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Release agreements in labour lawis a document that directly affects the employee’s rights of action and claim. Upon termination of the employment relationship between employee and employer, there are documents or agreements drawn up by the employer unilaterally or by mutual agreement and subsequently presented to the employee for signature. In working life, these documents usually come before us as release deeds. In Turkish law, the institution of release first acquired a statutory basis with Law No. 6098, which entered into force on 01.07.2012.
Currency note
This article was prepared in accordance with the legislation and practice in force on the date of publication. Some of the Court of Cassation decisions quoted in the article refer to provisions of a procedural law that was subsequently repealed and to the former currency; the provisions on payment of wages through banks and the case law on release deeds may also have changed since publication. You are advised to consult a lawyer on the current position.
The principal and most important purpose of a release is to extinguish the employee’s right of action and claim. The release deed, which was shaped by Court of Cassation case law before the Turkish Code of Obligations, has become subject to very strict formal requirements under that Code.
Main view of the article
The formal requirement that attracts our attention most is full payment of the debt. Where the debt is paid in full, the legal transaction is not release but performance. The legislature has clearly confused the institutions of performance and release, causing release to lose its legal meaning.
The fundamental purpose of the provisions in the field of labour law can be expressed as the protection of the weaker employee against the stronger employer, who has the power to provide work and owns the capital. In connection with the social state principle in the Constitution, the state has also intervened in the employee-employer relationship through legislation and has sought to ensure balance between employee and employer. This framework begins with the employment contract concluded between employee and employer, and the termination of that employment contract for any reason does not completely extinguish the legal relations between the parties. In this case, their relationship will acquire a new legal dimension in which new rights and obligations begin.
However, disputes in working life begin after the end of the employee-employer relationship. The reason for this is that, while the employment relationship continues, the employee, as the weaker party, is concerned about becoming unemployed and the like. Once the relationship between the parties ends, if the employee has not received the receivables to which they are entitled, the employer’s concern about facing legal proceedings begins.
After the contractual relationship has ended, there are documents drawn up jointly by the parties to the employment contract or drawn up by the employer and presented to the employee for signature. In practice, these documents are usually called release deeds.
A release deedis an agreement that extinguishes all or part of a debt without it being performed.
In a release deed, also called a debt release agreement, an express declaration of will by the debtor is not required; tacit acceptance is sufficient for the agreement to be concluded. The legal nature of the release deed, which in labour law appears in particular as the employee releasing the employer from a debt, relates to the creditor releasing the debtor from the debt as a disposition resulting from an agreement between creditor and debtor.
The release agreement, which bars the employee’s rights to sue and to make claims, has been made subject to very strict formal and validity requirements in law. In order to speak of a release agreement that has valid legal effect, it is possible to refer, in addition to the validity and formal requirements developed to date through the case law of the Court of Cassation, to the validity and formal requirements that acquired a statutory basis through the provisions introduced by Turkish Code of Obligations No. 6098, which entered into force on 01/07/2012.
In this study, we will examine the legal nature and types of the release agreement, which is frequently used in the field of labour law in particular and frequently comes before the courts, the institutions similar to it, the place of the release agreement in labour law within the framework of Law No. 6098 in the light of the Court of Cassation case law developed over a long period, and the legal consequences of the new provisions.
Concluded between the debtor and the creditor and enabling the creditor to release the debtor from the debt ibra in legal terminology.[1]
The creditor may extinguish the debt by discharging the debtor from it without having received the receivable. This is because a release agreement is not an agreement as to payment but one of the ways in which a debt is extinguished.[2] Before 01/07/2012, the release agreement was regulated neither in the repealed Code of Obligations No. 818 nor in the labour legislation. The definition, legal nature, validity conditions and consequences of the release deed were governed by the principles established by Court of Cassation case law.
The release deed, which entered Turkish law for the first time with Turkish Code of Obligations No. 6098, acquired a statutory basis through Articles 132 and 420 of that Code. Under Article 132 of the Turkish Code of Obligations, “Even if the transaction giving rise to the debt is subject to a particular form by law or by the parties, the debt may be extinguished in whole or in part by a release agreement made by the parties without being subject to any form.”; it can thus be seen that release extinguishes the debt.[3]
Before Law No. 6098 entered into force, there were many conflicts among court decisions concerning release. In the period before the enactment of the Turkish Code of Obligations, with regard to the release agreement, which had no statutory basis, attention was drawn to the following points: that a release agreement stating an amount has the nature of a receipt[4], that it bears the claimant’s signature[5], that the release agreement is drawn up after termination[6], that notice pay and severance pay have been paid in full and that it is stated that no other receivable remains in respect of these matters[7] .
Before 01/07/2012, during the period of Code of Obligations No. 818, release agreements drawn up before the termination of the employment contract were regarded as invalid both in the decisions of the Court of Cassation and in labour law doctrine. In that period, release agreements drawn up on commencing employment or during the course of employment likewise had no legal effect.[8] In actual working life, release agreements also had disadvantages for the employee as the weaker party. One of these, as we have just mentioned, was release agreements obtained from employees through pressure, as if they were a requirement for continued employment, either at the start of the employment contract or while it was ongoing. However, this did not accord with the spirit of the release agreement as regulated in the Swiss Code of Obligations. What matters is the acceptance given by the employee, freed from pressure, of his or her own free will following the end of the employment contract.[9]
Release is a legal institution that extinguishes an individual debt. By contrast, release does not terminate the obligational relationship. The debt is not extinguished automatically by release. The parties must also carry out other transactions between themselves to extinguish this debt. It is an agreement whereby the creditor and the debtor of the debt to be extinguished carry out a legal transaction concerning the extinguishment of the debt.
