A release is a legal agreement arising from the obligations law and is defined as a reason for the termination of a debt that directly eliminates the receivable and debt. In business life, a release is a document signed by the employee after the termination of the work relation, stating that the employee has no receivables from the employer within the scope of the work relation.

Although the most common area where releases are encountered is labour law, the release takes its source from the Turkish Code of Obligations ("TCO"). Article 420/2 of the TCO regulates the validity conditions of the release: The release agreement regarding the employee's receivables from the employer shall be in writing, at least one month shall have elapsed since the termination of the agreement as of the date of the release, the type and amount of the receivable subject to the release shall be clearly stated, and the payment must be made in full compared to the amount of the right and through a bank. Release agreements or releases that do not have these elements are absolutely null and void.

In our law, the employment relationship shall be terminated by the expiration of a certain period of time, death, agreement of the parties and termination without notice. When the employment agreement is terminated, many receivables such as severance pay, notice pay, overtime pay, week holiday pay, national holiday and general holiday pay, moral compensation may arise. The release agreement may sometimes cover all the receivables, while sometimes it may only be made in terms of a single receivable. If the release agreement covers a part of the labour receivables, a partial release agreement is mentioned. A partial release agreement can be issued for all labour receivables except for non-pecuniary damages; since non-pecuniary damages are indivisible according to the decisions of the Supreme Court, partial release is not possible. 1

If the release agreement contains partial labour receivables, in other means partial release agreement is made, it shall be written for which receivables the release is issued. Because the receivables which are not written in the release will not to any consequences.

Unless otherwise agreed, the release is deemed to be made for the entire debt. Pursuant to the established Supreme Court decisions, it is accepted that the release agreements that do not contain an amount are deemed to be made for the entire debt.2 In release agreements that do not contain an amount, the question of validity should be handled carefully. A control should be made on the issue of the breach of will and solutions should be searched for regarding the validity of the release according to the characteristics of the concrete case. In the release issued after the termination and in which the items of receivables are counted one by one, the release should be deemed valid, unless any defect of will is asserted and proved. 3

The releases issued during the continuation of the employment agreement are null and void in accordance with the Turkish Code of Obligations. In order to issue a release, the Legislator has stipulated that a period of at least one month must have elapsed starting from the termination of the agreement. The reason for the requirement of at least one month is that Article 19 of the Labour Law No. 4857 stipulates a one-month suspensive period for objection to termination. According to this article, the employee has the right to file a re-employment lawsuit within one month following the termination. At this point, the one-month period following the termination is important in terms of determining whether the employee will return to his/her old job. Therefore, it is necessary to minimise the possible pressure of the employer within one month following the termination in order to ensure job security. The one-month waiting period does not mean that the payment of some labour receivables of the employee is delayed for one month in terms of partial release. This period is related to the time of execution of the release agreements and is not a situation concerning the performance. In other words, the payment date of the employee's rights such as severance pay, notice pay and holiday pay, which become due upon termination, is not postponed for one month.4

The releases, which are not contradictory and contain an amount, are considered as receipts up to the amount they contain and are deducted from the labour receivables.5 The payment of the amount contained in the release must be made through the bank. If the amount stated in the release is more than the amount paid to the employee through the bank, the employee may claim the remaining receivable since the release has the effect of a receipt. 6

The parties of the release agreement may make a mental reservation on the issues included in the release. The reservation must be made at the latest when the release is made.7 The mental reservation made after the release is made shall be invalid. The Supreme Court has ruled that if the employee makes a mental reservation in the release signed by the employee in terms of some rights and receivables, the release will not be valid in terms of the receivables for which the employee has made a mental reservation. In other words, the employee will be able to file a lawsuit and make a claim for the issues that he/she made a mental reservation while signing the release.

In the lawsuit for labour receivables filed by the employee after the release is signed, if the employer's defence and the release contradict, the Court shall not rely on the release. However, in the event that the release containing the amount contradicts with the defence, the release will remain valid unless there is an objection to the signature in the release or the misuse of will and will be considered as a receipt and will be deducted from the labour receivables.

The same approach is also in question in case the release contradicts itself. For example, if the content of the release deed includes both the resignation of the employee and the payment of severance and notice pay, then the release deed contradicts itself.8 In this case, the Court will not rely on the release.

In practice, it is frequently encountered in the releases containing the resignation declaration of the employee in the form of "I terminate the employment agreement voluntarily, I have received all my receivables from the employer". The statement of resignation is a party transaction that terminates the employment agreement, and since the release agreement cannot be concluded on the day the employment agreement is terminated, it cannot be said that the release is valid.

Footnotes

1. Gülendam ÖNCÜ, Release Agreement in Labour Law, page 31

2. ÖZCAN/OCAK, Release Agreement, page 7

3. Yargitay 9. H.D. 13.01.2014, E. 2011/51524, K. 2014/50;

4. Yargitay 9. H.D. 15.05.2013, E. 2011/11945, K. 2013/14577

5. GÜNAY, Commentary on Labour Law, 1527

6. SÜZEK, Labour Law, 768

7. ÇIL, Release in Labour Law, 72

8. ÖZCAN/ÖZCAN Labour Lawsuits, 438

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.