Under What Conditions Is A Release Agreement Signed By An Employee Upon Leaving Work Valid? Can An Employee Who Signed A Release Agreement But Did Not Receive Their Rights File A Lawsuit?
Supreme Court of Appeals of the Republic of Turkey
9th Civil Chamber
Case No.: 2015/7967
Decision No.: 2017/2059
Date of Decision: February 16, 2017
CASE FOR EMPLOYEE CLAIMS – RELEASE AGREEMENT BEARING THE PLAINTIFF’S SIGNATURE – NO DENIAL OF SIGNATURE BY THE PLAINTIFF – NO CIRCUMSTANCES IMPEDING FREE WILL IN THE SPECIFIC CASE – NECESSITY TO DISMISS THE CLAIM REGARDING THE CLAIMS IN THE RELEASE AGREEMENT
SUMMARY: The release agreement submitted to the file by the defendant, bearing the plaintiff’s signature and not denied by the plaintiff, which the plaintiff failed to prove was signed through fraud, threat, or coercion, regarding claims for overtime pay, general holiday pay, and weekly holiday pay, which does not contradict the defendant’s defense, and which was signed after the termination of the employment contract and is valid for all these reasons, the claims for overtime, general holiday, and weekly holiday pay must be dismissed.
(6098 S. K. m. 132, 420) (818 S. K. m. 21, 23, 24, 25, 26, 27, 28, 29, 30, 31) (4857 S. K. m. 19) (YHGK. 21.10.2009 T. 2009/9-396 E. 2009/441 K.) (Y HGK. 27.01.2010 T. 2009/9-586 E. 2010/31 K.) (9th Civil Chamber, October 15, 2010, No. 2008/41165, Decision No. 2010/29240) (9th Civil Chamber, November 5, 2010, No. 2008/37441, Decision No. 2010/31943) (9th Civil Chamber, October 26, 2010, Case No. 2009/27121, Decision No. 2010/30468) (9th Civil Chamber, November 4, 2010, Case No. 2008/37372, Decision No. 2010/31566) (9th Civil Chamber, June 24, 2010, Case No. 2008/33748, Decision No. 2010/20389) (9th Civil Chamber, June 27, 2008, Case No. 2007/23861, Decision No. 2008/17735) (9th Civil Chamber, June 24, 2010, Case No. 2008/33507, Decision No. 2010/20380)
Case: The plaintiff requested a decision ordering the payment of severance pay, notice pay, overtime pay, national holiday and general holiday pay, weekly holiday pay, and leave pay.
The local court decided to partially accept the case.
The case was appealed by the defendant’s lawyer within the judgment period. After hearing the report prepared by the Review Judge for the case file, the file was examined, and the necessary discussions and deliberations were made:
A) Summary of the Plaintiff’s Claim:
The plaintiff’s lawyer claimed that his client worked as an assistant on the defendant’s public buses between 15.04.1999 and 16. 04.2006, and that the employment contract was unfairly terminated by the employer, and requested that the defendant pay the seniority and notice compensation, overtime pay, public holiday pay, weekly holiday pay, and annual leave pay.
B) Summary of the Defendant’s Response:
The defendant’s attorney stated that the plaintiff’s claims did not reflect the truth, that the plaintiff worked for the defendant company between June 25, 2001, and May 31, 2004, that he did not work after that date, that his client was discharged on May 31, 2004, and that it is unjust and legally unfounded to claim that his claims have not been paid based on statements and allegations contrary to the truth despite the discharge, and requested that the case be dismissed.
C) Summary of the Local Court Decision:
Based on the evidence gathered and the expert report, the court partially accepted the case on the grounds that the defendant was unjustified in terminating the employment contract.
D) Appeal:
The defendant’s attorney appealed the decision.
E) Grounds:
1- According to the documents in the file, the evidence gathered, and the legal grounds on which the decision is based, the defendant’s appeals outside the scope of the following paragraphs are unfounded.
2- There is a dispute regarding the validity of the release agreement between the parties.
In Turkish law, release agreements are regulated in the Turkish Code of Obligations No. 6098, which entered into force on July 1, 2012, and Article 132 of the adopted Law states that “Even if the transaction giving rise to the debt is subject to a specific form by law or by the parties, the debt may be wholly or partially extinguished by a release agreement made by the parties without being subject to such form.”
The termination of debt in an employment relationship through release is provided for in Article 420 of the Turkish Code of Obligations No. 6098.
