This Legal Alert aims at providing you with an outline on the new procedural rules for labor disputes. Please note that the Law on Labor Courts numbered 7036 dated October 12, 2017 (“LLC”) entered into force on October 25, 2017, the date of its publishing in the Official Gazette numbered 30221.

The main objective of the LLC is to speed up the resolution of employee-employer disputes by introducing an alternative dispute resolution method (i.e. mandatory mediation) and by this means to lessen the workload of the labor courts.

The provisions of the LLC pertaining to mandatory mediation procedures shall enter into force on January 1, 2018. Such provisions of the LLC concerning the mandatory mediation process will not apply to pending lawsuits.

We kindly note that this Legal Alert does not cover the entire provisions of the LLC, but only those that we consider to be currently of importance. No statement herein contains any opinion or professional legal advice.

I. MANDATORY MEDIATION AS A DISPUTE RESOLUTION METHOD

The most important change introduced by the LLC that profoundly effects the judiciary structure of the labor disputes is changing the voluntarily nature of the mediation process into an obligatory system for both parties.

Application to the mediation procedures is now a ‘prerequisite of lawsuits’. This means, if an employee or employer wishes to initiate a lawsuit based on claims of receivables and compensation associated with employment or in case an employee files a reemployment lawsuit, the relevant party must initiate mediation proceedings prior to filing of a lawsuit. Differently put, the court shall reject the lawsuit on procedural grounds without any additional proceedings, if it is clear that the lawsuit was initiated without applying to mediation first. Please note that applying to mediation is not mandatory for material or immaterial compensation lawsuits arising from occupational accidents, diseases and related recourse claims.

Application for the mandatory mediation should be made to the mediation office established in the counterparty’s residential address or to the mediation office having jurisdiction on the region covering the workplace address. After receiving an application from the parties, the mediation office shall appoint a mediator from the list of mediators, who will run the mediation procedures. Of course, the parties may also mutually choose a mediator from the same list of mediators.

In accordance with the LLC, parties may attend to the mediation meetings in person, or be represented through their representatives or lawyers.

The mediator is required to finalize the mediation proceedings within 3 (three) weeks starting from his/her appointment date. Further, he/she can extend this period for 1 (one) more week if he/she deems necessary for the purposes of investigation.

In general, the mediator will end the mediation process in cases where the parties:

• reach an agreement to resolve their disputes; or
• cannot come to an agreement.

Moreover, the mediator may also end the process for various other reasons, such as not being able to contact the parties or not being able to hold a meeting as a result of parties’ non-attendance.

At the end of the mediation process, the mediator writes down the details of the agreement or disagreement to the final mediation minutes. Where the final mediation agreement is issued and signed by the mediator and parties (or their representatives), such final agreement is deemed to have the force of a court verdict.

In case of failing to reach an agreement through the mediation process, the party that intends to file a lawsuit is required to attach the original final mediation minutes or its certified copy (certification is made by the mediator) to the lawsuit petition. The deadline for initiating a lawsuit, for claims other than reemployment is 5 (five) years. The employee who requests to be reemployed must apply to a mediator within 1 (one) month as of the date of the termination notice served by the employer. In case the parties fail to reach an agreement through the mediation process, the employee must initiate a lawsuit before the court within 2 (two) weeks as of the date of issuance of the mediator’s final report on the disagreement of the parties.

If, at the end of the mediation process, the parties agree on reemployment of the employee, then the starting date of the reemployment and the payment amount relating to the wages and other claims accrued for the time of the unemployment must be determined by the parties. In addition to that, amount of compensation must also be determined by the parties, in cases where the employer does not reinstate the employee.

II. AMENDMENTS IN LIMITATION PERIODS

According to the previous applicable legislation, the claims relating to the annual paid leave days, severance payments, notice payments and compensations arising from discrimination between employees were subject to statute of limitation of 10 (ten) years. The LLC amends and determines such limitation period as 5 (five) years.