In the period before Turkish Code of Obligations No. 6098, the release deed appeared as a written text serving as one of the means of proving that the employee’s severance pay, notice pay, wages and other employment receivables had been paid.[10] Although the Court of Cassation has generally described such contracts as release agreements, as we shall examine below, such documents may in fact sometimes take the form of a receipt, a negative acknowledgement of debt, an undertaking not to claim a receivable, or a settlement.[11]
The following findings on the legal nature of release stand out in the text:
Release, which in practice usually appears as a document bearing the signature of the creditor, that is, the employee, is according to Court of Cassation decisions and the prevailing view in doctrine a legal transaction in the nature of a contract. In its decisions, the Court of Cassation characterises it as a contract that results in the creditor waiving the right to the receivable and, consequently, the debtor, that is, the employer, being discharged from the debt. Owing to this case law and these views, release depends first and foremost on mutual agreement between both parties.[12] Under the general provisions of the Law of Obligations, it is not possible to speak of a release deed that does not bear the employee’s signature.
However, the absence of the signature of the employer, who is the debtor, does not mean that the employer is not a party to the agreement. Of course, although the institution of release appears to favour the debtor employer, it cannot become valid with the approval of the employee, the creditor party, alone. If the employer does not accept the release, the release will have no legal value and the debtor’s debt will continue. There is no question of the creditor unilaterally waiving the right to the receivable. However, even if the debtor party does not expressly accept it, they may give consent or ratification tacitly. In practice, where the employer relies on the release, submits it to the court and so on, this shows that the employer has tacitly accepted it.[13]
Dispositive transactions, which are among the legal transactions in the law of obligations, are considered together with obligatory transactions in the classification of legal transactions according to their effects, and are defined as transactions that terminate or alter a right forming part of the assets of an estate by directly affecting it. Since release extinguishes or reduces the creditor’s receivable, which is his or her right, it is treated in legal scholarship and doctrine as a dispositive transaction.[14] As a result of the release, the creditor disposes of the right forming part of the assets of his or her estate by relinquishing it. According to the decisions of the Court of Cassation as well, release is accepted as a dispositive transaction that extinguishes the rights that have arisen up to the moment the release is made and binds the releasing party.[15]
A transaction conferring a benefit (kazandırıcı işlem) has been considered among the causes of debts arising from legal transactions and has been characterised as one person providing an asset value for the benefit of another.[16] In a release, too, there is a decrease in the assets of the employee as creditor and an increase in the assets of the employer as debtor. For the employer, the increase is a decrease in liabilities. Therefore, release is a legal transaction conferring a benefit.[17] Release, too, must have a legal cause, which is a feature of every transaction conferring a benefit. This cause may be a gift, a cause of performance or acquisition. The reason why release rests on one of these legal causes is that it is not a legal transaction that extinguishes a specific debt.[18]
Under the law of obligations, legal transactions are divided into two categories according to whether or not they depend on a cause: causal legal transactions and abstract legal transactions. Legal transactions in which the legal cause of the benefit is a constituent element of the legal transaction or forms part of its content are causal legal transactions. In such legal transactions, the legal cause becomes part of the legal transaction, and where there is no legal cause or it is legally invalid, the principal legal transaction dependent on it will also be invalid.[19] In Turkish law, legal transactions are generally made on the basis of a cause. Release, too, is validly formed in law by the parties agreeing within the framework of a cause and on the basis of that cause. For this reason, although according to some authors[20] it is argued that it is abstract, in our view release is a causal legal transaction.
By type, release is divided into two: release for consideration and release without consideration.
Release for consideration
Where the release agreement is made in return for a price or a performance, it is called a release agreement for consideration.
Gratuitous release
Gratuitous release, on the other hand, is a release agreement in which the creditor party waives their receivable without expecting anything in return, made without any counter-performance.
Where the entire debt is paid or a performance is made covering it in full, the transaction cannot be called a release. In this case, what we have is not release but performance. This release agreement given to the other party will take the place of performance.[21]
Waiver as regulated in the Code of Civil Procedure (HMK) must not be confused with gratuitous release. Waiver is not a legal transaction that affects the claimability and actionability of a right and extinguishes the debt.[22]
In a release for consideration, the consideration may be money or a benefit other than money. A release without consideration may be accepted as being in the nature of a gift, so long as it is not confused with waiver. In line with the matters discussed, the points to be borne in mind here are that, in a release for consideration, both parties to the contract must have legal capacity, whereas in a release without consideration it is sufficient for the creditor to have legal capacity. Moreover, since under the general provisions of the law of obligations a gift must be made in writing, a release without consideration, being in the nature of a gift, must also be made in writing.[23]
Comparison of release for consideration and gratuitous release
| Release for consideration | Gratuitous release | |
|---|---|---|
| Consideration | In return for a price or a performance; the consideration may be money or a benefit other than money | Without expecting anything in return, without any counter-performance |
| Nature | Where the performance covers the entire debt, it is performance rather than release | It may be regarded as being in the nature of a gift |
| Ehliyet | Both parties to the agreement must have capacity | It is sufficient for the creditor party to have capacity |
| Form | — | It must be made in writing |
By scope, release takes the form of full release and partial release.
Partial release
Partial release is the creditor party’s waiver of part of their receivable, either for consideration or gratuitously.
