I.        Introduction

An

alternative dispute resolution method is expected to be introduced in Turkey shortly

through the Draft Law on Labor Courts ("Draft Law"). The purpose of the

Draft Law is to bring a functional and an effective judicial procedure

for labor conflicts via mandatory mediation and

to replace the current regulations.

II.        Draft Law

Fundamental

reasons of drafting a new code for Labor Courts are specified in the preamble

of the Draft law[1]:

The first

reason is the necessity to ease the workload

of labor courts in Turkey. According to the preamble, more than six hundred

thousand labor lawsuits are pending before labor courts of first instance and

likewise more than two hundred thousand appealed lawsuits are pending before the

court of appeals as of 2015, which explicitly lengthen the litigation process.

Considering that longer process means greater expense and workload as well as

loss of time, many final decisions are no longer able to bring the

expected justice for the parties. Therefore, introducing an alternative dispute

resolution method (i.e.

mandatory mediation) has promptly found its place on the

agenda given that it may be able to bring order into this long standing issue.

The

second reason is that the current Law on Labor Courts No. 5521

("LLC") is 50 years old

and although it has gone through seven amendments, it is still inadequate

for current needs. Some of the articles (e.g.: articles 9 and 10) are no longer

applicable whereas some of the procedures regulated under it are not compatible

with the current Law of Civil Procedure No. 6100 ("LCP") regulating the judicial

process.

The third

and final reason is that the current LLC is no longer able to meet dynamic and

ever-changing demands of labor law in Turkey. The LLC

in some cases fails to respond to new fields of working, technological developments

and updated employee and employer relationships.

III.      Mandatory Mediation

With the

enactment of the Draft Law, many amendments (e.g.

establishment and duties of courts) will come into force. Yet, mandatory

mediation is apparently the most notable change

as it will bring a new perspective to judicial proceedings of labor conflicts. Mandatory

mediation broadly aims at shortening the judicial proceedings and easing the

workload of labor courts. Additionally, as the name suggests, parties will have

to apply for it before filing a lawsuit

before the labor courts and can only resort to judicial

process should they fail to reach an agreement at the mediation phase.

As per article

3/1 of the Draft Law, with respect to receivable lawsuits

based on individual or collective employment

agreements as well as re-employment lawsuits, applying for mediation before filing a

lawsuit will be mandatory, and if a lawsuit is filed without referring to

mediation, the lawsuit will be rejected on procedural grounds, for the absence

of cause of action. Accordingly, the legal conclusion of disregarding the mediation

phase will be deemed as the absence of cause of action.

IV.      Procedure for Mandatory Mediation

The

procedure for mandatory mediation is regulated under article 3 of the

Draft Law. According to this article,

if the subject of the lawsuit is a receivable

arising from an employment agreement or re-employment, the plaintiff shall

apply to the competent mediation authority for mediation located where the counterparty's

domicile or workplace is located.

The

selection of mediator is slightly different than ordinary mediation. As per

article 3/3, in the mandatory mediation

process, the parties may mutually agree on one of

the registered mediators. Otherwise, the mediation authority appoints a

mediator ex-officio. Once the

mediator is appointed, s/he gives information and invites the parties for a

meeting. Negotiation for mediation shall be concluded in three weeks starting

from the date of appointment. In certain circumstances,

timeframe can be extended for one week. On the other hand, as per article 3/7,

if either of the parties does not attend the meeting without submitting a valid

excuse, legal expenses might be imposed on that party, even if the lawsuit is

finalized in favor of the respective party. In

addition, the statute of limitations does not run for the period between the date

the plaintiff applied for mediation and the date

the last minute was recorded by the mediator,.

When the

mediation procedure is complete, the mediator issues the final minute and sends

a copy to the competent mediation authority.

V.        Mediation fees

Two different payment methods

for different scenarios are regulated under

article 3/6 of the Draft Law.

The first scenario is applied

when the parties reach an agreement before the mediator. In this case, mediation

fees shall be imposed equally on the parties unless the parties agree

otherwise. The calculation of fees is based on the second part of the Tariff on

Minimum Mediation Fees. The fees shall not be less than two hours

of mediation fee regulated under the first part.

The second scenario is

applied when the parties are unable to reach an agreement before the mediator.

At this stage, fees of the first two hours of the meeting are covered by public

treasury and the remaining fees are imposed equally on the parties unless the

parties agree otherwise. The calculation of fees is based on the first part of the

Tariff on Minimum Mediation Fees. In both scenarios, the fees are deemed as court

expenses.

VI.      Conclusion 

Mandatory

mediation that will come into force through the Draft Law is, in principle, a

useful alternative dispute resolution solution to reduce the workload of labor courts

and improve the judicial process. However given that ordinary mediation has

failed to attract the attention of community so far[2], it

might be said  that the mandatory

mediation may not bring the expected result either. Even

so, since the parties will have no option but

to apply for mandatory mediation, this, at

least, may relatively reduce the workload of labor courts. On the other hand,

besides the issue of whether alternative dispute

resolution should be compulsory for labor conflicts,

which is certainly a controversial topic, it

also incurs additional costs for the parties.

Consequently, the

Draft Law will set forth various reforms through mandatory mediation and

updated articles for the Turkish labor law.

Authors: Gönenç Gürkaynak, Esq., Can Güner and Tuğba Uluay, ELIG,

Attorney-at-Law

First published in Mondaq on

February 1, 2017

[1] For

the access: http://www.adalet.gov.tr/Tasarilar/

(Date: 25.01.2017)

[2] Oğuz Özgür, Türk İş Hukuku'nda Alternatif

Uyuşmazlık Çözüm Yolları, Istanbul 2016, Legal Yayıncılık, p. 60.