1. General Framework
The job security regime constitutes a fundamental protective mechanism aimed at preventing the arbitrary or unlawful termination of the employment contract by the employer and safeguarding the employee in cases of invalid dismissal. The reinstatement mechanism, regulated under Articles 18 through 21 of the Labour Act No. 4857, represents one of the principal instruments of this protection system.
Pursuant to Article 21 of the Act, where it is determined by the court or an arbitrator that no valid ground was relied upon by the employer, or that the asserted ground is not valid, the dismissal shall be declared invalid, and the employer shall be obliged to reinstate the employee within one month following the finalization of the decision. This provision demonstrates that a reinstatement claim is not merely a compensatory remedy; rather, its primary objective is to ensure, insofar as possible, the continuation of the employment relationship.
Nevertheless, the legislator has also taken into account the possibility that the employer may fail to reinstate the employee in practice and has prescribed a specific sanction for such circumstance. Accordingly, the employee must apply to the employer within ten working days following notification of the finalized decision in order to be reinstated. Should the employer fail to reinstate the employee within one month despite such application, the employer shall be liable to pay compensation for non-reinstatement in an amount corresponding to not less than four and not more than eight months’ wages. This compensation constitutes a sanction for the employer’s breach of the obligation to reinstate and serves as the deterrent component of the job security system.
Furthermore, the employee’s rights are not limited to compensation for non-reinstatement. Pursuant to the third paragraph of Article 21, the employee is also entitled to wages and other accrued rights for the period during which he or she was not employed, up to a maximum of four months, until the decision becomes final. This receivable, commonly referred to in practice as “wages for the idle period,” aims to compensate, to a certain extent, for the loss of income resulting from the invalid dismissal.
The job security process, however, does not constitute a unilateral protection regime. The employee is likewise required to apply to the employer for reinstatement within ten working days following the finalization of the decision. In the absence of such application, the dismissal shall be deemed valid, and the employer shall only be liable for the legal consequences attached to a valid termination. Accordingly, the reinstatement mechanism is a judicial process that necessitates the active participation of the employee.
2. The Issue of Determining the Relevant Date for the Wage
One of the most contentious issues in reinstatement litigation concerns the date on the basis of which the gross wage shall be determined for the calculation of compensation for non-reinstatement and wages for the idle period.
Following the amendment introduced by the Labour Courts Act No. 7036 dated 12 October 2017 to Article 21 of the Labour Act No. 4857, an explicit statutory provision was enacted in this regard. Prior to this amendment, the matter had largely been shaped by the jurisprudence of the Court of Cassation.
Particularly in the post-2018 period, the question of whether the wage as of the date of termination or the wage as of the date of filing the action (or the date of mandatory mediation) should serve as the basis of calculation has been at the center of serious allegations of loss of rights. The development of the Court of Cassation’s approach and the current state of the law are examined below.
3. Pre-2018 Jurisprudence of the Court of Cassation: Protection Based on the Principle of “As If the Employment Had Continued”
Prior to the amendment introduced by Act No. 7036, Labour Act No. 4857 contained no explicit provision specifying the relevant date for determining the wage. This legislative gap was filled through judicial interpretation by the Court of Cassation.
According to the settled case law before 2018, in cases of invalid dismissal, the employee’s status was to be assessed as though the termination had never occurred and as if the employee had continued working. This approach was particularly decisive with respect to wages for the idle period.
In its decision dated 28 December 2009 (E. 2009/34595, K. 2009/37899), the 9th Civil Chamber of the Court of Cassation held:
“For wages and other rights pertaining to the idle period of up to four months, the calculation shall be made according to the wages applicable in the period following the dismissal. During the idle period of up to four months following the invalid dismissal, wages and other rights shall be determined as if the employee had continued working. Where a wage increase or a new collective bargaining agreement enters into force within this period, separate calculations shall be made for each respective period.”[1]
In line with this decision, the calculation of wages for the idle period took into account not only the base wage but also collective bargaining agreements entering into force after the dismissal, wage increases, bonuses, and similar pecuniary benefits. Thus, the employee could benefit from economic developments occurring within the four-month period following dismissal, and prolonged litigation did not result in adverse economic consequences for the employee.
This approach appeared consistent with the protective character of the job security regime.
4. The “Wage as of the Date of Filing the Action” Rule Introduced by Act No. 7036
With the amendment introduced by Act No. 7036, the legislator sought to eliminate the controversy surrounding the determination of the wage. The relevant provision stipulates:
“The court or the arbitrator shall determine, in monetary terms, the compensation regulated in the second paragraph and the wages and other rights regulated in the third paragraph, on the basis of the wage as of the date of filing the action.”
With this explicit provision, the wage to be taken as the basis for calculating both compensation for non-reinstatement and wages for the idle period was established as the employee’s gross wage as of the date on which the action was filed.
In its recent jurisprudence, the Court of Cassation has consistently applied this provision and has emphasized that, particularly in reinstatement actions filed following the mandatory mediation process, the wage as of the date of filing the action must be taken as the basis.
The purpose of this regulation is to ensure certainty in calculations, enhance the enforceability of judgments, and eliminate the divergent practices that had emerged under the previous regime.
5. Loss of Rights Arising in Practice
Although the “wage as of the date of filing the action” criterion has introduced methodological clarity, it may give rise to serious problems in practice, particularly in cases of prolonged litigation and periods of high inflation.
Reinstatement proceedings frequently extend over several years, considering the stages of first instance, regional appellate review, and cassation. During this period, the employee is deprived of regular income and is often compelled to work in lower-paid positions.
Nevertheless, compensation for non-reinstatement and wages for the idle period are fixed on the basis of the wage as of the date of filing the action, and subsequent wage increases or economic developments are not taken into account. In conditions of high inflation, this may result in a substantial erosion of the real value of the receivable.
Consequently, an employee subjected to unlawful termination may suffer a second economic loss due to the length of the judicial process. Conversely, for the employer, the fixation of the wage as of a specific date provides predictability and limits financial risk.
This development constitutes a significant departure from the pre-2018 approach, under which the employee was protected “as if he or she had continued working.” Whereas the previous system allowed for a dynamic evaluation of wages, the current system effectively freezes the wage as of a single date.
6. Evaluation and Conclusion
Wages and other rights pertaining to the idle period, as well as compensation for non-reinstatement, should be awarded on a gross basis, with statutory deductions to be considered at the enforcement stage.
With respect to the idle period following an invalid dismissal—limited to a maximum of four months—all pecuniary rights to which the employee would have been entitled had he or she continued working should be taken into account. However, by their nature, payments that arise solely from actual performance of work—such as overtime pay, compensation for work on weekly rest days or national and public holidays, or sales-based commissions—cannot be included within this scope.
In conclusion, while the “wage as of the date of filing the action” criterion introduced by Act No. 7036 ensures clarity in calculation and uniformity in practice, it may prove insufficient to compensate for the employee’s real losses, particularly in cases involving lengthy proceedings and high inflation. The fixation of the wage as of a single date may produce outcomes that weaken the protective purpose of the job security regime.
For this reason, academic doctrine has advanced views advocating more flexible and equitable approaches that take into account the specific circumstances of each case and the principle of interpretation in favor of the employee. In order to ensure that the job security system is applied in a manner consistent with the social state principle, it is of paramount importance to reassess the balance between normative certainty and effective protection.
[1] Merits No: 2009/34595, Decision No: 2009/37899, the 9th Civil Chamber of the Court of Cassation.