Tam ibra
Where the entire debt is waived and the debtor is released from the whole of the debt, this is referred to as full release.
In the case of full release, a disposition arises. Where release is involved, it is not necessarily the case that the creditor will release the debtor from the entire debt. This depends on the creditor’s free will and on mutual agreement.[24]
Legal transactions that result in the creditor, and in particular the employee, waiving employee receivables, and which appear under different names, differ from one another in terms of legal nature. Institutions such as the agreement to terminate (ikale), concordat (konkordato), the settlement agreement, the negative acknowledgement of debt and the undertaking not to claim a receivable resemble release.
In the termination agreement (ikale), which is the most similar to and most often confused with the release agreement, the parties mutually agree on the termination of the obligational relationship between them and completely extinguish that relationship by means of a new agreement.[25] Whereas a release agreement extinguishes only individual debts, an agreement to terminate extinguishes the obligational relationship in whole or in part.[26]
The institution of concordat, regulated in enforcement and bankruptcy law, takes place where the creditors of a debtor who is in difficulty in paying debts accept it in the proportion specified in the relevant law, subject to approval by the competent authority also specified in the relevant law; following the approval of that competent authority, the debtor is released from part of his or her debts to the creditors. In addition to being released from part of the debts, the debtor also gains time by virtue of this institution. Concordat may be effected in court or out of court; where it is effected out of court, it may take the form of a release agreement.[27]
In a settlement agreement, which is subject to the provisions of the Turkish Code of Obligations on fully bilateral contracts, the parties make concessions from their respective interests in order to bring an end to a dispute or disagreement concerning the legal relationship between them. Since mutual concessions are required, if no obligation is imposed on one party, the agreement is not a settlement agreement but a release, a gift, an acknowledgement of debt or a waiver of a right.
The fundamental difference between a settlement agreement and release is that in release the debt waived is individual, that is, specific. In a settlement agreement, by contrast, the doubt required is subjective. Another difference is that the subject matter of a settlement agreement is not very broad compared with release. The subject of a settlement may be a dispute or the removal of an uncertainty. In this case, a settlement does not always have the purpose of extinguishing a debt. A settlement may be declaratory in nature, may give rise to new provisions, may alter the legal relationship or may even terminate it. Furthermore, as in release, it must always involve a disposition.[28]
By a negative acknowledgement of debt, the parties to the contract establish that no receivable exists. Whereas a negative acknowledgement of debt concerns the extinguishment of one or more doubtful or disputed receivables between the parties, release concerns the extinguishment of an individual receivable, that is, a certain receivable which the parties do not doubt. The difference between a negative acknowledgement of debt and release is that a negative acknowledgement of debt is a contract arising from declarations of intent that no obligational relationship or debt exists.[29]
The creditor may, without waiving all or part of the receivable and without discharging the debtor from the debt, merely forgo pursuing it. Where the creditor gives such an undertaking to the debtor, the debt is not extinguished by this undertaking, and the ancillary rights attached to the principal debt also remain valid. As in release, there is a contractual relationship in the undertaking not to claim a receivable, but the legal position is entirely different from that of release.[30]
By release, the creditor waives the debt and the debt is extinguished. The undertaking not to claim a receivable, unlike release, is not a dispositive transaction and does not extinguish the debt; it merely imposes a negative performance on the creditor. Unlike release, this is not a matter that the judge will take into account of his or her own motion. Since the undertaking not to claim a receivable does not extinguish the debtor’s debt, it gives the debtor only a plea (def’i). However, owing to a debt extinguished by a release between the parties, the judge must take this into account of his or her own motion, and this grants the debtor a right of objection.[31]
Key differences between release and similar institutions
| Kurum | Fundamental difference from release |
|---|---|
| Termination agreement (ikale) | Release extinguishes only individual debts; a termination agreement (ikale) extinguishes the obligational relationship. |
| Concordat (Konkordato) | It is regulated in enforcement and bankruptcy law and requires the approval of the competent authority; where made outside court, it may take the form of a release agreement. |
| Settlement agreement | Mutual concessions are required; a settlement does not always have the purpose of extinguishing a debt. |
| Negative acknowledgement of debt | It concerns doubtful or disputed receivables; in release, an undisputed, definite receivable is extinguished. |
| Undertaking not to claim the receivable | It is not a disposition and does not extinguish the debt; it merely gives the debtor a defence (def’i). |
The institution of release, which definitively extinguishes the debt between creditor and debtor, is regulated in Article 115 of the Swiss Code of Obligations. By contrast, in Turkish law it was regulated neither in employment legislation nor in Law No. 818.[32] Turkish Code of Obligations No. 6098 likewise does not define the institution of release or specify its elements. For this reason, release in labour law has been defined by Court of Cassation case law and shaped accordingly.
