Release agreements concerning employee receivables from employers are subject to certain formal requirements under Article 420 of the Turkish Code of Obligation No. 6098 (“TCO”). In this regard, the following conditions must be met:
- Release agreements concerning employee receivables from employers must be executed in writing,
- At the date of release, at least one month of period must pass as of the termination of employment,
- Type and amount of the receivable subject to release must be specified explicitly,
- Payment must be effectuated in full and via bank,
Release agreements which fail to meet these requirements shall be invalid.
Applicability of Article 420 of the TCO to the validity of release agreements in settlement minutes executed as result of mediation in scope of the Turkish Law on Mediation in Civil Disputes No. 6325 (“HUAK”), which is applicable to resolution of civil disputes arising from affairs at the parties’ free disposal, has been a controversial issue.
With the decision dated 07.02.2022 and numbered 2022/436 E., 2022/1380 K., 9th Civil Chamber of the Court of Cassation ruled that Article 420 of the TCO shall not be applicable to releases made before mediators. Otherwise, it would be impossible for parties to settle before a mediator. In this regard, since HUAK sets forth that parties cannot initiate legal proceedings about the matters agreed by the parties in case of reaching an agreement as result of mediation, the validity of mediation settlement minutes shall not be evaluated in light of the rules concerning release under Article 420 of the TCO.
The referred decision stresses that, although the same chamber previously assessed the mediation settlement minutes in scope of release provisions, following the closure of 22nd Civil Chamber of the Court of Cassation and transfer of all works to 9th Civil Chamber of the Court of Cassation, this approach has been deserted upon re-evaluating the matter.
Clearly, the Court of Cassation’s current approach facilitated the releases contained in settlement minutes executed before mediators in relation to employee receivables. One may say that the referred decision encourages mediation in employment disputes.
Beril Yayla Sapan
Kardelen Özden