On March 3, 2023, with the regulation that came into effect and was published in the Official Gazette, many employees gained the opportunity to retire without an age requirement. Also with the effect of the five-point incentive given to employers for the employees which resigns and starts to work again being subjected to social security support premiums within 30 days in the same workplace, many retirees restarted to work again after retirement. This situation has raised many questions in labor law. One of the recent questions on our agenda is whether retired employees will be paid wages for the days they are on sick leave.

1- Do Employees Qualify For Wages During Sick Leave?

The answer to this question depends on whether the employee is working on a fixed monthly salary or not. 
As a general rule, wages are compensation for work performed, and if there is no work, wages are not paid. Article 32 of the Labor Law states, "Wages are the amount provided and paid in money by the employer or third parties for a person in return for work." Unless otherwise regulated in the law or agreed upon in an individual or collective employment contract, wages will not be paid for the days an employee is on sick leave. Article 25 of the Labor Law also states, "No wages shall be paid for the periods during which the employee is unable to go to work due to the suspension of the employment contract," and during sick leave, the employment contract is suspended.

However, for employees receiving a fixed monthly salary, there is a separate regulation in Article 48, Paragraph 2 of the Law No. 4357: "The temporary incapacity allowance paid by the Social Security Institution for the days not worked due to illness shall be offset against the wages of fixed salaried employees." According to this article, for the days a fixed salaried employee is on sick leave, the salary must be fully paid. If the employee is entitled to temporary incapacity allowance, the amount paid by the Institution is deducted from the salary, and the remaining amount is paid to the employee. The last paragraph of Article 49 of the Labor Law also implies that the salaries of monthly fixed salaried employees will be fully paid even if they are unable to work due to illness: "To salaried employees whose monthly wages are fully paid in cases of illness, leave, or other excusable reasons..."

There is no obstacle for the employer to fully pay the salary of such employee regardless of whether the employee receives incapacity allowance. However, if a fixed salaried employee does not qualify for incapacity allowance for any reason, no deduction can be made from the salary.

Court decisions also support this perspective. The 9th Civil Chamber of the Court of Cassation stated in its decision dated December 16, 2019: "Based on the content of the file, there is no legal basis for the unilateral deduction of the plaintiff's wages for the 3-day period during which the plaintiff, who is understood to be working on a fixed monthly salary, was on sick leave. However, according to Article 48/2 of Law No. 4857, if the plaintiff employee has received temporary incapacity allowance from the Social Security Institution for these 3 days, this amount should be offset against the plaintiff's wages." (Court of Cassation 9th Civil Chamber, 2016/10974 E., 2019/22392 K., 16.12.2019)

By contrast, for other wage payment methods where wages are determined based on the time worked, if not otherwise agreed upon in the employment contract or collective labor agreement, the employer is not obligated to pay wages for the days the employee is on sick leave. (Nuri Çelik/Nurşen Caniklioğlu/Talat Canpolat/Ercüment Özkaraca, İş Hukuku Dersleri, 2022, p. 350; Emine Tuncay Senyen Kaplan, Bireysel İş Hukuku Labor Law, 2019, p. 186).

2- Should Retired Employees Be Paid During Sick Leave?

Retired employees who continue to work with social security support premiums are not eligible for short-term insurance premiums other than work-related accidents and occupational diseases. Therefore, they cannot qualify for temporary incapacity benefits. In this case, even if they receive a fixed monthly salary, according to Article 48, Paragraph 2 of the Labor Law, their salaries cannot be offset against temporary incapacity benefits. Consequently, unless the sick leave is due to a work-related accident or occupational disease (in which case a retired employee may qualify for temporary incapacity benefits), there should be no deduction from the salaries of retired employees for the days they are on sick leave (Selahattin Bayram, “Maktu Aylık Alan Sosyal Güvenlik Destek Primine Göre Çalışan Personele 4857 Sayılı İş Kanunu’nun 48 Ve 49 Uncu Maddelerinin Uygulanması Sorunu," Mali Çözüm, Mayıs-Haziran 2011, p. 105, p. 358; Özkan Bilgili, " İstirahatli İşçiye Ücreti Tam Olarak Ödenir (Mi?)?," Legal İş Hukuku Dergisi, 2011/32, p. 1360).

