Extended Summary

The concept of premium based earning refers to the earnings of the insured that subject to premium. This concept is one of the most fundamental concepts of social insurance law that the premium based regime is adopted. From the perspective of the insured, premium-based earnings on the one hand determine which incomes and to what extent will be taken into account in the amount of premium and on the other hand affect the amount of social security benefits. From the perspective of the institution, this concept determines the amount of premiums, which are the most basic financial source of the social security system. In this respect, determining the earnings that are dependent on social security contributions has great importance on operating the social insurance system decently.

The importance of premiums in social insurance law also shapes the concept of premium-based earnings. As a matter of fact, the concept of premium-based earnings is based on the principle of taking into account the gross amount of all earnings of the insured in a month. However, all of the employment claims are not accepted as premium-based earning. According to Law No. 5510, some employment claims are partially or completely excluded from the premium base. Although the law has adopted limited counting principle in terms of employment claims that are not subject to premium, in the practice of the law an approach is preferred in which damages are not included in the premium base. In this sense, many damages are not considered as a earning that subject to premium.

It can be said that not accepting damages as a premium based earning is coherent with the spirit of social security law. Since in order for an employment claim to be considered as a earning subject to premium, there must be a certain degree of casual link between the relevant claim and employment. While damages aim to compensate for the physcical and personal injuries suffered by the employee, to punish the employer or to equalize the sacrifice, it prevents the establishment of a causal link between damages and employment to the extent that will enable the damages to be included in the premium base. Nevertheless, it can be seen that some damages aim to compensate for the wage loss of employeee and in this respect, they contain wage-related features. In this sense, the unused annual leave payment claim, the unused jobseeker’s claim, and in some cases over time payment are damages with the wage character in Turkish law. And these mentioned claims as secondary obligations are aim to compensate for the directly or indirectly loss of wages and constitute the substitution of wages, and in the application of Law No. 5510, premiums are deducted from these damages.

Starting from the concept of the damages with wage character, it can be said that the damages for the wages for the remaining term is also a claim that has this nature. Since, with this damages, the wage loss suffered by the employee due to unjust termination of the fixed-term employment contract is attempted to be compensated. In fact, in the calculation of this damages, the deduction of the income that employee has obtained from another job or avoided from obtaining intentionally shows that this damages aims to compensate for the real loss of wages. This feature constitutes different aspect of this damages from the payment in lieu of notice. Hence, when the practice of Swiss social insurance law, which adopts a very similar approach to Turkish social insurance law, is examined, it is seen that the damages for the wages for the remaining term is accepted as a claim with wage character and subject to premiums.

Therefore, the general approach adopted in the practice of Law No. 5510 regarding damages with the wage character should also be enabled for the damages for the wages for the remaining term. In other words, this damages is also an employment claim that is subject to premiums. Since this damages is depending on the termination of the employment contract, in the addition of it to the premium base, the principles that are accepted for the claims which are paid by employer after the termination of the employment contract should also be implemented. Thereby the damages for the wages for the remaining term should be included in the earnings of the month in which the employment conract is terminated unjustly as well as taking into account maximum rate of the earnings subject to premium.