Turkish Supreme Court Shortens Statute of Limitations for Unused Paid Leave Claims from 10 to 5 Years

In a landmark shift affecting both employees and employers, Türkiye’s Supreme Court of Appeals (Yargıtay) has revised its long-standing legal stance on the statute of limitations for unused annual leave compensation. Under the new precedent, workers who leave their jobs will now have only five years to claim compensation for unused vacation days—down from the previous 10-year limit.

The decision is expected to significantly impact both workers’ legal rights and employers’ retroactive liabilities. The updated legal interpretation came following a consolidation of rulings between judicial chambers, reported by Habertürk’s Ahmet Kıvanç.

Backdated Application for Previous Years

Previously, the 9th Civil Chamber of the Supreme Court upheld a 10-year statute of limitations for employment terminations that occurred between 2012 and 2017. However, the new harmonized interpretation retroactively applies the 5-year limit to those years as well. This means claims regarding unused annual leave must be filed within five years of contract termination, even for cases predating the 2017 reforms.

Legislative Timeline: From 5 to 10 Years—and Back Again

Before July 1, 2012, Turkish labor law imposed a 5-year statute of limitations for annual leave claims. With the implementation of the Turkish Code of Obligations that year, the period was extended to 10 years. This was again revised with the Labor Courts Law enacted on October 25, 2017, which reestablished the 5-year rule across all categories of worker receivables.

According to transitional provisions in the law, existing claims prior to October 25, 2017, were allowed to follow the previous deadlines. However, if the remaining period exceeded five years, the new statute now applies instead.

Right to Compensation Begins When Employment Ends

Under the Supreme Court’s clarified interpretation, the right to receive compensation for unused annual leave arises when the employment contract is terminated. The limitation period starts from the date of termination, regardless of whether the employee resigned or was dismissed for just cause.

Crucially, this right cannot be revoked based on how the employment ended. Employers are still legally obligated to pay for any unused leave, regardless of the nature of the termination.

Legal Risk for Employers, Potential Loss for Employees

This change poses a potential loss of rights for employees who left their jobs in the past and failed to file claims in time. Conversely, employers must now reassess their liability for pending compensation cases, especially for former employees who might still be within the revised statute of limitations.

The ruling marks a significant recalibration in the balance of legal responsibilities, prompting calls for increased awareness and diligence among both employers and workers.