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Interest on Employee Debts | Izmir Labor Law Attorney

Interest on Workers' Excesses

Lawyer in Karşıyaka – Labor claims, Labor Law No. 4857‘Employment claims are regulated in the relevant legislation and refer to certain rights and entitlements arising from the termination of an employee's employment contract. Some employee claims (such as severance pay, notice pay, annual leave pay, and compensation for unfair dismissal) are claims dependent on termination and can only be demanded upon the termination of the employment contract. Other claims (such as wages, overtime pay, temporary leave pay, and holiday pay) are not dependent on termination and can be demanded by the employee regardless of whether the employment contract has been terminated or not. In İzmir Karşıyaka, the method of applying interest to employee claims and determining the commencement date for interest accrual is sometimes confusing in practice. Let's examine these in order:;

1. Severance Pay:

The employee's severance pay is calculated based on their last gross salary (including all benefits). The total gross salary is obtained by adding regular social benefits and similar payments such as transportation allowance, meal allowance, bonuses, etc., to the employee's last gross salary, and this gross salary is used as the basis for calculating severance pay.

The starting date for interest on severance pay is always the same: whether in the initial lawsuit, a supplementary lawsuit, or an increase in the claim amount (through amendment), the interest starts from the date the employment contract ends in a way that entitles the plaintiff to severance pay. (For detailed information on severance pay, you can review our article titled "Karşıyaka Lawyer – Severance Pay").

The ruling of the 9th Civil Chamber of the Supreme Court of Appeals, numbered 2017/5554 E., 2018/7618 K., dated 04.04.2018;  ”"...According to Article 11 of Article 14 of Law No. 1475, which is currently in force, by virtue of Article 120 of the Labor Law No. 4857, if severance pay is not paid on time, the highest interest rate applied to deposits should be awarded..." Therefore, the interest rate to be applied to severance pay is the highest interest rate applied to deposits by banks.

2. Severance Pay

Severance pay is compensation that the party terminating an indefinite-term employment contract without just cause and without providing proper notice must pay to the other party. Unlike seniority and annual leave, severance pay is not tied to a one-year employment requirement. Even if the contract lasted less than six months, the employee has the right to receive severance pay.

İhbar tazminatına yasal faiz uygulanmaktadır. Yasal faiz, 01.06.2024 yılı itibariyle %24’tür. İhbar tazminatı ile ilgili detaylı bilgi almak için Karşıyaka Avukat – İhbar tazminatı adlı yazımızı inceleyebilirsiniz.)

The ruling of the 9th Civil Chamber of the Court of Cassation, numbered 2017/5535 E., 2017/11218 K., dated 22.06.2017.;

”"...The interest rate to be applied in terms of severance pay should be the legal interest rate, which varies according to current rates. If a different type of interest is stipulated in an individual or collective labor agreement, the agreed interest rate shall be applied, provided it is not lower than the legal interest rate...".

Unlike other receivables, legal interest is applied to this receivable item. Since the type of interest and the statute of limitations for labor receivables can vary depending on the specific case, it is important to have the process handled by an expert to avoid any loss of rights. In this context, Izmir Karşıyaka lawyer With this support, it will be possible to properly evaluate severance pay, interest, and statute of limitations processes.

3. Annual Leave Pay Entitlement

Annual leave pay is a type of labor entitlement earned by an employee for unused annual leave days. According to the Labor Law No. 4857, if an employment contract is terminated for any reason, the employee is obligated to receive payment for any unused annual leave days. This entitlement cannot be claimed during the employment contract; it becomes due and payable upon termination.

Regarding interest to be applied to annual leave pay, the generally accepted view is that the receivable becomes due as of the termination date, and interest accrues from that date without the need for a separate default. While the type of interest is generally the statutory interest, different assessments may be made depending on the specific circumstances of the case.

The statute of limitations for claims for annual leave pay is 5 years, in accordance with Law No. 7036 on Labor Courts, and this period begins to run from the date of termination of the employment contract. If the employee does not make a claim within this period, the claim will be time-barred.

Annual leave pay, within the scope of employee entitlements, is often subject to erroneous calculations. Therefore, to avoid any loss of rights, it is crucial to seek legal assistance throughout the process. In this context, having a lawyer follow the process, especially in the Karşıyaka region of İzmir, is important for the accurate calculation and collection of the amount owed.

4. National Holiday, Public Holiday and Overtime Pay

Compensation for work performed by a worker during religious and national holidays and official public holidays. Legal interest on National Holiday (UBGT) pay is generally calculated from the date the employer is deemed to be in default or from the date of the lawsuit or amendment/increase in claim. This is being implemented. To avoid any loss of rights, it is crucial that these calculations are done meticulously and that the process is followed up through an expert lawyer; therefore, you can contact our law firm operating in the Karşıyaka region of İzmir to ensure the collection of your rightful UBGT and other labor receivables with the correct interest applied. Izmir Karşıyaka lawyer You can receive professional legal support from our team.

5. Overtime Pay

One of the most frequently disputed issues in labor law is overtime pay claims., Article 34 of the Labor Law No. 4857 as required applied to deposits by banks highest interest rate Interest is calculated based on the date the employer is deemed to be in default through a proper notice, or the dates of the lawsuit and amendment/increase in claim. To avoid losing your rights due to incorrect interest type or insufficient period calculation, and to collect your receivables in full, Izmir Karşıyaka lawyer By contacting our team, you can confidently conduct your legal process on a professional basis.

Interest Commencement Dates in Partial Claims and Uncertain Claims in Light of Supreme Court Decisions

In its decision dated February 28, 2018, with case number 2015/9-3157 and decision number 2018/365, the General Assembly of the Supreme Court of Appeals ruled that, ”On the other hand, considering the purpose of the uncertain claim lawsuit and the nature of the lawsuit, in cases where there is no default before the date of the lawsuit, the default occurs on the date the lawsuit is filed for the entire amount of the claim determined in full and definitively as a result of the trial in an uncertain claim lawsuit, and therefore interest should be awarded from the date of the lawsuit.” and further ruled that, “In this case, since the lawsuit is an uncertain claim lawsuit, the material and formal legal consequences arising from the filing of this lawsuit (interruption of the statute of limitations and others) should also be valid for this lawsuit; therefore, it was correct for the court to apply interest from the date of the lawsuit to the entire amount of the claims, including the increased amounts requested in the petition for increased claim.”.

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Izmir Employment Lawyer

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Izmir Employment Lawyer

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