First of all, it should be noted that in labour law no significant distinction has been drawn between “release” and “waiver”, or between a “release deed” and a “deed of waiver”; the two institutions have been treated as if they were identical. “In the decisions of the 9th Civil Chamber of the Court of Cassation, release and waiver have mostly been considered together, and where the word ‘waiver’ is additionally used in the release deed, this has been accepted as a circumstance strengthening the validity of the release deed.”[33] is the wording of the decision. However, whereas a release agreement is made between the employee, as creditor, and the employer, as debtor, and must bear mutual signatures, a waiver is a unilateral disposition that does not require the acceptance or participation of the other party.[34]
According to the settled case law of the Court of Cassation, the following principles govern the validity of a release:
A release agreement will not be regarded as valid if it is made while the employment relationship is continuing. According to the case law, for as long as the employment relationship continues, the employee is in a position of complete dependence on the employer. It is considered possible that the employee may be inclined to sign a release agreement against his or her will in order to obtain certain employee receivables as soon as possible or to secure the continuation of the employment relationship despite job security.[35] Where the release agreement bears no date and it cannot be clearly understood from its content that it was drawn up after the end of the employment relationship, it is not possible to speak of a valid release agreement.[36]
The contract drawn up between employer and employee may not specify the amount of the release or the method of payment. In release agreements that do not state an amount, the question of validity should be examined in more detail than in release agreements that state an amount; in particular, cases of defective consent should be scrutinised and solutions as to the validity of the release agreement should be sought according to the particular features of the specific case.[37] Just as release agreements containing an amount will be invalid if made while the employment relationship continues, the same applies to release agreements in which no amount is stated.
According to the 9th Civil Chamber of the Court of Cassation, “during this period the employee is wholly dependent on the employer and, despite the job security provisions, must be deemed to have been led to sign a release agreement against their will in order to ensure the continuation of the employment relationship or to obtain some of their employment receivables as soon as possible …”. The High Court, which deems the agreement valid where the amount of the release agreement is not stated, considers that in this case it must additionally be examined whether there are any defects of consent, whether it was made while the employment relationship continued, or whether there are contradictions on these matters.[38]
The Assembly of Civil Chambers, in a release agreement accompanied by payment documents, did not treat the amount in the payment document as a release deed but assessed it as having the effect of a receipt. In addition, records in which no amount is stated and which state that no receivable remains will have the effect of a release deed:”
“…It is seen from the payment document in the file that payments of severance pay and leave pay were made with their amounts specified. Since the release deed drawn up in respect of these two items of receivable has the effect of a receipt, it must be accepted that the balance of the receivable may be claimed. …In the release deed, whose signature is admitted and which could not be proven to have been obtained by duress or deceit, the claimant states that “”he has fully received all severance pay, overtime, weekly rest day, public holiday and paid annual leave entitlements that arose and accrued up to the date of leaving employment””. By the release deed, the claimant fully released the defendant in respect of the items of receivable for which there is no payment document (other than severance pay and leave pay), declared that he had no receivable without making any reservation, and signed it. … in the specific dispute it cannot be said that the release deed is contradictory. … For these reasons, whereas it should have been decided, by giving credit to the release deed, to dismiss the claims for payment in respect of overtime pay, public holiday and general holiday pay and the daily five per cent surcharge on those claims, persisting in the previous decision is contrary to procedure and law.”
Court of Cassation Assembly of Civil Chambers 29.03.2006, 2006/9-82 E. 2006/118 K. [39]
Where the defence submitted by the employer contradicts the other records, the release agreement will be deemed invalid. According to a decision of the Court of Cassation Assembly of Civil Chambers:
“…The direct and definitive extinguishing effect of release on the receivable and the debt applies to release deeds whose signature is admitted, which are alleged but not proven to have been obtained by duress or deceit, and which do not contradict the particular features of the specific dispute. The claimant worked at the defendant’s workplace between the stated dates and signed a release deed following the termination of the employment contract by the employer on 31.01.2002. Although the release deed states that employment rights and receivables such as overtime pay, severance pay and notice pay were paid in full, the payment document dated 05.02.2002 submitted to the file does not include overtime pay and shows that only severance pay, notice pay and leave pay were paid to the claimant. Furthermore, although the defendant employer stated that the claimant had no overtime and wage receivable, since the release deed contains a statement that overtime pay was also paid, a contradiction has arisen between the release deed and the defence. No value can be attributed to a release deed that contradicts the defence. These points were also set out in the Decision of the Assembly of Civil Chambers dated 19.09.2007, No. 2007/9-645-596. For the reasons stated, the local court’s reasoning for persisting, to the effect that the release deed is invalid in respect of the said item of receivable, is justified…”
Decision of the Court of Cassation Assembly of Civil Chambers [40]
The court ruled that the release agreement had no legal validity because the overtime pay referred to in the release agreement did not appear in the payment document and, moreover, since the employer stated in its defence that overtime had been paid, there was a contradiction between the release agreement and the defence.
Release agreements that preclude the institution of reinstatement provided for in the Labour Law are invalid. In respect of a workplace where an action for reinstatement may be brought, the High Court
“… The provisions on job security relate to public order, and no value can be attributed to transactions that eliminate the right to bring an action for reinstatement under those provisions. In other words, it is not possible to waive an action for reinstatement in advance. On the other hand, a release deed is a legal transaction that extinguishes a debt without it being performed in whole or in part. The fact that the employee has signed a release deed concerning employment receivables does not prevent them from bringing an action for reinstatement. Moreover, in the specific case the claimant employee signed the release deed with the reservation that their rights of action were preserved.”
Court of Cassation 9th Civil Chamber 03.06.2008, 2007/37496 E. 2008/13783 K. [41]
held as above. However, the High Court considers it acceptable to waive an action for reinstatement after it has been brought, while it is pending or at the appeal stage:
“ “… Under Article 95 of the Code of Civil Procedure (HUMK), waiver is a procedural act that concludes the action. An action may be waived until the decision becomes final. It is understood that the power of attorney of the waiving counsel expressly includes the authority to waive the action. The action had to be dismissed on account of the waiver.”
