It aims to provide legal certainty that fixed-term employees may receive a balance of contract pay and compensation pay even if terminated before the end of their contract.

Article 62 states that the contract balance must be paid to fixed-term employees who are terminated before the end of their fixed-term employment contract, and this obligation.

This obligation is waived if the employment contract is concluded, among other things, as a result of a particular event or situation, as set out in the employment contract, company regulations, or collective bargaining agreement, which results in the termination of employment.

In addition, under Article 61 (A) of the Labour Law, as amended, if a fixed-term employment contract expires (i.e., upon expiry of the terms of the employment contract or completion of a specific job), the employer must provide compensation remuneration to the employee.

Suppose either party terminates the employment relationship before the termination period specified in the fixed-term contract. In that case, the employer must provide compensation pay, which will be calculated based on the period of the fixed-term employment contract completed by the employee.

In practice, this rule has led to application distortions that have prompted the Supreme Court to intervene.

In SEMA No. 3, the Supreme Court offers an interpretation of Article 62 of the Manpower Act, as amended and its implementing regulations, clarifying that fixed-term employees whose employment relationship is terminated before the contract period are entitled to receive the balance of the contractual and compensatory remuneration, considering the period they have served. 

Employers must consider these guidelines of the Supreme Court, which will be applied in the Courts, adapting to the principles enshrined therein, especially in the event of termination of a fixed-term employment relationship, to avoid litigation and possible convictions.