On the other hand, based on Article 409 of the Turkish Civil Code, it might be argued that a retired employee, who continues to receive retirement pay during sick leave days, is already compensated through their retirement pay, and therefore, no additional payment is necessary for those days. As per the Article "In a long-term employment relationship, if the employee cannot perform the work obligation for a short period without fault due to illness, military service, or similar reasons arising from the law, the employer is obliged to pay the employee a fair wage for that period if not compensated in another way.", However, due to the specific provision in the Labor Law, Article 48, Paragraph 2, the primary application should be given to this provision. Therefore, in our opinion, no deduction should be made from the salaries of retired employees receiving a fixed monthly salary for the days they are on sick leave. An employer making such a deduction would be acting contrary to Article 48, Paragraph 2 of the Labor Law.

For other forms of payment apart from fixed monthly salaries, if the employee is not eligible for incapacity benefits (unless otherwise agreed in the individual or collective employment contract), the employer is not obligated to pay wages for the days the employee is on sick leave.

3- What Is A Fixed Monthly Salary?

There is no specific regulation in the law regarding what a fixed monthly salary is. However, in doctrine and court decisions, the conditions under which the salary is considered a fixed monthly salary have been discussed. A fixed monthly salary is a payment made to the employee regardless of whether the month has 28, 30, or 31 days, and it remains constant regardless of the number of days the employee worked or whether they were on sick leave. The characteristic of a fixed monthly salary is that it represents the total fixed amount for the work performed in a month. Holiday pay, national holidays, and general holidays are included in this salary (Çelik/Caniklioğlu/Canpolat/Öz karaca, İş Hukuku Dersleri, 2022, p. 778; Sarper Süzek, İş Hukuku, 2023, p.377; Haluk Hadi Sümer, Labor Law, Ankara 2022, p. 79-80). In determining a fixed monthly salary, the number of days the employee actually worked is not taken into account, and a monthly working period of arbitrarily accepted thirty days is considered for determining the salary (Bilgili, p. 1344-1346).

In determining whether an employee receives a fixed monthly salary, it is also necessary to consider whether any deductions are made from the salary on days of justified absence. In such cases, if the salary is fully paid, the employee is considered to be on a fixed monthly salary and cannot additionally claim holiday pay. If, despite being justified, deductions are made from the employee's salary, it cannot be considered a fixed monthly salary, and the employee is entitled to receive holiday pay and general holiday pay separately (Çelik/Caniklioğlu/Canpolat/Özkaraca, İş Hukuku Dersleri, 2022, p. 350).

It is important to distinguish between a fixed monthly salary and monthly payment of the salary in other forms. While a fixed monthly salary is a payment system, monthly payment is a payment method (Bilgili, p.1344). Although wages can be paid monthly based on the time worked, the mere fact that wages are paid monthly does not necessarily indicate that the wages are fixed monthly wages. Similarly, deducting wages for the days employees are on sick leave or not paying their premiums in full does not prove that employees are working on a daily wage basis alone (Court of Cassation 9th Civil Chamber, 2023/7056 E., 2023/7184 K., 16.5.2023).

In light of these explanations, when determining whether the salary of a retired employee on sick leave shall be fully paid, it is essential to first evaluate the employee's payment system and determine whether the salary is a fixed monthly salary. If it is determined that the employee receives a fixed monthly salary, there should be no deduction from the salaries of retired employees for the days they are on sick leave, except in cases of sick leave due to work-related accidents or occupational diseases. Otherwise, the employee, whose salary is not fully paid, will have the right to refrain from working and/or terminate the employment contract with just cause until the salary is fully paid. Additionally, in case of partial payment of salaries, the employee may take legal action against the employer for the collection of the underpaid part of the salary. Furthermore, according to Article 102 of the Labor Law, an administrative fine of 1,515 TL may be imposed on the employer for each employee and each month for which the wage is not paid in full.