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 Some of the articles (e.g.: articles 9 and 10) are no longer
applicable whereas some of the procedures regulated under it are not compatible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.