In most workplaces, employees go on annual leave but only receive their wages for the leave period with their end-of-month salary. However, the law states the exact opposite: leave pay must be paid in advance before the employee starts their leave. Whether a violation of this obligation would grant the employee the right to rightful termination was long debated among departments and regional courts of justice; the 9th Civil Chamber of the Supreme Court of Appeals guided this debate with its decision to resolve the dispute in 2025. In this article, we address the issue in light of current case law.
Short Summary
The employer is obliged to pay annual leave wages in advance before the employee starts their leave or to provide them as an advance (Labor Law Art. 57). This is an absolutely mandatory rule; no separate request from the employee is required.
The 9th Civil Chamber of the Supreme Court of Appeals’ decision to resolve the dispute has reinforced the stance that a violation of this obligation constitutes a valid reason for rightful termination for the employee.
In the event of rightful termination, the employee may be entitled to severance pay (but not notice pay).
The fact that the employee has been granted excessive leave does not negate the obligation of advance payment.
If leave pay is not fully accrued and paid, annual leave is not considered to have been properly granted.
Furthermore, pursuant to Labor Law Art. 103, improper/incomplete payment of leave pay results in a separate administrative fine for each employee.
1. When is Leave Pay Paid? (Labor Law Art. 57)
Labor Law No. 4857, Art. 57 explicitly specifies the payment period: “The employer is obliged to pay the annual leave wage to every employee taking annual paid leave, in advance or as an advance payment, before the employee starts their leave period.”
The same obligation is reiterated in Article 21/2 of the Annual Paid Leave Regulation and covers other rights of a wage nature that fall within the leave period. The phrase “is obliged” here indicates that the rule is absolutely imperative: The employee does not need to specifically request the leave pay; the employer is obliged to pay it spontaneously. The wage is calculated based on the employee’s average earnings over the last year. Article 425 of the Turkish Code of Obligations also serves as a basis for similar assurance in maritime and general employment relationships.
2. Turning Point: Decision of the 9th Civil Chamber to Resolve the Dispute
There was a divergence of opinion among regional courts of appeal regarding whether the failure to pay leave wages in advance constituted a just cause for termination. For example, one chamber of Izmir Regional Court of Appeals ruled that the condition for just cause for termination had not been met, on the grounds that the employee had not requested advance payment and had taken excessive leave; another chamber, however, deemed the failure to pay in advance as a just cause for termination and ruled that the employee was entitled to severance pay. This dispute was brought before the Supreme Court.
Supreme Court 9th Civil Chamber — Decision on the Resolution of Dispute, No. 2025/2487, Date 10.03.2025.In the decision; when Article 57/1 of the Labor Law and the provisions of the Regulation are evaluated together, it has been established that the wage pertaining to the leave period must be paid to the employee in advance or as an advance payment before the leave begins in a strictly mandatory manner, that the employee does not need to make a separate request for this; and that non-compliance with this obligation grants the employee the right to terminate for just cause pursuant to Article 24 of the Labor Law.
3. Disagreement: Just Cause Termination or Not?
The jurisprudence on the matter has been shaped by two main lines:
| View | Reasoning | Conclusion |
|---|---|---|
| A) Is a valid reason for termination (current/dominant view) | The non-payment of vacation pay before the start of the leave falls under “non-payment of wages in accordance with the law” (Labor Law Art. 24/II-e) and “non-application of working conditions” (Art. 24/II-f). | The employee can immediately terminate for just cause; and is entitled to severance pay. |
| B) Is not a valid reason for termination on its own (contrary/older view) | Annual leave is a constitutional right to rest; as a rule, it does not convert into wages while the contract is ongoing. Vacation pay only converts into a wage claim upon the termination of the employment contract. | Non-payment of vacation pay does not, on its own, provide a basis for valid termination. |
Both views converge on a single point: It is undisputed that payment must be made in advance or as an advance before the leave begins. The divergence lies solely in whether this violation will lead to valid termination. The current stance of the Supreme Court’s 9th Civil Chamber is in favor of valid termination.
4. Does Granting Excessive Leave Remove the Obligation?
No. The fact that an employee has been granted more annual leave than they are entitled to does not remove the obligation for advance payment under Article 57. While Labor Law Article 53 is relatively imperative (can be increased in favor of the employee), the rule for advance payment in Article 57 is absolutely imperative; therefore, the defense “I already granted extra leave” does not legitimize not making the advance payment.
5. Condition of “Proper Granting”
According to Supreme Court practice, if the wages for the annual leave period are not fully accrued and paid, the annual leave is not considered to have been granted properly. In other words, even if the employer says “I granted the leave,” if they have not paid the leave remuneration in accordance with the rules, that leave may not be considered validly granted, and a leave receivable may arise. Therefore, documenting the payment with phrases such as “annual leave pay / leave advance” in the bank statement or payroll is important for proof.
6. Calculation and Offset Upon Termination
When the employment contract ends, the remuneration for unused leave is calculated and paid based on the employee’s last wage. Although the non-payment of leave remuneration according to the rules while the contract was ongoing is a separate issue, in the calculation after termination, the parts previously actually paid by the employer should be offset. This prevents the employee from collecting double payment.
