31October2017

AMENDMENTS TO LAW ON LABOR COURTS

AMENDMENTS TO LAW ON LABOR COURTS

The “Labor Courts Code no 7036” which introduces a mandatory mediation mechanism, and which governs the establishment, jurisdiction, tasks and trial procedures of the labor courts, has been published in the Official Gazette dated 25.10.2017. Article 3 which governs the condition to apply to the mediator under the Code, and Articles 11 and 12 which contain the “abolished provisions”, will enter into force as of 1 January 2018.

Pursuant to the said Code, applying to a mediator at the first stage, shall be sought for as a cause of action in lawsuits to be instituted with a claim for employee/ employer receivables/compensation or re-employment claim, based on personal or collective labor contracts. Matters in dispute for which one must apply to mediation, including any claim for receivables or compensation, should arise from the employment relation. In this kind of cases, in case one directly initiates a lawsuit, the relevant court shall duly dismiss the case due to lack of cause of action.

An employee should first apply to the mediator for claims of notice pay, severance pay, annual leave fees, overtime fees, etc. whereas an employer should first apply to the mediator for matters related to receivables or compensation, before filing the court for a lawsuit. For claims of compensation regarding mutual queries, insult, etc. between the employee and the employer for reasons attributable to the employment relation, or for compensation claims against damage caused by the employee to the company properties or goods of the employer, the matter should first be referred to a mediator before filing lawsuits. The mediator shall be chosen from the list notified to commission chairmanships. Under the present law, an employee is obliged to apply to the Labor Court within one month from the termination date or the termination notice. Under the applications of the new law, the employee is required to apply to the mediator within one month. The mediator must complete his report within three weeks. In case the mediator presents an excuse, he may be granted one additional week. In case of a dispute, the employee must apply to a labor court within 2 weeks following the date of the mediator’s final report.

According to the application of the present law, compensation pays are calculated based on peer employee wages in the company, or of the wage increase that would be applicable when the idle time is also included. With the introduction of the new law, these pays shall be calculated based on the wage applicable at the time when the lawsuit is filed. Mandatory mediation system excludes compensations arising from occupational workplace accidents and occupational sicknesses, as well as declaratory judgment actions, objection actions and recourse actions. Moreover, according to the present law; the employees apply to the Turkish Employment Agency officers under the Ministry of Labor in case of any dispute involving their certain receivables from their employer (such as overdue overtime fees, underpaid or overdue Social Security Agency premiums etc.) during their employment. Under the new law, employees will be able to apply to the Labor Inspectors whom report to the Ministry of Labor.

Similarly, under the new law effective as of 25.10.2017, there will be changes to the time-bar periods. Time bars are amended as 5 years for severance pays, bad faith compensation, compensation arising from termination of employment contract without complying with the notice term, compensation arising from the termination of employment contract without observing the equal treatment principle, and annual leave pays.

Written by Selma Kıy, Posted in Labour Law

About the Author

Selma Kıy

CPA, Managing Partner
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