Court of Cassation 9th Civil Chamber 25.12.2006, 2006/27096 E. 2006/3363 K. [42]
Debts whose existence is disputed cannot be extinguished by a release agreement. In principle, a release agreement extinguishes a debt whose existence is undisputed. For this reason, a receivable to which the employee has not become entitled cannot be the subject of a release agreement.[43]
For employment receivables other than pecuniary and non-pecuniary damages, the High Court accepts release agreements that contain an amount as being in the nature of a receipt:
““… The claimant requested an order for payment of severance pay, notice pay and paid annual leave pay. The local court partially upheld the claim. …. According to the settled practice of our Chamber, release deeds relating to severance pay, notice pay and other employment rights which are drawn up by expressly showing these receivables one by one and which are not proven otherwise are deemed valid. In the release deed dated 11.6.2003 in the file, the claimant acknowledged having received the amount determined as notice pay and severance pay. Although, in the absence of any other document, information or evidence, the claims for severance pay and notice pay would have to be dismissed on the basis of this release deed, as also accepted by the court, according to the defendant’s admission during the inspection by the Regional Labour Inspector, the amount paid to the claimant for these receivables is TRY 700,000,000. In view of this admission by the defendant, the said release deed should be accepted as being in the nature of a receipt, this amount should be set off against the claimant’s receivables and collection of the balance should be ordered. Awarding the entire severance pay and notice pay as set out in writing is erroneous.”
Court of Cassation 9th Civil Chamber 11 .11.2004, 2004/9972 E. 2004/25680 K. [44]
Whether the balance of the receivable remaining outside the part stated as an amount in the release agreement may subsequently be claimed is addressed in the High Court’s decisions:
“At the end of the proceedings in the “employee receivables” action between the parties, upon the request by the defendant’s counsel for review of the decision of the Ankara 3rd Labour Court dated 13.02.2007, E. 2006/623 – K. 2007/123, upholding the action, the decision was reversed by the judgment of the 9th Civil Chamber of the Court of Cassation dated 13.12.2007, E. 2007/9241, K. 2007/37924, on the grounds that ( … 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 other than those within the scope of the paragraph below are unfounded. 2. In the release deed signed on 12.11.2004, the date of termination of the service contract, the claimant expressly declared, without reservation, that the paid annual leave receivable had been paid, that he would therefore make no claim, and that he waived all rights of action. On account of the release deed and waiver, it is erroneous to uphold the said paid annual leave receivable instead of dismissing it… ), and the file was returned; at the end of the retrial, the court persisted in its previous decision. After examination by the Assembly of Civil Chambers, it was established that the decision to persist had been appealed in time and, the documents in the file having been read, the matter was deliberated: DECISION: In view of the parties’ mutual claims and defences, the records and evidence in the file, the grounds set out in the reversal decision and, in particular, the fact that the same principle was also accepted in the Assembly of Civil Chambers’ judgments dated 06.04.1994, E. 1993/9-958 – K. 1994/199, 04.04.2001, E. 2001/9-321 – K. 2001/325, 29.03.2006, E. 2006/9-82 – K. 2006/118, and 04.10.2006, E. 2006/9-582 – K. 2006/625, whereas the Special Chamber’s reversal decision, which is also adopted by the Assembly of Civil Chambers, should have been complied with, persisting in the previous decision is contrary to procedure and law. The decision to persist must therefore be reversed.”
Court of Cassation Assembly of Civil Chambers 22.10.2008, 2008/9-639 E. 2008/653 K. [45]
Before Turkish Code of Obligations No. 6098, the validity conditions of release were determined by the case law of the Court of Cassation. Proceeding in particular from the protective purpose of labour law towards the employee, the Court produced case law consistent with the general principles of law. The validity criteria laid down in the new Turkish Code of Obligations also coincide almost entirely with the case law of the Court of Cassation. As of 01.07.2012, the case law of the Court of Cassation has given way to statutory validity requirements.[46] It is regulated in Article 420 of the relevant Code.
Since, under the new regulation, it is contained in the Turkish Code of Obligations, which is of a general nature in relation to the labour legislation, it will apply to all persons subject to the provisions on employment contracts of Press Labour Law No. 5953, Maritime Labour Law No. 854 and Labour Law No. 4857. Accordingly, Article 420 of the Turkish Code of Obligations, which is a mandatory provision, will apply to release agreements concerning employees’ receivables from employers.[47]
Article 420 of the Turkish Code of Obligations No. 6098, “Penalty Clause and Release”:
“A penalty clause inserted into service contracts solely to the detriment of the employee is invalid. A release agreement relating to the employee’s receivables from the employer must be in writing; at least one month must have elapsed from the termination of the contract as of the date of release; the type and amount of the receivable subject to release must be clearly stated; and payment must be made in full in relation to the amount due and through a bank. Release agreements or release deeds that do not bear these elements are absolutely null and void.
Release agreements that do not state that the entitlement has been paid in its true amount, or other payment documents containing a declaration of release, have the effect of a receipt limited to the amount they contain. Even in that case, it is mandatory for the payments to have been made through a bank.
The provisions of the second and third paragraphs also apply to all compensation claims arising from the service contract, including those that may be claimed by persons deprived of support and by the employee’s other relatives.”
Turkish Code of Obligations No. 6098, Art. 420
Article 420 of Turkish Code of Obligations No. 6098 lays down validity requirements for release agreements relating to employee receivables, and where any of these requirements is lacking, the release agreement will be regarded as invalid.[48] To set out these requirements: the release agreement must be in writing, a period of at least one month must have elapsed between the termination of the employment contract and the release agreement, the amount of the release and the type of receivable must be expressly stated, and payment must be made in full through a bank.
