Upon the termination of the employment contract, the release agreements signed by the employer to release the employee are regulated for the first time by the new Code of Obligations, and it is ruled that the release statement will be deemed invalid if the stipulated conditions are not complied with. The conditions under which a valid release can be mentioned …
Validity Conditions of Release Agreements Concerning the Employee’s Receivables from the Employer
One of the most important innovations introduced by the Code of Obligations No. 6098 is the release agreements between the employee and the employer, which are not regulated in the Labor Law nor in the Code of Obligations No. 818, although there are many examples in practice. In order to fill this gap, Article 420 of the New Turkish Code of Obligations, taking into account the need to protect and observe the employee, has set certain validity conditions for the releases to be made regarding the employee’s receivables from the employer.
In labor law, a release is a document that the employee signs and gives to the employer at the time of leaving the job, stating that he/she has received his/her receivables such as wages, overtime annual wages, vacation pay, notice pay and severance pay and that he/she has no further receivables. In practice, the release is issued under various names such as release document, release deed, release deed, release agreement, but in terms of its content, it sometimes has the characteristics of another contract, waiver, negative debt repudiation or payment receipt.
The Court of Cassation has underlined that, in accordance with the basic principle of labor law protecting the employee, the release deed should be interpreted narrowly and the main reason for the termination of the employer’s debts to the employee should be considered as performance. It is not in accordance with the ordinary course of life for the employee, who is economically weak against the employer, to give up his rights and receivables with a release.
Validity Conditions of the Release Agreement:
The release agreement must be in writing There is no obligation for the release to be written by computer or by hand, or to be made in the presence of a notary public. In order to avoid controversy, it is recommended that it be drawn up in the presence of a notary, but if this is not possible, the release can be filled in or written by the employee.
Another important point is that there should not be a gap between the text of the release and the signature.
In order for the release agreement to be signed, at least 1 month must have elapsed since the termination of the employment contract. For whatever reason, a release cannot be issued before the employment contract is terminated, and the releases issued are deemed invalid.
If the release does not contain a date and it is not clearly understood from its content that it was issued after the termination date, the release cannot be valued.
While the release is only valid for the receivables arising in the past, it does not cover the employee rights that may arise in the future and does not apply to them.
An important detail is that the 1-month waiting period in question is only related to the time of issuance of the release agreement and does not concern the performance. It is not possible to postpone the payment of the employee’s rights such as severance pay and vacation pay, which become due upon termination, for a period of 1 month.
Regarding the one-month period to be waited for the release, the Court of Cassation emphasized that Article 19 of the Labor Law No. 4857 stipulates a one-month period in terms of objection to termination and that the employee has the right to file a reinstatement lawsuit within this period, and emphasized that this period is necessary to reduce the possible pressure of the employer and to provide job security.
The nature and amount of the labor receivables such as overtime wages, annual paid leave, notice pay, overtime wages released by the employee, annual paid leave, notice pay, severance pay, severance pay related to seniority, etc. should be written separately, clearly and comprehensibly in the content of the release in a way that does not cause any hesitation. The working hours should be specified in the content of the release and the monetary social benefits given to the employee should also be regulated.
In a situation that may lead to the invalidity of the release, the release signed by the employee who voluntarily terminated the employment contract, i.e. resigned, should include statements such as “I have received my severance and notice pay receivables”. This situation, which is accepted as a contradiction in practice and in the jurisprudence of the Court of Cassation, causes the release deed to be invalid.
The payment must be complete compared to the right amount. It cannot be said that the debt has ended in terms of labor receivables that are not included in the release. In cases of partial payment, it is accepted by the Court of Cassation that the release document has the effect of a receipt.
Article no. 6098 of the Turkish Code of Obligations stipulates that the payments to be made by the employer must be made through a bank, which has an effect on the validity of the release. However, in payments made by non-bank means, the debt is terminated through full or partial performance instead of release.
