Turkey: The New Law On Labor Courts Has Entered Into Force With A Ground-Breaking Concept

The long-awaited Law on Labor Courts No. 7036 ("Law No. 7036") was published on October 25, 2017 by the Official Gazette, just after it was introduced to the parliament to be enacted. The Law No. 7036 contains quite a few amendments and brings substantial differences other than what the abrogated Law on Labor Courts No. 5521 ("LLC") stipulated. Mandatory mediation is inarguably one of the attention-grabbing reforms, but is not the mere difference which brings substantial reforms to the employment law in Turkey. 

The rationale behind the rising need of a new law is that, as the preamble of the Law No. 7036 suggests, the necessity to ease the workload of labor courts in Turkey is of paramount importance topic, which needs an immediate solution, considering that more than six hundred thousand labor lawsuits are pending before labor courts of first instance and likewise more than two hundred thousand appealed lawsuits are pending before Court of Appeals as of 2015, which presumably has reached an even more alarming amount as of today. 

Furthermore, the LLC has a history dating back to 1950s, bearing seven amendments but yet seems to be outdated. Some of the articles (e.g. Articles 9 and 10) were no longer applicable whereas some of the procedures it regulates were not compatible with the current Civil Procedure Law No. 6100 ("CPL"), regulating judicial process of labor law litigation.

Having said that, the principal amendment and the key change brought by the Law No. 7036 is the introduction of mandatory mediation. According to Article 3 of the Law No. 7036, in cases of compensation claims raised by employees or employers based on employment agreements or collective bargaining agreements and for re-employment lawsuits, it is mandatory for the parties to submit their case to a mediator before filing a lawsuit before the labor courts. However, it is important to note that, as per Article 3/3 of the Law No. 7036 mandatory mediation does not cover or apply to the pecuniary and non-pecuniary damages that may arise from occupational illnesses and work-related accidents.

The mediator will be appointed either by the office from the list, by the commissions to be formed, or by the parties. The essential duties of the mediator are, informing the parties about meetings and showing the best efforts possible to communicate with parties in order to make them invited, informing the mediation office as soon as the meeting is over, taking meeting minutes at the end of each negotiation session and sending those to the mediation office.

The mediator shall conclude the negotiations within three weeks' period and this duration may extend for one week by the mediator in particular cases.

As per Article 3/12 of the Law No. 7036, if one of the parties does not attend the first meeting of the mediation with presenting no valid excuse, the unattended party will bear the litigation expenses regardless of the lawsuit (if any) is for or against.

If the parties file a lawsuit against each other without applying a mediation procedure beforehand, the court will dismiss the case on the basis of lack of cause of action. Therefore, for instance, if an employee thinks her/his dismissal is unlawful, s/he shall apply the mediator within one month as of the notification date of the termination notice, as per Article 11 of the Law No. 7036, which amends Article 20 of the Labor Law No. 4857. If the parties cannot reach a consensus before the mediator, the employee shall initiate a lawsuit within two weeks as of the last minutes issued by the mediator as per the same article. The parties are entitled to bring local courts' decision under Regional Court of Justice's appellate review, where Regional Court of Justice's decision thereof is final.

Last not but least, the articles covering the mandatory mediation i.e. Article 3, 11 and 12 of the Law No. 7036 will come into force as of January 1, 2018 whereas all other articles of Law No. 7036 have already came into force on October 25, 2017.

Another significant change which came along with the Law No. 7036 is that, as per Additional Article 3, a new article is added to Labor Law No. 4857. By way of this, period of limitation for claims on severance payment, notice payment, bad-faith compensation and compensation for unequal treatment is now 5 years instead of 10 years.

All in all, whilst the fundamental development the Law No. 7036 brings is on the issue of mandatory mediation, many other amendments are implemented, aiming to lessen the workload of the judiciary and clarify their work range.

This article was first published in Legal Insights Quarterly by ELIG, Attorneys-at-Law in December 2017. A link to the full Legal Insight Quarterly may be found here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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