Under the second paragraph of Article 420 TCO, for a release agreement to be valid, “…a period of at least one month must have elapsed from the termination of the contract as at the date of the release…”.[49] It is not legally possible to characterise a release agreement prepared from the end of the employment contract between employee and employer as a contract extinguishing the debt. The aim of the relevant provision is to prevent the employee from making a hasty decision without thinking clearly following the end of the contract between the parties. This is because, in the ordinary course of life, the employee signs the release agreement without giving it much thought in order to obtain his or her employee receivables as soon as possible.[50] For this reason, although there are differing interpretations in doctrine, we consider this provision to be appropriate.
Release deeds executed within one month of the date of termination of the employment contract are prohibited. This may be read as meaning merely that the release deed must not be executed within the said one-month period. In drafting this provision, rather than imposing a prohibition on release, the date on which the release is to be made could have been stated expressly.
Claims linked to termination
With regard to termination-related receivables such as annual leave pay, the outstanding wage balance under the contract, severance pay and notice pay, a release agreement concluded while the contract is still in force is undoubtedly invalid.
Claims not linked to termination
However, there is no provision regarding receivables not linked to termination, such as bonuses, premiums, overtime, weekly rest day pay and public holiday pay. The matter will therefore be shaped by court decisions.[51]
The form and content of the release agreement are regulated in Article 420 TCO. Accordingly, it is provided that “A release agreement concerning the employee’s receivable from the employer must be in writing… and the type and amount of the receivable subject to the release must be expressly stated…”. Whereas an employee who has a receivable from the employer must release that receivable in writing, where the employer has a receivable from the employee, there is no need for the release to be made in writing when that receivable is to be released.[52]
Since the Law contains no separate provision, simple written form is sufficient for the validity of the release. It is not subject to execution before a notary or to any special form.
Noter huzurunda ibra
However, where the release is made before a notary, disputes concerning the date of execution and disputes as to whether the release agreement was obtained before or during the employment relationship will be eliminated[53]
In addition to the release agreement being in writing, the type and amount of the receivable subject to the release must be expressly stated. Otherwise, the release agreement will be invalid. For this reason, it should be drawn up by expressly stating to which heads of claim the amounts shown relate, setting out individually items such as severance pay and notice pay, wages, supplementary pay and paid annual leave receivables.[54]
Paragraph 2 of Article 420 of Law No. 6098, which governs the conditions of validity of the release deed, regulates the manner of payment: “ …payment must be made in full in relation to the amount due and through a bank…”. Under this provision, drafted in a manner incompatible with the spirit of the release deed, a release deed may be executed only after the employee’s receivables have been paid in full and through a bank. Under this provision, it is not possible for a debt arising in favour of the employee in the employment relationship between the employee and the employer to be extinguished by release.
In the relevant article, the legislator has confused the institutions of performance and release. Where the employee’s receivable from the employer is paid in full, we must speak not of release but of full performance. A debt extinguished by performance cannot be revived and extinguished again by release. In essence, as generally regulated in Article 132 of the TCO, a release deed is an agreement that extinguishes a debt in whole or in part. In this case, the release agreement does not extinguish the debt but appears as an institution that proves the debt has been extinguished.[55]
Release
Release deed: an agreement that extinguishes all or part of a debt without it being performed.
Performance
Where the debt is paid in full, the legal transaction is performance, not release. A debt extinguished by performance cannot be revived and extinguished again by release.
The requirement for payment to be made through banks is consistent with the provision of the Labour Law providing that wages are to be paid at the workplace or into a bank account opened specifically for the individual, and with the “Regulation on the Payment of Wages, Premiums, Bonuses and All Entitlements of This Nature Through Banks[56]”, which became part of the legislation on 1.1.2009. Although this Regulation applies to employers employing at least 10 employees, since payment through a bank, listed as a validity condition of the release agreement, is not restricted by any number of employees, payment under the release agreement must be made through a bank regardless of how many employees work at the workplace.[57]
Paragraph 3 of Article 420 of the Turkish Code of Obligations provides: “Release agreements that do not state that the right has been paid in its actual amount, or other payment documents containing a declaration of release, have the effect of a receipt limited to the amount they contain. Even in this case, payments must be made through a bank.” Accordingly, payments that do not qualify as performance or full release will not be characterised as a release deed but will have the nature of a receipt.
Makbuz is a document which the creditor is obliged to issue at the debtor’s request and which proves that the creditor has collected the receivable from the debtor.