At this point, Prof. Dr. Sarper SÜZEK stated that it is not possible to reconcile the regulation of this condition with the concept of release and that the termination of the employer’s debt to the employee through release has been made technically impossible and that the legislator has confused the institutions of release and performance. In the event that the employee’s receivable from the employer is paid in full, the debt ends with the payment, i.e. performance, not with a release. He underlined that the invalidity of the release deed has no practical value if it is proved by other written evidence that it has been paid in full, even if it has not been paid through the bank.
As a result, release agreements or releases that do not meet these validity conditions are absolutely null and void, and if the payment is made through the bank and subsequently released, the part up to the amount of payment will be considered as a receipt and the release will be deemed invalid.
Workers and Employers! The Release You Have Issued May Not Be Valid According to the New Code of Obligations!
One of the most important disputes between the employee and the employer is the determination of whether the rights and receivables earned by the employee following the termination of the Service Contract have been paid. At this point, the release, which shows the payment, is a very important document in terms of proof before both the employee and the employer.
In its broadest and briefest definition, a release means “a document of acquittal”. A release within the scope of Labor Law, on the other hand, is a document indicating that the employee has received all kinds of rights and receivables within the scope of both Labor Law and the Service Contract when leaving the job, and as a rule, it is issued following the termination of the Service Contract.
Although release agreements were regulated in Article 115 of the Swiss Civil Code, there was no regulation in the Code of Obligations No. 818 (abrogated) and the Labor Law No. 4857. Therefore, the courts used to decide in line with the case law of the Court of Cassation. For example, according to the established jurisprudence of the Court of Cassation, releases received while the employment relationship continues are invalid. This is because the employee lives on the wages earned in return for the sweat of his/her brow, and the fact that the employee has signed a release before the employment relationship between the employee and the employer has ended, in other words, for the receivables that he/she has not yet earned (not yet born), is not only contrary to the general rules of law, but also completely contrary to the ordinary flow of life and the rules of equity.
Due to the fact that the release deed is not clearly regulated in the law, in practice, many misinformation has been spread by word of mouth as if it were true and has been applied erroneously and unfortunately it is still being applied. These wrong and erroneous practices sometimes cause damages to workers and sometimes to employers.
This deficiency in the law has been eliminated by Article 420 of the Turkish Code of Obligations No. 6098, which entered into force on July 1, 2012, and in fact, in line with the jurisprudence of the Court of Cassation, the issues that have been in practice for years almost as a verbal rule have been put into writing and brought into an article of law.
So, according to the new regulation, which issues should employees and employers pay attention to in the release?
The release must be in writing
There must be a period of at least 1 month between the date of termination of the Service Contract and the date of release
In the release, the type of receivables subject to release (severance pay, notice pay, wage receivable, overtime pay, annual leave pay receivable, etc.) should be written one by one and together with their values
Payments must be made through bank channel
Article 420 of the Turkish Code of Obligations, which regulates the validity conditions of the release deed, clearly and unequivocally states that the release deed will be null and void if it does not meet these conditions. However, it is important to note at this point that in cases of partial payment, both the established case law of the Court of Cassation and Article 420, the payment made to the employee is accepted as a receipt. However, even here, the payment must be made through a bank channel.
On the other hand, the 1-month waiting period mentioned above is related to the date of issuance of the release and does not stop the performance. Therefore, the employer does not have to wait for the 1-month period to pay the employee.
One of the points to be noted is that the validity of the release deed shall be interpreted according to the legislation in force on the date of its issuance. Since the aforementioned provision of Article 420 entered into force on 01.07.2012, it will be applicable for the releases issued after 01.07.2012. In other words, the question of the validity of the releases issued before 01.07.2012 will be evaluated and resolved in the light of the case law of the Court of Cassation as mentioned above.
In conclusion; we recommend that the above-mentioned issues should be paid attention to in the preparation of the “release”, which is one of the most frequently heard words in the relationship between the employee and the employer in working life and which is mostly prepared by us, the members of the profession, in order to avoid a legal mistake in practice.
