION AND THE CONCEPT OF EYT

  1. As previously mentioned in our article titled "About Victims Of Delayed Pension Age ("EYT") Project", although retirement conceptually means the termination of work and professional life due to factors such as; age, seniority, premium days, disability and similar reasons, individuals whose insurance start date is before September 9, 1999 and who do not meet the age requirement even if they fulfill other conditions for retirement constitute the EYT group.
  2. Therefore, following with the publication of the Official Gazette dated March 03, 2023, numbered 32121, the law concerning EYT beneficiaries, has entered into force. Although the law stipulates that employees who were insured on or before September 08, 1999 may be entitled to a pension for retirement in cases where the number of premium days and working period has been fulfilled in accordance with the law, , the question of how the compensation calculations of employees who continue to work after retirement, which is another important issue for EYT beneficiaries, comes to the fore when today's economic conditions are taken into consideration.
  3. As a matter of fact, regarding the calculation of compensation;
    • If a retired employee continues to work after his/her retirement date, how will his/her work until his/her retirement date be evaluated?
    • What is the calculation of severance pay for a person who meets the conditions but retires without receiving severance pay?
    • For employees who continue to work without receiving severance pay before retirement, what happens in case of resignation after becoming eligible for retirement or if the employer terminates the employment relationship for justified reasons?
    • Is severance pay not paid during retirement subject to statute of limitations?

while there are more than one possibility, it is very important to clarify these questions in order to avoid any loss of rights.

4. In this context, within the scope of this article, we will address the above-mentioned questions and explore the points that are thought to remain open regarding the EYT and severance pay within the scope of yet. Additionally we will evaluate the answers to the questions that arise, especially for those who continue to work after retirement will be evaluated.

ASSESSMENTS REGARDING CONTINUED EMPLOYMENT AFTER RETIREMENT

  1. As commonly known, in accordance with the customary Supreme Court decisions, for the employees who has concluded their working life by being paid of severance payments due fulfilling retirement conditions, the previous employment relationship is considered to be completed due to retirement and severance payments. However if the parties express their will to continue the employment relationship, then it will be regarded as the commencement of a new and independent work.
  2. Therefore, with the decision to continue the employment relationship in this way, the calculation of the severance pay should no longer be based on the entire service period, but on the date when the parties reasserted their will.
  3. As a matter of fact, in the decision of the Court of Cassation dated 21.04.2022 and numbered 2022/4207 E. and 2022/5074 K..;

"The plaintiff retired on 26.08.2008 and was paid 16,355.01 TL severance pay due to retirement. As of this date, the plaintiff has no claim that his severance pay was underpaid. The plaintiff employee started to work again at the defendant workplace after retirement and worked until 24.10.2018, the date of termination. Since there is no claim of underpayment of severance pay after retirement, the pre-retirement period has been liquidated. The post-retirement period is a new working period that should be evaluated independently from the previous period. Accordingly, in terms of severance pay calculation, it is erroneous to make an evaluation over the entire period and to be satisfied with the deduction of the amount paid at retirement together with interest, while only the second period work should be taken as basis."

the above-mentioned question has been answered and;

  1. The absence of a claim for incomplete severance pay for the pre-retirement period constitutes a presumption that the severance pay for this period was paid in full and that this period has now been liquidated,
  2. Severance pays to be calculated within the scope of post-retirement works should be evaluated independently from the previous period, not over the whole period

is clearly stated. Therefore, it should be taken into consideration that previous periods will not be considered when calculating severance pay for those who continue to work after retirement.

EVALUATIONS ON UNDERPAYMENT OR NON-RECEIPT OF SEVERANCE PAY

  1. Another important issue regarding the post-retirement period is what to do if the severance pay was underpaid or not received at all before retirement. In such instances, within the context within the scope of the employment relationship terminated due to retirement, the severance pay should be recalculated and any payment made in case of underpayment should be deducted from the calculated compensation amount.If no payment has been made, the recalculated amount should be paid to the right holder as the compensation amount.
  2. Again, a similar situation arose within the scope of a file before the Court of Cassation, and in the decision of the Court of Cassation dated 19.12.2019, numbered 2016/5826 E. and 2019/22774 K as stated below;

"After the first period of work ended with retirement, the defendant employer paid severance pay based on the wage in the records, but the severance pay of the plaintiff at the end of the first period was underpaid because the campaign premium that should be added in determining the seniority-based wage was not included. The work to be done by the court is to calculate the severance pay over the last wage on that date for the first period ending with retirement and to decide to collect the balance, if any, with interest from the date of the first termination after deducting what has been paid, and also to make an independent calculation for the second period and to decide the severance pay to be determined without payment for this period, together with the interest to be accrued from the date of the second termination."

As it is stated in the above-mentioned decision the severance indemnity amount should be recalculated and the missing amounts should be deducted from the compensation amount paid. Therefore, in cases where the said amounts have been paid incompletely or not at all;

  1. The severance pay should be recalculated to cover the entire first working period
  2. As a result of the calculation made, the missing payments should be deducted from the payments made or the unpaid amount should be paid in full over the recalculated amount

given that these procedures are established by Supreme Court decisions, it is very important to pay attention to these issues to avoid any loss of rights.

EVALUATIONS ON THE CONTINUATION OF EMPLOYMENT WITHOUT RECEIVING SEVERANCE PAY BEFORE RETIREMENT AND RESIGNATION OR TERMINATION OF EMPLOYMENT FOR JUST CAUSE AFTER RETIREMENT

  1. Another crucial point is the question of what happens if an employee continues to work without receiving severance pay in the periods before retirement and resigns or terminates his/her employment contract for just cause after retirement. In this case, the salary amount and seniority period on the date of retirement should be taken as basis and severance pay should be calculated as of this date.
  2. Therefore, in this case, the severance pay calculation will be based on the date of retirement, not the date the employee resigns, and the vesting for the pre-retirement period will not end due to resignation. If the employee continues to work after retirement and the employment contract is terminated by the employer for just cause during this period, the unpaid severance pay, like in the case of resignation, will have to be paid even though the employment contract is terminated for just cause.

ASSESSMENTS ON THE STATUTE OF LIMITATIONS

  1. Another important question that needs to be answered is how the statute of limitations will run if the employee is entitled to retirement but is not paid severance pay despite this entitlement.
  2. As it is known, Labor Law No. 4857 ("Law"), which generally regulates the statute of limitations for labor receivables as 10 years, except for some special regulations, and the statute of limitations applicable to severance pay was reduced to 5 years with the amendment dated 12.10.2017.
  3. In this context, the statute of limitations to be applied to severance indemnity will commence as of the date of termination of the employment contract to which this indemnity is entitled and this receivable will become time-barred upon the expiration of the statute of limitations of 5 years. In this respect, for employees who are entitled to retirement and terminate their employment contract for this reason, but continue to work without severance pay, the statute of limitations will be completed with the expiration of 5 years from the date of retirement and the severance pay will be time-barred in this respect.

CONCLUSION

As a result, it is necessary to carefully determine from which period, how and under what conditions the severance pay calculations, which are very important for EYT beneficiaries, will be made, and while making these calculations, considering the statute of limitations, complying with the said period is one of the most important factors to avoid the forfeiture of a right already acquired and prevent potential loss of rights.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.