AN INVESTIGATION ON THE EFFECTS OF THE SEVERANCE PAY FUND BILL ON BUSINESS LIFE

Abstract

The employment relations between the employee and the employer within the legal framework are regulated mainly by labor laws. Labor laws have a structure that describes the rights and interests of both the employee and the employer and determines their responsibilities. Concerning the employees and the employers, severance pay practice is also an important regulation in the labor laws. In general, the severance pay, which is practiced in many countries, is the accumulated money paid to the employee by the employer if the employment relationship between the employee and the employer terminates in the ways specified in the law; its amount varies based on the employment period and the wages received. Severance pay is one of the important legal rights legislated in favor of the employee in business life. The severance pay practice may differ according to the economic conditions of the countries, the structure of the labor markets, and legal regulations.The severance pay practice, which entered the business life in Turkey with Labor Law No. 3008 dated 1936, has evolved its current form by taking a part in various laws over time. Today, the legal regulation on Severance Pay is practiced through the Provisional Article 6 of the Labor Law No. 4857. As stated clearly in the Labor Law, the main target in the practice of severance pay is the establishment of the severance pay fund. Since the size of the multidimensional effect of severance pay concerns all segments of the society, the practice of severance pay fund is also seriously discussed in the public. In terms of both its monetary aspect and its value in the struggle against unemployment, severance pay is an issue that needs to be addressed sensitively and to be adopted as a result of the reconciliation of all segments of the society. The study examines the severance pay in the conceptual framework through the literature review at the beginning; then, it reveals the severance pay systems practiced in the world and Turkey. The proposals on the severance pay fund bill and its effects are discussed in the last part of the study.