FAILURE TO PREPAY ANNUAL LEAVE PAY CONSTITUTES JUST CAUSE FOR TERMINATION
We would like to inform you about the decision of Turkish Supreme Court’s 9th Civil Chamber issued for the resolution of conflicting judgments by different Regional Courts of Appeal, concerning employees’ termination of their employment agreements on the grounds of the employer’s failure to duly pay their annual paid leave wages as required under the Turkish Labor legislation.
By way of brief overview of the applicable legislative framework, Article 57/1 of Labor Code numbered 4857 (the “Code”) envisages that the employer must pay the wages for the annual leave period in a lump sum or as an advance payment before the employee begins his/her leave. This obligation is further reinforced by Article 21 of the Regulation on Annual Paid Leave (the “Regulation”). Additionally, Article 103 of the Code imposes an administrative fine per employee for non-compliance with these rules. As of 2025, the administrative fine amounts to TRY 3,837 (approximately EUR 80) per employee.
The first paragraph of Article 8 of the Regulation, titled “Requesting and Granting Leave”, provides as follows:
“In requesting annual leave, the employee shall specify their name and surname, employee number if any, the dates on which they wish to take leave, and whether they request unpaid travel leave.”
The second paragraph of Article 21 of the Regulation, titled “Payment of Wages”, provides that:
“The employer or their representative shall be obliged to pay, in lump sum or as an advance payment, prior to the commencement of leave, the wage corresponding to the annual paid leave period and any other wages and wage-based entitlements due during such period to the employee making use of annual leave.”
The subject matter of the clashes between different decisions of regional courts of appeal concerns whether or not the employer’s failure to pay the employee’s annual leave wages in advance or as an advance payment before the leave period begins, constitutes just cause for termination by the employee.
One of the chambers of regional court of appeal, namely, İzmir Regional Court of Appeal, 15thCivil Chambers dated 22 April 2021, numbered 2021/310, with decision numbered 2021/736, held that the employee’s termination due to the employer’s failure to pay the leave wage in advance before the start of the leave period constituted just cause, and granted the employee entitlement to severance pay, rejecting the employer’s appeal. On the other hand, another chamber of the regional court of appeal namely, İzmir Regional Court of Appeal, 9th Civil Chambers dated 22 March 2024 and numbered 2022/1708, with its decision numbered 2024/758, rejected the employee’s appeal, ruling that such failure by the employer did not justify just cause for termination. Due to these conflicting judgments, the file was referred to the Turkish Supreme Court to resolve the inconsistency between different decisions of the regional court of appeals on the same subject.
In its decision numbered 2025/24 E. and 2025/2487 K., the 9th Civil Chamber of the Supreme Court ruled that the employer is required to prepay or provide as an advance the leave payment before the employee begins their annual paid leave. The Court further stated that if the employer fails to fulfil this obligation, the employee shall be entitled to terminate the employment contract with just cause pursuant to Article 24/2, subparagraphs (e) (non-payment of wages in accordance with the law) and (f) (failure to comply with working conditions) of the Code, and shall thereby be eligible for severance pay.
Taking into consideration the relevant provisions of the Code and the Regulation, the Supreme Court concluded that the employer’s failure to pay the annual leave wage in advance before the commencement of the leave period constitutes a just cause for the employee to terminate the employment contract immediately and that the legal conflict between the contradicting decisions of chambers of regional court of appeal should be resolved in line with the opinion expressed in the decision which found that such conduct of the employer does constitute just cause for termination by the employee.
This decision of the 9th Civil Chamber of Supreme Court has also been notified to the General Secretariat of the Council of Judges and Prosecutors for communication to all Civil Chambers of the Regional Courts of Appeal.
Accordingly, it is highly recommended to review your Company’s general practice and related documents for annual paid leave procedure in the workplace to ensure that the current practice is in line with the aforesaid legal requirements.
We remain at your disposal for any questions and assistance you may need.
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