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NEWS LETTER 2 0 1 0
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Release Agreements in Labor Law
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Debts and receivables are extinguished directly and definitely by
release. While the total amount of the debt is terminated in full release, the
released part of the debt is terminated in case of partial release. Thus, the
debtor is discharged of his or her debt wholly or partially.
The release agreement has an important application in labor law
practice even though it is not set forth by the Labor Law or the Code
of Obligations. The doctrine and jurisprudence of the Court of Appeals
consider the release agreement as an event which terminates the debt.
Although the Court of Appeals does not define the release, it
emphasizes that the release is a document abolishing a right. The relevant
document is issued in different titles such as quittance, acquittance,
certificate of receipt, and release agreement in practice even though it has
the characteristics of another agreement, waiver, settlement agreement,
negative acknowledgement of debt, or receipt of payment.
It is an important oversight that the release agreement is not regulated
by law while its importance is incontestable in labor law. As this agreement
is significant in labor law practice, the precedents form an important source
in this field.
The release agreement is frequently used in labor law practice. It is
generally entitled as quittance and regulated as a document which is signed
unilaterally by the employee and granted to the employer.
The Court of Appeals admits that the employee makes a living for
or her family and himself with the wage earned in exchange for his or
her labor and other pecuniary rights. In this framework, the release of
the employer by his or her employee for no reason cannot be considered
ordinary. The release agreements must be interpreted strictly in labor law,
and performance must be considered as the principal cause of termination
of the debt. Therefore, because the debt is not terminated by performance
in release agreements, the relevant agreements should have a limited value
in labor law.
We should emphasize that the subject matter of the release agreements
concerns the past. A future right does not constitute the subject of release
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Article of November 2010