Employment & Labour


  • What is Premium?

Premium can be defined as additional payments given by the employer as a reward in order to make the employee more willing to produce goods or services and to increase his success. The purpose of premium payment is to encourage the employee to work more efficiently. Since the premium is personal, unlike the bonus, premium payments do not have to be of a general nature. However, unless there are valid reasons justifying the discrimination by the employer, the employer has a duty of equal treatment in terms of premium application. In accordance with paragraph 32/I of the Labor Law No. 4857, wages are generally defined as the amount provided to a person by the employer or third parties in return for a job and paid in money. In the content of the law, the wage annexes are not regulated separately, but in accordance with the phrase “…wages, premiums, bonuses and all kinds of remuneration to be deposited into the bank account…” in paragraph 32/II of the Law, it is foreseen that the premium, bonus and all kinds of payments of this nature should be deposited into the bank account in addition to the wage. Accordingly, “premium” is included in the scope of the Labor Law as a wage supplement.

  • Conditions for Entitlement to Premium

In order for a employee to be entitled to a premium, it must first be agreed upon in the employment contract or collective bargaining agreement, and if not, it must have become a workplace practice. At this point, it should be noted that workplace practice takes place in the form of continuous provision of a benefit on its own initiative, unilaterally and under the same conditions, without an employer’s legal and contractual responsibility. For this reason, rights can be earned even if it is not included in the employment contract or collective bargaining agreement. A premium application that has become a workplace practice without a contractual relationship, although it is a benefit unilaterally provided by the employer, cannot be unilaterally withdrawn by the employer within the framework of the employer’s management right. In the event that the employer’s premium payment in case of workplace application is withdrawn in this way, there will be a change in the working conditions against the worker within the scope of Article 22 of the Law No. 4857. Therefore, any adverse change made without the employee’s consent will not be valid. Well, if the premium application has been determined by the collective labor agreement and is withdrawn unilaterally by the employer, can the application be terminated upon the employee’s approval? The answer to this question is no. Because the changes that can be made in this direction by the persons authorized to sign the Collective Bargaining Agreement are only valid for the future. Therefore, the amendment in terms of premium practices stipulated by the Collective Bargaining Agreement cannot be valid even with the individual waiver of the employee.

Another condition for entitlement to the premium is the realization of the performance determined as the criterion. In this context, it can be said that the premium payment is a conditional wage supplement. Therefore, the condition considered as performance must also be fulfilled. In accordance with the freedom of contract between the parties, the parties can add different conditions to the contract in addition to the performance requirement. For example; such as when an employee has not unfairly terminated their employment in order to qualify for a premium. In addition, at this point, in the wage systems based on the performance of the worker, it is also necessary to determine the normal performance in order to measure the performance. In practice, many statistical tools are used for performance determination and can be determined by methods related to labor science. For this reason, after the performance criterion can be determined, the normal performance of the employee will be determined and the performances that are above the normally determined limit can be converted as a wage supplement through premiums. One of the points to be considered here is that the worker has the opportunity to affect the performance level. For this reason, if the employee does not have the opportunity to influence the performance result, it will not be possible to talk about the performance-based remuneration system and therefore the premium payment.

In order for the worker to be entitled to premium, it is not necessary to have worked at the workplace until the end of the period that requires the payment of the premium. The employee has the right to claim premiums, limited to the period of time worked at the workplace. In terms of not paying the premiums on time, it is possible for the worker to terminate the employment contract with just cause in accordance with Article 24/II-e of the Law No. 4857. In case the premium payments are not paid for twenty days or more, the worker also has the right to abstain from working according to Article 34 of the same Law. At this point, it should be noted that the burden of proof that the premiums have been paid rests with the employer. Premium receivables are subject to a five-year statute of limitations in accordance with paragraph 126/III of the Code of Obligations.

Harun Demir, Attorney at Law

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