Employment and Labor Law

The Draft Law on Labor Courts (“Draft Law”) was submitted for the opinion of the relevant entities on 23.03.2016[1]. The Draft Law provides the principles for mandatory mediations, in addition to the procedures for the establishment, duties, and operation of the labor courts. Mandatory mediation regarding labor disputes will be accepted for the first time under Turkish Law through the enactment of the Draft Law. Additionally, Labor Code No. 4857[2], Law No. 6325 on the Mediation Regarding Judicial Disputes[3] (“Law No. 6325”) and Law No. 6356 on Trade Unions and Collective Labor Contracts[4] will also be amended in accordance with the Draft Law. We will assess the principles and procedures for mandatory mediations in labor disputes in this Newsletter.

Mandatory Mediation

Art. 3 of the Draft Law provides that any claim regarding the employee’s receivables in relation to the individual or collective employment contracts and re-employment of the employee is subject to mediation prior to any lawsuit; otherwise, the lawsuit shall be rejected on the basis of the absence of conditions that constitute an action in accordance with Art. 115 of the Code of Civil Procedure (“CPC”). The application shall be submitted to the mediation office located in the counterparty’s domicile or place of work. If there is more than one counterparty, the application shall be submitted to the mediation office located in the domicile of one of the parties.

Procedure for Mandatory Mediation

The head of the Department of Mediation lists the mediators registered before the relevant registry, and which are willing to serve as mediators in accordance with their specialization area and the local court’s justice commission of their preference, and presents these lists to the relevant commission’s presidency. Upon submission of an application for mediation, the parties shall choose a mediator among the registered mediators, and the lists provided to the commissions. If the parties are unable to agree upon a mediator, the mediation office shall assign a mediator.

The mediator shall inform the parties that he/she has been assigned as mediator, and invites the parties to the first meeting. The mediator shall terminate the procedure within three weeks as of his/her assignment date; in cases where necessary, the period may be extended for a maximum period of one week by the mediator. The mediator shall issue the final minutes upon the termination of the procedure, and informs the mediation office with a copy of the final minutes.

The limitation period shall not run during the period as of the date of application to the mediation until the date of issuance of the final minutes; accordingly, the statutory period shall not run during this period.

Mediation Fees

If the parties reach an agreement using the mediator, the mediation fee shall be equally borne by the parties in accordance with Chapter 2 of the Minimum Mediation Fee Tariff (“Tariff”) unless otherwise agreed by the parties. In any event, the mediation fee shall not be less than the fee for two hours, determined by Chapter 1 of the Tariff. If the parties are unable to reach an agreement when before the mediator, the first two hours shall be paid by the Treasury, and the fee for the remaining hours shall be equally borne by the parties in accordance with Chapter 1 of the Tariff. The parties may agree otherwise. The fees paid by the Treasury and the Parties will be included in the court expenses.

On the other hand, the party that does not attend the mediation meetings with no excuse given shall be stated as such in the final minutes, and the relevant party shall be ordered to pay the court expenses, although the decision is in favor of the relevant party.

The parties may apply for financial assistance to pay the mediation fees; for that purpose, the decision of the court of peace located at the place of mediation office is required. Art. 334-340 of the CPC shall apply to issues on financial assistance.

In the absence of express provisions, the provisions of Law No. 6325 shall apply by analogy. In addition, the Draft Law provides that the Ministry of Justice is required to adopt a regulation on the other issues and details regarding application procedure, assignment of the mediators and mediation meetings.

Mediation Procedure regarding the Reemployment Disputes

Pursuant to Art. 20 of the Labor Code, if the employment contract of the employee is terminated for no reason or due to the absence of just cause, the employee may file a lawsuit for re-employment before the labor courts within one month as of the notification of the termination. The Draft Law provides that the employee shall apply to mediation within this one month period prior to filing a lawsuit. If the parties are unable to reach an agreement with the mediator, the parties may file a lawsuit before the labor courts within two weeks as of the issuance of the final minutes. If a lawsuit is filed without any application for mediation, the lawsuit shall be denied on procedural grounds, as above-stated. In such a case, an application for mediation may be filed within two weeks as of the notification of the final decision as to the denial of the lawsuit.

The labor court is required to terminate the proceeding on re-employment within a two month period. However, an amendment is introduced regarding the procedure before the court of appeal, as the courts of appeal are being established. Accordingly, the court of appeal shall terminate the proceeding within one month if the parties appeal the decision of the labor court.

The parties shall determine the date of re-employment, and the consequences of the refusal to re-employ if they agree on the re-employment of the employee with the mediator. If the re-employment date is not determined by the parties, the employee shall commence to work within one month as of the date of agreement before the mediator without any need for the employee to provide an application. If the consequences of the refusal to reemploy are not determined by the parties, a lawsuit may be filed before the court in order to determine the compensation provided by the law if the employer refuses to re-employ. The employer shall pay compensation in the amount of at least four months’ salary, and a maximum eight-month salary of the employee, as well as compensation in the amount of a maximum four months’ salary of the employee for the period that employee is denied work. If the employee does not commence to work on the agreed date, the termination of the employment contract shall become valid. The above-mentioned rules regarding compensation may not be amended by any agreement with the exception of the agreement before the mediator.

Conclusion

The Draft Law submitted for the opinion of the relevant entities on 23.03.2016 provides the principles for mandatory mediation, as well as the procedures for the establishment, duties, and operation of the labor courts. In accordance with the Draft Law, any claim regarding the employee’s receivables in relation to the individual or collective employment contracts or re-employment of the employee is subject to mandatory mediation prior to any lawsuit. Non-application for mediation prior to the relevant lawsuit shall be considered as a basis for refusal of the lawsuit on procedural grounds. Additionally, the limitation period is suspended from the date of application for mediation until the date of issuance of the final minutes. On the other hand, the Labor Code, Law No. 6325, and Law No. 6356 on Trade Unions and Collective Labor Contracts will also be amended in accordance with the amendments included in the Draft Law. In accordance with these proposed amendments, if the employment contract of the employee is terminated without any reason, or on the absence of just cause, the employee shall apply to mediation within one month as of the termination notice. If the parties are unable to come to an agreement before the mediator, a lawsuit may be filed within two weeks as of the date of issuance of the final minutes.