According to the aforementioned provision,
the release agreement regarding the employee’s claim against the employer must be in writing,
at least one month must have passed since the termination of the agreement as of the date of release,
the type and amount of the claim subject to release must be clearly stated,
and the payment must be made in full and through a bank. Release agreements or release statements that do not contain these elements are absolutely void. Release agreements that do not contain the actual amount of the right paid or other payment documents containing the release statement are considered receipts limited to the amount they contain. Even in this case, payments must be made through a bank.
Article 420 of the Turkish Code of Obligations No. 6098 states that release agreements made within one month of the termination of the employment contract shall not be valid. The same article stipulates that release agreements conditional upon the payment of part of the claim (release with consideration) shall only be valid if the payment is made through a bank. Article 19 of the Labor Law No. 4857 stipulates a one-month period for challenging the termination, during which the employee has the right to file a reinstatement lawsuit. At this point, the one-month period following the termination is important in determining whether the employee will return to their old job. Therefore, waiting for one month following termination is also necessary to reduce possible pressure from the employer and to ensure job security. Even in cases of termination based on valid and justified reasons, it is necessary to wait for one month following termination before issuing a release form. Although the one-month waiting period means that the payment of some of the employee’s wages is delayed for one month in terms of partial release, it is fundamentally beneficial to the employee. It should be noted that the one-month waiting period relates to the timing of the release agreement and does not concern performance. In other words, the payment date of the employee’s rights that become due upon termination, such as severance pay, notice pay, and vacation pay, is not postponed for one month.
The requirement in the relevant article of Turkish Code of Obligations No. 6098 that payments to be made by the employer must be made through a bank affects the validity of the release agreement. However, even in payments made through non-bank channels, the debt is extinguished in whole or in part through performance.
The aforementioned legal regulation only imposes restrictions in favor of the employee in cases where the employee is the creditor. In cases where the employer demands a penalty clause and training expenses, in applications related to compensation for damages caused by the employee, and even in cases where the employee owes the employer under the provisions of unjust enrichment, the parties may terminate the employee’s debts through release without being subject to any restrictions.
The provisions of the second and third paragraphs of the aforementioned article apply to all rights arising from the service contract, including compensation and receivables that may be claimed by those deprived of support and other relatives of the employee.
The legal conditions must be met for release agreements drawn up after July 1, 2012, when Turkish Code of Obligations No. 6098 came into force. However, the validity of a release agreement signed during the period when Turkish Code of Obligations No. 6098 was not in force should be assessed within the framework of our Chamber’s principles on the matter. The fact that the release agreement was drawn up within one month following its termination and that payments were not made through a bank does not result in invalidity for release agreements drawn up before July 1, 2012.
The issue of invalidity regarding release agreements made between the employee and the employer prior to the entry into force of the Turkish Code of Obligations for the purpose of terminating the employer’s debts should be evaluated within the framework of the following principles:
a) Within the framework of our Chamber’s established case law, release agreements drawn up while the employment relationship continues are invalid. During this period, the employee is completely dependent on the employer and, despite the provisions on job security, may be compelled to sign a release agreement against their will in order to ensure the continuation of the employment relationship or to obtain certain wages as soon as possible. Our Chamber’s established practice is consistent with this view. (Supreme Court of Appeals, 9th Civil Chamber, October 15, 2010, 2008/41165 E, 2010/29240 K.).
b) If the release agreement does not contain a date and its content does not clearly indicate that it was drawn up after the termination date, the release agreement cannot be considered valid (Supreme Court of Appeals 9th Civil Chamber, November 5, 2010, 2008/37441 E, 2010/31943 K).
c) Whether the release is valid must also be assessed in light of Articles 23-31 of the Debt Law No. 818, which was in force until July 1, 2012, and which regulates vitiation of consent. If one of the parties to the release agreement commits a material error or is subjected to fraud or intimidation by the other party or a third party, there can be no question of a valid release.
On the other hand, the criterion of undue advantage (gabin) referred to in Article 21 of the Turkish Code of Obligations No. 818 must also be evaluated in terms of the validity of release agreements.
