Turkish Labor Law: Bad faith compensation for unfair dismissal

Under Turkish Labor Law, employees terminated due to the misuse of termination rights may be entitled to bad faith compensation. While employees in workplaces with more than 30 people may seek reinstatement, those in smaller workplaces can claim bad faith compensation instead.

This compensation is calculated as three times the notice period. The notice period varies based on seniority: two weeks for those employed under six months, four weeks for six months to 1.5 years, six weeks for 1.5 to 3 years, and eight weeks for those employed over three years. Consequently, the bad faith compensation can amount to 6, 12, 18, or 24 weeks of gross salary.

Eligibility for this compensation includes cases where termination is based on discriminatory factors such as pregnancy, marriage, race, gender, or union membership. Regarding taxation, while notice pay is subject to income and stamp tax, bad faith compensation is only subject to a stamp tax of 0.759 percent.