The Validity of the Release Agreement Concluded in the Course of the Employment Relationship
The quittance constitutes one of the means of the extinction of a debt which allows a debtor to discharge a debt in return for a waiver of the creditor’s rights. Generally, in labor law, release agreements are documents that demonstrate that an employee does not have any claims on an indebted employer. These documents should comply with the conditions listed in Article 420/2 of Turkish Code of Obligations numbered 6098 (“TCO”) in order to be valid.[1]
The Court of Cassation has examined the validity of release agreements drafted while the employment relationship continues. This paper will first give a general outline of this issue by referring to the definition of a release agreement before moving on to a discussion of relevant legislation. , the article will also focus on the decisions of the Court of Cassation regarding the validity of release agreements prepared in the course of the employment relationship.
Definition and Validity Conditions of the Release Agreement
The quittance is a means of terminating a debt. A release agreement is defined as an agreement that fully or partially terminates a debt and thus discharges the debtor from the debt.[2]
Former Code of Obligations Article numbered 818 and Labor Law numbered 4857 contained no specific provisions with regard to release agreements, even though this agreement is frequently used in labor law practice. Until the TCO entered into force, disputes were resolved according to the precedents of the Court of Cassation. With the entry into force of the TCO, Article 132 of the TCO has become the legal basis for release agreements. In addition, Article 420/2 of the TCO has become applicable to labor claims arising from the employment relationship.
According to the Article 420/2 of the TCO, the validity conditions are as follows: a release agreement pertaining to the employee’s receivable from the employer should be in written form, the type and amount of the debt should be clearly indicated, and the payment should be made in full and via bank transfer. In addition, it is required that the release agreement enters into force at least one month after the termination of the employment agreement. A release agreement that does not satisfy these validity conditions shall be deemed null and void.[3]
The Validity of a Release Agreement Concluded in the Course of the Employment Relationship
The question of validity of the release agreements that is frequently used in the employment relationship by the name acquittance, was evaluated in accordance to the “principle of interpreting on behalf of the employee” and a development in particularly in line with the decisions of the Court of Cassation has been observed within the years, especially until the entry into force of TCO.
As per Article 420 of the TCO, a release agreement that is not signed within at least 1 month starting from the termination of the employment agreement shall be deemed void. The indication of a date on release agreements has gained importance since this issue was defined as a validity condition through Article 420 of the TCO. Within this context, the Court of Cassation has examined in many disputes the validity of a release agreement concluded in the course of the employment relationship and has found those kinds of agreements to be invalid.[4]
The Court of Cassation has held that that the release of the employer and the termination of the debt by the employee without having any reason, especially in the absence of full performance, would not be in accordance with the ordinary course of life since the employee who is a party to the employment agreement since the salary and the monetary rights that the employees earn provide the living for them and their families. Release agreements in labor law should be narrowly interpreted due to the importance of labor claims. Therefore, the Court of Cassation considers the performance as the main reason for the termination. Additionally, the Court has also stated that except from the performance of labor claims, quittance should not be accepted as a reason for extinction of debt. For this reason, the Court has held that released agreements which terminate employment agreements should be used sparingly.
In light of these issues, the Court of Cassation General Assembly of Civil Chambers (“General Assembly”), in its recent decision numbered 2016/9-2174 E. 2021/36 K., restated that a release agreement concluded in the course of an employment relationship is void.[5] The General Assembly indicated that an employee is dependent on the employer during the employment relationship. Although job security provisions are applicable, these release agreements are deemed void, based on the assumption that the employee is compelled to sign the release agreement against their will. in order to continue to the employment relationship if the employment agreement is in effect or to receive the labor claims as soon as possible.
Conclusion
The validity conditions of release agreements have been defined by law upon the entry in force of the TCO. The time condition possesses a significance for the acquittances and the release agreements. As per the Article 420/2 of TCO and the precedents of the Court of Cassation, acquittances obtained in the course of employment would be void.
[1] Süzek, Sarper: İş Hukuku, 11. Baskı, 2015 s.797
[2] Eren, Fikret: Borçlar Hukuku Genel Hükümler, 24. Bası, 2019, s.1421
[3] 6098 sayılı Türk Borçlar Kanunu madde 420 (2)
[4] Yargıtay HGK 2018/22-169 E., 2021/872 K., 29.6.2021 T. ( ) ; Yargıtay HGK 2016/9-2174 E., 2021/36 K., 4.2.2021 T. ( ); Yargıtay 9. Hukuk Dairesi 2019/4990 E., 2021/2589 K., 27.1.2021 T. ( ); Yargıtay 22. Hukuk Dairesi 2017/30434 E., 2020/8780 K., 6.7.2020 T. ()
[5] https://lib.kazanci.com.tr/kho3/ibb/files/hgk-2016-9-2174.htm
All rights of this article are reserved. This article may not be used, reproduced, copied, published, distributed, or otherwise disseminated without quotation or Erdem & Erdem Law Firm's written consent. Any content created without citing the resource or Erdem & Erdem Law Firm’s written consent is regularly tracked, and legal action will be taken in case of violation.
Other Contents
Employment relations between the employee and the employer may be terminated for various reasons, as in all other contractual relations. Employment contracts may be terminated through mutual agreement between the parties, as well as through the unilateral termination of...
Today, in many employment contracts, the use of tools such as computers, corporate e-mail accounts, and telephones allocated by the employer is limited and the employer’s right to control them is regulated. The employer bases such a supervise and audit right on the management right regulated under Article 399...
The right to initiate a re-employment lawsuit, is one of the job security provisions, stipulated in favor of the employees, of Labor Law No. 4857 ("Labor Law"). This right, aims to prevent arbitrary termination of the employment contract or termination of the contract without a valid reason by an employer...
The dominant position of the employer due to the nature of the employment relationship, the dependency of the employee, and the obligation to work constitute the basis of the employer's right to manage. The right to manage refers to the right to regulate the conduct of the work and the behavior...
A non-compete covenant prohibits employees from competing on their own or a third party's behalf in the same field of activity as their former employer for a certain period of time after the termination of an employment contract. By the execution of a non-compete covenant...
According to Labor Law No. 4857 (Labor Law), the termination of an employment contract without a valid reason does not automatically invalidate the termination. When an employee opens a re-employment lawsuit pursuant to conditions stipulated in the Labor Law, and if the case...