Release Agreement in Employment Relations

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A “Leaver General Release” is a written and signed declaration obtained from the employee whose employment contract is terminated, showing that employee has been received all his due rights and releases and discharges the employer for any claims he may have as a result of the termination.

The release document aims at preventing further litigation process.

When an employment contract is terminated, employee shall be paid his severance pay, basic wages, overtime earnings, wages for weekly rest days and national or general holidays, annual leave remuneration and any other receivables due as of the date of leave.

HOW TO ARRANGE A RELEASE DOCUMENT?

Release agreement is arranged in article 420 of Turkish Code of Obligation No. 6098.

For preparing a valid agreement the following points should be taken into consideration:

  • It should be in written form
  • All receivables of employee with their names and amounts should be included in the agreement, such as;

ü  Severance pay

ü  Notice pay

ü  Wages, all supplements to basic wages

ü  Overtime earnings

ü  Wages for weekly rest days and national or general holidays

ü  Annual leave remuneration and any other receivables due as of the date of leave.

  • Payment must be done through the bank.
  • For preparing and signing a release agreement at least one month period must passed the date of termination of the contract.

PROMLEM IN DATE OF RELEASE AGREEMENT

As it is seen below release agreement can only be concluded after at least one month period have passed the date of termination. This rule causes a problem for the employer, because after one month of termination it cannot be easy to find the employee.

Even it may be difficult to find the leaver after one month he has left, employer has to comply with this rule for a valid release agreement.

Things to Know About Severance Pay in Turkey

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Severance pay is a compensation that should be paid by the employer in case of termination of employment contract under certain condition.

Severance payment is arranged in article 14 (still in effect) of Former Labor Law no. 1475.  

An employee who has worked at least one year is entitled to severance pay under the following conditions;

  • Where employee terminates the contract for  just cause, such as for reasons of health, immoral or dishonorable conduct by the employer and force majeure
  • Where Employer terminates the contract without a valid reason (the reasons other than for malicious, immoral or dishonorable conduct or other similar behavior specified in Labor Act)
  • Leaving the workplace due to the compulsory military service (for males)
  • Leaving in order to receive an old age pension, pension fund or disability insurance pension or to receive a lump-sum payment from the statutory institutions or retirement funds
  • Leaving voluntarily in order to receive partial pension (after completing 3,600 premium days and 15 years of insurance period - a document must be submitted to employer from the social security agency stating that he has worked for the period).
  • Where the female employee terminates the contract voluntarily within one year following the date of marriage
  • In  case of death of the employee

Withholding Tax and SSI Premiums will be Declared a Single Form

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Executive Summary

Starting from January 2018 withholding tax returns and SSI e-declarations will be combined in a single form under the name of "Withholding Tax and Monthly Premium Service Document;” and SSI premiums and taxes withheld from employees declared only to the tax offices until the 23rd of the following month.

Regulation on Deletion, Destruction or Anonymization of Personal Data in Force

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“Regulation on Deletion, Destruction or Anonymization of Personal Data” has been published in Official Journal No. 30224, dated 28 October 2017, and will get into force at 1st January 2018.

As is known “Law on Protection of Personal Data No. 6698,” intending to protect fundamental rights and freedoms of persons, and in particular their right to privacy with respect to the processing of personal data, and to set forth principles and procedures which bind natural or legal persons who process personal data had been issued in Official Journal No. 29677, dated 7 April 2016.

The provisions apply to natural persons whose personal data are processed as well as to natural or legal persons who process such data fully or partially through automatic or non-automatic means, which form part of a filing system or are intended to form part of a filing system.

Arbitration Becomes Compulsory in Labor Disputes

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Employees and employers shall resort to arbitrator in the first place instead of litigation process for their labor disputes and conflicts, as per the “Law on Labor Courts No. 7036” issued in Official Gazette numbered 30221, dated 25 October 2017.

The also called “mandatory mediation” aims at lessening  the heavy burden of labor courts  by directing the parties to reach out-of- court settlements which are time saving and less costly in comparison with litigation.

ARBITRATION AS CAUSE OF ACTION

The new law introduces the “arbitration as a cause of action,” a new concept in Turkish legislation, meaning that no lawsuit before resorting arbitrator.

Retirement After Completion of 3600 Work Days - Legal Disputes Over Severance Pay

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Executive summary

As per article 14 -still in force- of former Labor Law 1475, an employee is entitled to severance pay in case of resignation after completing 3,600 work days and 15 years insurance period, provided that he/she presents a document from the Social Security Institution showing the entitlement of  retirement except age limit. 

For years it has been a highly controversial topic whether the employee, who received his severance pay entitled in line with above mentioned provision, may work in another workplace during his waiting period for age limit. In other words, whether an employer who paid the severance may claim the payment back in case the employee starts working another employee’s establishment, instead of waiting for the legal retirement age.

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