When a worker wins a reinstatement lawsuit, the court normally orders that the worker be returned to their job. However, in some cases the employer refuses to allow the worker to resume work. In such situations, the worker is entitled to compensation called reinstatement-refusal compensation.
What Is Reinstatement-Refusal Compensation?
Reinstatement-refusal compensation is the payment due to an employee when they win a reinstatement lawsuit but the employer does not allow them to return to work. After the employee obtains the court decision confirming reinstatement, they must notify the employer of their request to be reinstated within 10 days from the date the decision is delivered by mail. Following that request, the employer has 1 month to put the employee back to work. If the employer fails to do so, they are obliged to pay the employee wages and related benefits for the idle period up to 4 months. In other words, when an employer or their representatives refuse to allow the employee to resume work, they must pay reinstatement-refusal compensation for the applicable period.
If the employer does not reinstate the employee, in addition to the lost wages for the idle period, reinstatement-refusal compensation is calculated based on a comparable (benchmark) wage and may range from 4 to 8 months depending on the reason for termination and the employee’s length of service. The amount and calculation method for the reinstatement-refusal compensation are determined according to the specific circumstances and the court decision, using the comparable wage concept as the basis.
How Is Reinstatement-Refusal Compensation Calculated?
The calculation of reinstatement-refusal compensation is based on the concept of a comparable (benchmark) wage. Comparable wage is made up of several factors. It is defined as the wage of employees who perform the same or similar work or profession, who work for the same or similar employers, who have similar length of service, similar skills or experience, and who hold the same or similar job title. These employees’ wages serve as benchmarks for determining the compensation.
The compensation calculation relies on these benchmark wages. Priority is given to the wage of a comparable employee working at the same workplace. If there is no comparable employee at the same workplace with similar duties, experience, and length of service, wages paid to employees at other workplaces in the same sector are considered. If the employee belongs to a professional association or similar organization, that body may be asked for an opinion when determining the comparable wage. The comparable wage covers the basic gross wage paid solely for performing the work; additional benefits or supplementary payments are not included in the wage used for calculation.
Example Calculation of Reinstatement-Refusal Compensation
When preparing an example calculation, the benchmark wage used must be the comparable employee’s wage at the date the employer notified the employee of the refusal to reinstate. Reinstatement-refusal compensation is calculated exclusively on the comparable wage. Unlike severance pay, monthly premium and service records are not included in the calculation, and income tax is not withheld on the compensation. For example: if the employee’s last gross monthly wage is 3,300 TL and the idle period amounts to 5 months, the compensation is calculated as 3,300 x 5 = 16,500 TL. Reinstatement-refusal compensation is exempt from social security premiums and income tax but is subject to stamp tax. If stamp tax is deducted from that amount — for example 16,500 x 0.00759 = 125.24 TL — the net amount the employee would receive for the five-month period would be 16,374.76 TL.