Although the creditor may claim the outstanding balance beyond the payment amount stated in the receipt, the legal nature of a release is not of this kind; it extinguishes the debt. However, in the institution of release, which the law applies strictly, if such a payment is not made through a bank, it will not even have the nature of a receipt.[58]
Although release agreements stating an amount have been accepted as receipts, no time limit has been laid down for the annulment of a release agreement. Regarding the treatment of release agreements as receipts: before Law No. 6098 entered into force, the Court of Cassation also recognised the validity of release agreements stating an amount and emphasised the debt-extinguishing nature of release. As a result of these decisions, the principle of interpretation in favour of the employee, one of the fundamental principles of labour law, was restricted and narrowed. Although it was stated in the decision of the Assembly of Civil Chambers of the Court of Cassation dated 21.10.2009 and numbered 2009/396 E. and 2009/441 K. that, in a release agreement drawn up after termination and listing the heads of claim individually, the intention to release must be regarded as valid where cases of defective consent are alleged but not proven, it can be seen from court decisions that, in the institution of release shaped by case law, release agreements stating an amount have been accepted as being in the nature of a receipt.[59]
Practical checklist · When drafting
Pratik kontrol listesi · Dikkat
Since the release agreement is a legal institution that extinguishes a receivable, in short a right, and since it arises in practice particularly between employer and employee, it is frequently encountered in everyday life. Until 1.7.2012, since release had not been placed on a statutory footing in Turkish law, the matter was resolved through the case law of the Court of Cassation. Proceeding from the protective character towards the employee, one of the fundamental principles of labour law, the High Court drew a framework concerning the validity and nature of the institution of release through the interpretations it developed within the framework of the general principles of law in response to the disputes it had faced over many years. As of 1.7.2012, the institution of release has taken its place in legislation through the new provisions made.
For the release agreement, which acquired a statutory basis with Turkish Code of Obligations No. 6098, statutory validity requirements have emerged together with that Code. While all case law of the Court of Cassation that does not conflict with the Code retains its place, in respect of certain gaps in the Code, new requirements may be added to the statutory requirements through case law, again proceeding from the principles of labour law that are specific to it and protective of the employee.
It should be noted in particular that, because the legislator has confused the institutions of release and performance, the institution of release in labour law loses its meaning under Law No. 6098. This is because, under the relevant article of the Code, where the amount of the receivable is not paid in full, the contract between the parties is not regarded as a release but is assessed merely as a receipt having documentary character. In any event, where the amount of the receivable is paid in full, the obligational relationship will be extinguished by performance. There can be no question of releasing a debt that has already been extinguished.
As regards the employer’s claim
All of the above concerns the employee’s release of the employer. There is no obstacle to the employer granting a release where it has a receivable from its employee.
[1] REİSOĞLU, Safa: Borçlar Hukuku, Istanbul, 2008, p. 360
[2] İZMİRLİOĞLU, Ayça: 6098 Sayılı Kanuna Göre İbraname, p. 3
[3] SÜZEK, Sarper: İş Hukuku, Istanbul, 2015, p. 797
[4] See the decision of the Assembly of Civil Chambers of the Court of Cassation dated 27.4.1983, 1980/3055 E., 1983/427 K., UYAP Legislation and Case Law Programme
[5] See the decision of the Assembly of Civil Chambers of the Court of Cassation dated 08.03.2006, 2006/9-20 E., 2006/52 K., UYAP Legislation and Case Law Programme
[6] See the decision of the 9th Civil Chamber of the Court of Cassation dated 09.11.2005, 2005/4540 E., 2005/35429 K., UYAP Legislation and Case Law Programme
[7] See the decision of the Assembly of Civil Chambers of the Court of Cassation dated 04.10.2006, 2006/9-582 E., 2006/625 K., UYAP Legislation and Case Law Programme
[8] AKTAY, Nizamettin: İş Hukuku, Ankara 2007, p. 218.
[9] SÜZEK, op. cit., p. 722.
[10] İZMİRLİOĞLU, op. cit., p. 4
[11] ÇİL, Şahin: İş Hukukunda İbra Sözleşmesi, Kamu-İş, Vol. 7, 2004, p. 5
[12] YILMAZ, Halil: İş Hukukundan Kaynaklanan Tazminat Alacaklarında İbra, Çimento İşveren, 2010, p. 46
[13] OĞUZMAN, M. Kemal / ÖZ, M. Turgut: Borçlar Hukuku Genel Hükümler, Istanbul, 2005, p. 412
[14] MOLLAMAHMUTOĞLU, Hamdi: İş Hukuku, 3rd Edition, Ankara, 2008, p. 846
[15] Decision of the 9th Civil Chamber of the Court of Cassation dated 06/07/1967, E: 1967/7072, K: 1967/6175, www.kazancı.com
[16] EREN, Fikret; Borçlar Hukuku Genel Hükümler, Istanbul, 2010, p. 167
[17] ÖZ; Tuğba: Türk İş Hukukunda İbraname Uygulamaları, Unpublished Master’s Thesis, Istanbul, 2006, p. 16
