Labor disputes are among the most frequently initiated actions in Turkey, yet due to the workload of the labor courts and the number of disputes, these lawsuits almost never finalize in a timely manner. This runs counter to the labor courts’ tendency to favor employees as the weaker party of the relationship with their employers. In this regard, it is safe to say that the primary aim of mandatory mediation in labor lawsuits is to ultimately protect the interests of employees and to provide a safe way to quickly settle their disputes with employers. What is Mandatory Mediation? Prior to a recent amendment to the labor legislation and the enactment of the Law on Labor Courts1 (the “Law”), both parties to an employment relationship were free to directly initiate an action in the labor court in order to settle a dispute arising out of the employment relationship. Recent changes have introduced a mediation process as the mandatory first step. Under the new regime put in place by the Law, the parties must initially apply for mediation before going to labor court to settle a dispute in relation to reinstatement demands or employment receivables or compensation claims arising out of the applicable legislation, employment agreements, and/or collective bargaining agreements. This is considered to be a justiciability requirement, and unless it is met, labor courts must dismiss the case on procedural grounds due to lack of justiciability, as per the Law on Civil Procedure. Under the Law, mediation is not mandatory in lawsuits for pecuniary and moral damages claims arising out of workplace accidents and/ or occupational illnesses, or in disputes for declarative relief, or recourse claims in relation to the same. How to Apply? The party wishing to initiate mediation must apply to the mediation office at the domicile of the counterparty. Mediation offices are commonly located in courthouses. The applicant must provide all information that he/she holds at hand in relation to identifying the counterparty, and if there is any missing information, the mediation office is entitled to search official records in order to obtain such information. The mediation office then appoints a mediator and provides the mediator with the necessary information of the parties, and the mediator sets the date and time of the first meeting and accordingly notifies the parties. At the time of application for mediation, the applicant does not submit a detailed petition in relation to the merits of its request but rather makes a brief reference to its claim. All details in relation to the claim of the applicant are notified to all parties including the mediator during the course of the first meeting. However, in practice, it is noted that this system does not work very efficiently for the parties, as they have to spend the entirety of the first meeting trying to understand the issue at hand. In most cases the parties do not appear in person, but rather make an appearance by counsel. Because counsel is obliged to consult with the client prior to agreeing to settle a case, it becomes quite hard to reach a settlement during the first meeting or to provide a definite answer as to whether there will be a settlement. Thus, the parties usually end up holding a second meeting in order to declare whether they will agree to a settlement. This causes mediation expenses automatically to increase, which is not to the benefit of either party. In this respect, it would be better if claimants were to provide a detailed submission in relation to their requests and that submission be notified to both the mediator and the counterparty in advance. This way, the counterparty would have a chance to review the request beforehand and consult with counsel in their own time, which would allow them to decide whether or not there will be a settlement prior to the first meeting, which would render the process much more time- and cost-efficient. Mandatory Mediation Procedure Duration: Mediators must complete the process within three weeks of the date of their appointment. This period may be extended for one more week at the discretion of the mediator. In this period, the parties may convene as many times as they want in order to reach a settlement. Representation of the Parties: The parties may personally attend the meetings or be represented by counsel or any other representative. If the parties prefer to personally attend the meeting, there is no need for any supporting documentation other than an ID to confirm their identity. However, if the parties prefer to appoint counsel, then counsel must submit a duly issued power of attorney authorizing them to represent the principal in mediation. Finally, if corporate parties choose to be represented by a company representative, then the representative must present a document showing that he or she is authorized to represent and bind the corporate party. Documentation: Regardless of the outcome of the mediation, the mediator keeps minutes of the proceedings and the minutes must be signed by the parties and the mediator. If there is no settlement at the end of the three weeks or during the extension period, this document will be termed the “certificate of disagreement.” The applicant will use this certificate when filing an action in labor court in relation to his/her claim. In addition to the minutes that are prepared and signed at the end of the proceedings, the mediator must prepare a certificate at the end of each meeting to certify that the meeting has been adjourned and have it signed by the parties. Mediation Fees: If the parties reach a settlement in mandatory mediation, the mediation fees (which are determined based on a set table of fees) are borne equally by the parties. The parties may of course deviate from this rule in settlement and allocate the mediation fees on one of the parties. In any case, the mediation fees may not be less than double the hourly fee of the mediator as set out in the applicable table. If the parties fail to reach a settlement in the first mediation meeting, the two-hour fee for the mediator is paid by the Ministry of Justice. In this respect, if the parties come prepared to the first meeting and declare that they will not be settling, they do not have to pay any mediation fee. However, if the decision to refuse settlement is notified in the coming meetings, mediation expenses will automatically accrue even if there is no settlement. The rest of the mediation fees are borne equally by the parties unless otherwise decided. Enforcement of mediation decisions: A settlement agreement may carry enforceable force similar to a court order, either directly or after the approval of a court, depending on whether it has also been approved by counsel. A settlement agreement that has been signed by all parties including the parties’ counsel at the end of mandatory mediation directly carries the power of a court-rendered verdict. Therefore, such a signed settlement agreement may be enforced by the parties as if it were a court decision. If the parties are not represented by counsel in mediation, the parties need to ask the civil court of peace to declare the settlement agreement to be enforceable. Upon the court’s assent, as expressed in an annotation on the settlement agreement, the parties are entitled to enforce the decision of the mediator as if it were a court order. Benefits of Mandatory Mediation Confidentiality: As per the applicable legislation, the parties, including the mediator, must keep any and all information, including the details of a settlement, in confidence. In case the confidentiality obligation is breached by one of the parties, the breaching party may be sentenced to a prison sentence of up to six months if the other party files a complaint to this end. Final Decision: Once the parties reach a settlement through mandatory mediation, the settlement records are sealed and the decision of the parties is final. The parties are no longer entitled to object to the settlement and the applicant may no longer file a lawsuit in relation to its claims that were settled through mediation. For any other claim not covered by the settlement agreement, the parties are free to initiate an action in labor court. Setting a Precedent: In practice, employers usually refrain from settlement through mediation, believing that such a settlement would set a precedent for other employees. However, as noted in the previous section, settlement records are sealed and they are to be kept confidential by all parties. Accordingly, as the parties are prohibited from using these records, mediation outcomes cannot set a precedent for other employees. On the other hand, if disputes are settled through labor courts, any other employee may use the court decision as a precedent for a similar action that he/she initiates against the same employer, as court proceedings and decisions are accessible by all parties. Conclusion Mandatory mediation in labor disputes aims to minimize the volume of labor lawsuits initiated in court and thereby to relieve the workload of labor courts. This process also aims to protect employees, by allowing them to reach to a settlement with their employers without having to go through lengthy and time-consuming court processes. Apart from the fact that the mandatory mediation process is cost- and time-efficient, the fact that the whole process is confidential is reassuring to employers as well, in that mediation settlements do not set precedents for other employees. The idea of mandatory mediation provides benefits to both sides equally and allows them to reconcile in a highly efficient manner.