Cases of defect of consent in the release agreement must be raised within the one-year limitation period stipulated in Article 31 of the Turkish Code of Obligations No. 818 (Supreme Court of Appeals, 9th Civil Chamber, October 26, 2010, 2009/27121 E, 2010/30468 K). However, for standard release agreements obtained upon starting work, the one-year period does not apply while the employment relationship continues.
d) Since a release agreement is a means of terminating a debt whose existence is undisputed, it is not possible to terminate debts whose existence is doubtful or disputed through release. Therefore, it is inconceivable that a debt which the employee is alleged not to have earned could be subject to release. Release agreements that conflict with the defense and the employer’s other records should be deemed invalid (Supreme Court of Appeals, 9th Civil Chamber, November 4, 2010, Case No. 2008/37372, Decision No. 2010/31566).
e) In release agreements involving amounts, if the claim has been paid in full, the debt is extinguished by performance. However, in cases of partial payment, our Chamber’s established case law does not consider the release valid and accepts that the payment made is considered a receipt (Supreme Court of Appeals 9th Civil Chamber, October 21, 2010, 2008/40992 E, 2010/39123 K.). The fact that a release agreement containing an amount was obtained while working does not eliminate its receipt effect (Supreme Court of Appeals 9th Civil Chamber, June 24, 2010, 2008/33748 E, 2010/20389 K.).
f) In release agreements that do not contain an amount, the issue of validity must be carefully considered. The validity of the release agreement should be examined based on the specific circumstances of the case, and solutions should be sought regarding its validity (Supreme Court of Appeals, 9th Civil Chamber, June 27, 2008, 2007/23861 E, 2008/17735 K.). In a release agreement drawn up after termination, listing the items of receivables one by one, the release intention should be considered valid unless cases of defect in consent are alleged and proven (Supreme Court HGK, October 21, 2009, 2009/396 E, 2009/441 K).
g) Similarly, if the employee includes a reservation in the release stating that they reserve their legal rights, this indicates that there is no intention to release (Supreme Court 9th Civil Chamber, November 4, 2010, 2008/40032 E, 2010/31666 K).
h) With regard to labor claims not included in the release agreement, it cannot be said that the debt has been extinguished. The existence of a contradiction with the defense regarding part of the labor claims included in the release agreement does not render the entire release agreement invalid. The waiver should be considered valid for the parts that do not conflict with the defense (Supreme Court of Appeals, 9th Civil Chamber, June 24, 2010, 2008/33597 E, 2010/20380 K). In other words, in such cases, the waiver can be considered to have a divisible effect. While a release document may be considered a receipt for certain claims, it may be deemed invalid for certain labor rights and claims due to inconsistency. However, for items in the same release document that are not inconsistent and do not involve amounts, the debt may be considered extinguished by release.
The release defense, being an objection that can extinguish the right, may be raised at any stage of the proceedings. (Supreme Court HGK. 27.1.2010, 2009/9-586 E, 2010/31 K.; Supreme Court 9. HD. 13.7.2010, 2008/33764 E, 2010/23201 K.).
In the specific dispute, the release agreement submitted to the file by the defendant, bearing the plaintiff’s signature and not denied by the plaintiff, which the plaintiff could not prove was signed through fraud, threat, or coercion, and which does not contradict the defendant’s defense regarding claims for overtime pay, general holiday pay, and weekly holiday pay, and which, pursuant to the release agreement (release document) signed on 04/06/2004 after the termination of the employment contract and valid for all these reasons, should have been rejected. Therefore, it is erroneous to rule in writing that the release agreement (release document) is invalid based on unfounded reasons.
3- The second dispute between the parties concerns whether the amendment made by the plaintiff was made in accordance with the procedure.
From the file, it is understood that the plaintiff’s attorney amended the case with an amendment petition dated 05/25/2009, increased the amount of the claim in line with the expert report, paid the amendment fee on the same day, and the court ruled taking the amendment into consideration.
The plaintiff’s attorney requested 1,000 TL in severance pay, 1,000 TL in notice pay, 3,000 TL in overtime pay, 1,000 TL in general holiday pay, 1,000 TL in weekly holiday pay, and 1,000 TL in leave pay in the statement of claim. In the amendment petition mentioned above, the plaintiff’s attorney amended the case by stating, “We are amending the case we previously filed for 8,000 TL to 32,000 TL…” without specifying which claim was increased and by how much. It is clear that an amendment made in this manner is not in accordance with the Code of Civil Procedure No. 1086 and the Code of Civil Procedure No. 6100. It is not possible to rule on the claims based on this amendment, which does not specify which claim has been increased and by how much. The court should have given the plaintiff’s attorney time to explain the amendment petition, clearly stating which claim was increased and by how much, and then made a decision based on the outcome. It is erroneous for the court to render a judgment based on this amendment, which was not made in accordance with the proper procedure.
4- Failure to consider that the lack of specification in the judgment as to whether the amounts awarded are “net” or “gross” will create uncertainty in the enforcement of the judgment is also contrary to Article 297 of the Code of Civil Procedure.
F) CONCLUSION:
The appealed decision is REVERSED for the reasons stated above, and the advance appeal fee is to be refunded to the relevant party upon request. This decision was made unanimously on February 16, 2017.