The Labor Courts Code (the "Code") was published in the Official Gazette on October 25, 2017 and entered into force. The Law abolished the Law No. 5521 on Labor Courts ("Abolished Law") and brought numerous amendments.
What Changes Does the Code Bring?
1. Mediation as a Pre-Condition to a Lawsuit
Starting from January 1, 2018, it is a must to apply to mediation before filing a lawsuit concerning employee or employer receivables and compensation (statutory seniority compensation, notice compensation, overtime pay etc.), and reinstatement claims. The mandatory mediation requirement is, however, not applicable to pecuniary and non-pecuniary compensation lawsuits arising out of workplace accidents or occupational diseases and their related recourse lawsuits. Lawsuits that are filed without its parties first undergoing mediation will be dismissed on procedural grounds due to the lack of cause of action. The mediator must conclude the mediation within three weeks. In case the circumstances so require, this term can be extended for a maximum of one week. If the parties reach a consensus at the end of the mediation, they cannot file a lawsuit regarding the issues agreed to in the mediation meetings. If, on the other hand, the parties cannot reach a consensus at the end of the mediation, the plaintiff can file a lawsuit.
2. Unappealable Decisions and Amendments in Challenging Court Decisions
As a result of these amendments, starting from October 25, 2017, certain court of first instance decisions, for example, decisions on reinstatement lawsuits, cannot be appealed with the Appellate Court; the parties will be able to only challenge these decisions before the Regional Courts of Justice. The eight days' period foreseen in the Abolished Law to challenge court decisions has been abolished, and accordingly, the periods set forth in the Civil Procedural Law no. 6100 will apply in terms of challenging court decisions. Consequently, the period to apply to the Regional Court of Justice will be two weeks and will start to run as of the written communication of the court decision to the parties. The period to apply for an appeal will also be two weeks and will start to run as of the written communication of the Regional Court of Justice's decision to the parties.
3. Statute of Limitations
The Code lowered the statute of limitations for certain receivables from ten years to five years, if they arise out of employment agreement. In this regard, the below statute of limitations of the below items are determined to be five years:
- Annual paid leave,
- Statutory seniority compensation,
- Notice compensation,
- Bad faith compensation, and
- Compensation arising out of termination that does not comply with the equal treatment principle.
The Code introduces a number of significant changes to the labor legislation, such as mandatory mediation, unappealable decisions and lower statute of limitations for certain employee receivables. The changes aim to diminish the workload of labor courts and also the workload of the Appellate Court in relation to labor disputes. Please contact us if you have questions about how these changes might affect your company.