7. Administrative Sanction for the Employer: Labor Law Article 103
The issue is not limited to private law disputes (such as justified termination, severance pay, or leave entitlements). The improper payment of annual leave wages also constitutes a reason for an administrative sanction. Article 103 of the Labor Law, which regulates administrative monetary penalties, states the following:
“An employer or employer’s representative who divides annual paid leave contrary to Article 56 of this Law, or pays leave wages contrary to the procedure specified in paragraphs three and four of Article 57, or pays them incompletely, or fails to pay the wage for earned leave under Article 59 when the employment contract ends without the leave being taken, or fails to grant leave or grants it incompletely contrary to the principles and procedures of the regulation specified in Article 60, shall be subject to an administrative monetary penalty of … for each employee in this situation.”
This provision sanctions multiple violations within a single article. From our perspective, the two most important cases are as follows:
Payment of leave wages contrary to procedure/incompletely: This refers to the payment of leave wages contrary to the procedure in Article 57 (in advance/as an advance before starting leave) or incompletely. In official administrative monetary penalty schedules, this violation is also listed separately under the heading “Paying leave wages illegally or incompletely (Art. 57 → Art. 103)”.
Non-payment of leave wages upon termination: This refers to the non-payment of wages for earned leave when the contract ends without the leave being taken (Art. 59 → Art. 103).
The most critical feature of the penalty is that it is applied separately “for each employee”. That is, if the violation concerns 20 employees, the penalty is calculated twenty times, not once. This entails a significant financial burden for employers who normalize such practices.
The penalty amount is updated annually with the revaluation rate. According to the tables published by the Ministry of Labor and Social Security, this administrative fine related to annual leave pay increased to approximately 4,815 TL in 2026, from approximately 3,837 TL in 2025 for each employee. For the current amount, the official administrative fine schedule for the relevant year should be taken as a basis.
Consequently, not paying annual leave wages in advance creates three distinct risks for the employer: (1) the employee’s justified termination and severance pay, (2) annual leave entitlement if the leave is deemed “not properly granted”, (3) an administrative fine calculated separately for each employee.
Summary application notes:
For the employee: If annual leave pay is not paid before the leave starts, justified termination and severance pay may come into question; the reason must be clearly stated in the termination notice.
For the employer: Annual leave pay must be paid in advance/as an advance before the leave, and documented with payroll/bank statements; otherwise, there is a risk of severance pay, annual leave entitlement, and an administrative fine.
For both parties, the condition of statute of limitations and mediation for litigation must be observed.
Frequently Asked Questions (FAQs)
When should annual leave pay be paid?
According to Labor Law Article 57, the employer must pay the wage for the leave period in advance or provide it as an advance before the employee starts the leave. This is an absolutely mandatory obligation, and the employee does not need to make an additional request.
My leave pay was not paid in advance; can I terminate with just cause and receive severance pay?
According to the current practice of the Supreme Court 9th Civil Chamber, the non-payment of leave pay before the commencement of leave is considered a valid reason for termination under Labor Law Article 24/II-(e) and (f), and the employee may be entitled to severance pay. The conditions of the specific case must be carefully evaluated.
If the employer granted extra leave, does the obligation for advance payment cease?
No. The fact that the employee was granted more leave than they were entitled to does not negate the advance payment obligation under Article 57; this obligation is absolutely mandatory.
If leave pay is not paid, is the leave considered “granted”?
According to the Supreme Court’s practice, if the full wage for the leave period is not accrued and paid, annual leave may not be considered properly granted; in this case, a leave receivable may arise.
Does the non-payment of leave pay incur any other sanctions for the employer?
Yes. In addition to the consequences in private law (termination with just cause, severance pay, leave receivable), under Labor Law Article 103, an administrative fine is imposed for each employee separately if leave pay is paid improperly or incompletely. This fine is updated annually; for 2026, it is approximately 4,815 TL per employee.
Resources and Our Related Articles
Official sources: Labor Law No. 4857 (mevzuat.gov.tr) · 2026 Labor Law Administrative Fines Schedule (ÇSGB)
Other articles on employee rights:
Can an Employee Who Resigns After 10 Years of Uninterrupted Service Receive Severance Pay?
Seafarer Claims (Seafarer Claims)
What Are a Seafarer’s Rights if Dismissed During the Probationary Period?
Seafarer Working Hours and Overtime Rights
Why is Expert Legal Support Necessary?
Annual leave pay disputes are based on technical evaluations such as whether the termination is deemed justified, the right to severance pay, the calculation of leave entitlements, and offset items. Properly stating the reason in the termination notice, preparing supporting documents (payroll, bank records), and observing mediation/statute of limitations periods determine the outcome for both the employee and the employer.
2M Law Office provides support to employees and employers in the Tuzla, Pendik, Kartal, Maltepe and Gebze/Kocaeli region regarding litigation strategy and petition preparation in labor law, severance and notice pay, leave pay receivables, and justified termination disputes. For an assessment related to your specific case: 2mhukuk.com
This article is for general informational purposes only; it does not constitute legal advice or attorney services. Each dispute should be evaluated under its specific conditions.