[18] TURANBOY, K. Nuri: İbra Sözleşmesi, Ankara, 1998, p.105
[19] KILIÇOĞLU, Ahmet M.: Borçlar Hukuku Genel Hükümler, Ankara, 2005, p. 35
[20] For detailed information, see ERMAN, Çiğdem: Yargıtay Kararları Işığında Türk İş Hukukunda İbra Sözleşmesi, Unpublished Master’s Thesis, Ankara, 2002, p. 11
[21] ÇİL, Şahin: İş Hukukunda İbra Sözleşmesi, Istanbul, 2006, İbraname, p. 7
[22] Ibid., p. 7
[23] EREN, op. cit., p. 1260
[24] KILIÇOĞLU, op. cit., p. 821
[25] TURANBOY, op. cit., p. 35
[26] Ibid., p. 38
[27] ÇİL, İbra Sözleşmesi, p. 135
[28] TANDOĞAN, Haluk: La Nullité, L’annulation et la resiliation partielles des contrats, Geneva 1952, pp. 14-15
[29] ÇİL, Şahin: İş Hukukunda İbra Sözleşmesi, KAMU-İŞ, Vol. 7, No. 3, 2004, Sözleşme, p. 134
[30] OĞUZMAN/ÖZ, op. cit., p. 577
[31] TURANBOY, op. cit., p. 34
[32] UYGUR, Turgut: Borçlar Kanunu, Vol. 2, Ankara, 1990, p. 517
[33] Court of Cassation, Assembly of Civil Chambers, 24.11.1999, 1999/9-968 E. – 1999/983 K. (www.kazancı.com.tr)
[34] TURANBOY, op. cit., p. 35
[35] Court of Cassation, 9th Civil Chamber, 15.10.2010, 2008/41165 E., 2010/29240 K. (www.kazancı.com.tr)
[36] Court of Cassation, 9th Civil Chamber, 5.11.2010, 2008/37441 E., 2010/31943 K. (www.kazancı.com.tr)
[37] Court of Cassation, 9th Civil Chamber, 25.01.2010, 2009/21161 E. 2010/1029 K. (www.kazanci.com.tr)
[38] Court of Cassation, 9th Civil Chamber, 29.12.2003, 2003/10704 E. 2003/23415 K. (www.kazanci.com.tr)
[39] Court of Cassation, Assembly of Civil Chambers, 29.03.2006, 2006/9-82 E. 2006/118 K. (www.kazanci.com.tr)
[40] 19 Court of Cassation, Assembly of Civil Chambers, 29.03.2006, 2006/9-82 E. 2006/118 K. (www.kazanci.com.tr)
[41] Court of Cassation, 9th Civil Chamber, 03.06.2008, 2007/37496 E. 2008/13783 K. (www.kazanci.com.tr)
[42] Court of Cassation, 9th Civil Chamber, 25.12.2006, 2006/27096 E. 2006/3363 K. (www.kazanci.com.tr)
[43] Court of Cassation, 9th Civil Chamber, 4.11.2010, 2008/37372 E., 2010/31566 K. (www.kazancı.com.tr)
[44] Court of Cassation, 9th Civil Chamber, 11.11.2004, 2004/9972 E. 2004/25680 K. (www.kazanci.com.tr)
[45] Court of Cassation, Assembly of Civil Chambers, 22.10.2008, 2008/9-639 E. 2008/653 K. (www.kazanci.com.tr)
[46] ÇOPUROĞLU, Çağla: İşveren Açısından Tarihe Karışan İbraname ve Yargıtay Uygulamaları, Çankaya University Journal of Law, 2012, Ankara, p. 96
[47] ÇİL, Şahin: 6098 Sayılı Borçlar Kanunu Hükümleri Çerçevesinde İş Hukukunda İbra Sözleşmelerinin Geçerliliği, SİCİL İş Hukuku Dergisi, No. 21, 2011, p. 81. (İbranın Geçerliliği)
[48] İZMİRLİOĞLU, op. cit., p. 14
[49] SÜZEK, op. cit., p. 797
[50] İZMİRLİOĞLU, op. cit., p. 15
[51] ÇİL, İbranın Geçerliliği, p. 78
[52] SÜZEK, op. cit., p. 797
[53] ŞEN, Murat: 6098 Sayılı Türk Borçlar Kanunu’na Göre İş Hukukunda İbra Sözleşmesi, LEGES Özel Hukuk Dergisi, Vol. 1, No. 1, 2013, p. 19
[54] ÇOPUROĞLU, op. cit., p. 101
[55] SÜZEK, op. cit., p. 798
[56] Regulation on the Payment of Wages, Premiums, Bonuses and All Entitlements of This Nature Through Banks, Official Gazette, 18.11.2008/27058
[57] ÇOPUROĞLU, op. cit., 2012, Ankara, p. 104
[58] SÜZEK, op. cit., p. 799
[59] ÇİL, Şahin: İbra Sözleşmesi ile İkale Sözleşmesinin İş Güvencesine Etkileri, SİCİL İş Hukuku Dergisi, No. 7, 2007, p. 26 (İbra ve İkale)
Related legislation: Turkish Code of Obligations No. 6098 (mevzuat.gov.tr)
A release (ibraname) is a contract that extinguishes all or part of a debt without performance. In labour law it arises in particular where an employee releases the employer from a debt.
Under Article 420 of the Turkish Code of Obligations (TBK), the release agreement must be in writing, at least one month must have passed since the termination of the contract, the type and amount of the receivable must be clearly stated, and payment must be made in full and through a bank. A release lacking these elements is absolutely null and void.
According to the Court of Cassation case law cited in the article, a release agreement made while the employment relationship continues is not considered valid; during this period the employee is regarded as dependent on the employer. Article 420 TBK also requires that, as of the date of the release, at least one month has passed since the termination of the contract.
TBK 420/3’e göre hakkın gerçek tutarda ödendiğini içermeyen ibra sözleşmeleri, içerdikleri miktarla sınırlı olarak makbuz hükmündedir ve bu hâlde dahi ödemenin banka aracılığıyla yapılması zorunludur. Makalede, makbuzda yer alan miktar dışındaki bakiye alacağın talep edilebileceği belirtilmektedir.
The article states that, since the law contains no separate provision, the ordinary written form is sufficient. It notes that a release made before a notary would eliminate disputes concerning the date on which it was drawn up.
According to the Court of Cassation decision cited in the article, provisions on job security are matters of public order, and no effect can be given to acts that remove the right to bring a reinstatement action. Having signed a release concerning employment receivables does not prevent a reinstatement action from being brought.
The article states that the regulation on payment of wages through banks applies to employers with at least 10 employees, but that the requirement of payment through a bank, as a condition of validity of the release, is not limited by the number of employees.
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