Do Salary Increases During the Notice Period Affect the Employee in Cases Where the Employment Contract Is Terminated by the Employer Without Granting the Notice Period and Where Notice Compensation Is Paid Incompletely?

According to the established jurisprudence of the Court of Appeal, the employment relationship is deemed to continue until the end of the notice period. Therefore, the employee must benefit from any salary increases that come into effect during such period, and termination-related receivables must be calculated on the basis of the increased salary. The main discussion in practice, however, concerns whether such increases should be taken into account in cases where the notice period is not granted and the notice compensation is paid incompletely.

Indeed, an examination of different Court of Second Instance decisions reveals that divergent approaches have been adopted on this issue. For example:

• In its decision dated 10 January 2025, the 5th Civil Chamber of the Denizli Court of Second Instance upheld the first instance court’s decision, accepting that the termination date should be taken as the basis and that salary increases that would occur during the notice period should not be taken into account.
• Conversely, in its decision dated 28 March 2019, the 9th Civil Chamber of the İzmir Court of Second Instance clearly established that, in cases where the termination is effected without granting the notice period and without full payment of notice compensation, the employee must benefit from salary increases effective until the end of the notice period, and accordingly set aside the first instance court’s decision.
• In its decision dated 25 December 2020, the 8th Civil Chamber of the Samsun Court of Second Instance concluded that the statements in the first instance court’s reasoning regarding the consideration of salary increases during the notice period were not directly related to the specific dispute.

In light of these divergences, the file was referred to the 9th Civil Chamber of the Court of Appeal in order to resolve the inconsistency. With its decision dated 18 June 2025 (File No. 2025/1599 E., Decision No. 2025/5178 K.), the Court of Appeal resolved the divergence of opinion.

The Court of Appeal adopted the approach of the İzmir Court of Second Instance and held that, where an indefinite-term employment contract is terminated without duly granting the notice period and without full payment of notice compensation, the employee must benefit from salary increases implemented in the workplace until the end of the notice period.

Following this decision, the framework regarding the issue has been clarified as follows:

• The employee benefits from salary increases occurring during the notice period if they continue to work during such period.
• Even where the employment contract is terminated without granting the notice period and with incomplete payment of notice compensation, salary increases occurring during the notice period must be taken into account.
• However, where the employment contract is terminated without granting the notice period but with full payment of notice compensation, the employee will not benefit from salary increases that would occur during the notice period.

Accordingly, it is important for employers, in termination processes where the notice period is granted, to take into account not only the salary at the termination date but also any potential salary changes that may occur during the notice period when calculating notice-related entitlements. In cases of termination by payment in lieu of notice, employers should ensure that the notice compensation is calculated and paid in full and accurately; otherwise, they may face additional claims.