Mutual Termination Of Employment Contracts Under Labor Law 2 August 2016

One of the most important topics of the labour law is the job safety. The provisions of Article 18 and cntd. of the Labour Code numbered 4857 set forth the termination of the employment contract and the conditions of the termination, in a detailed manner, however, in practice,it can often be seen that  the employee and the employer terminate their contractual relationship by mutual expressions of will.  An agreement which terminates the employment contract in this way is classified as “mutual termination of contract”. In its decision numbered E. 2007/30801, K. 2008/9236, the 9th Civil Chamber of the Supreme Court explains the mutual termination contract as follows:

“The mutual termination contract is formed upon a party accepting the other party’s offering which expresses the intention to terminate the contract mutually. The mutual will of the parties on the termination does not constitute as a termination of the contract by unilaterally. For this reason, the expression of intent to conclude a mutual termination contract may not be considered as a termination in itself, and thereby transformed into one.”

Similarly, the statement of the employee that he/she desires to resign on the condition that the notice and the severance payment shall be paid, is not considered by the Supreme Court as a resignation on condition, but as an expression of intent for concluding a mutual termination contract. (9th Civil Chamber, E. 2008/34079, K. 2008/26691)

Although the contract is accepted in various decisions of the Supreme Court, there is not an explicit provision regarding the mutual termination contracts in the Turkish legislation. The legal basis of such contracts is the liberty of contract principle. The thought of parties to mutually terminate a contract which they have previously concluded, constitutes the legal basis of the mutual termination contracts. However, in order to ensure that the employees are not deprived of their rights that arise from the provisions of job safety legislation, validity conditions for mutual termination contracts, which are not laid down by the laws, have been formed. Hence, as it is also stated in the Supreme Court decisions, the application of mutual termination contracts have been prevalent after the provisions of labour-job protection have been come into effect. The provisions of labour-job protection aim to protect the employees from unjust termination of the contract, by employers and they are not applicable in case the termination is not made by the employer. Therefore, there is a question whether the mutual termination could be used by the employers to bypass the provisions of the labour-job protection. (22nd Civil Chamber, E. 2012/282, K. 2012/13883).

Besides, it is also against the basic principles of law that the employee becomes unable to enjoy his/her rights or receivables by entering into a mutual termination contract, as the employee has already a weaker position before the employer, In order to protect the employee, it is very important that several conditions for validity should be adopted.

The Conditions of Validity of the Mutual Termination Contract

The conditions for the legal validity of the mutual termination contract, based upon the decisions of the Supreme Court, could be listed as follows:

• The mutual termination contract has not been set out by the law, but it is subject the general provisions of the Turkish Code of Obligations on conditions for validity of the contracts.
• The states of defective intention stated in the Articles 30-39 of the Turkish Code of Obligations shall also be effective for the mutual termination contracts.
• The form, the scope and validity of the mutual termination contract shall be determined in accordance with the provisions of the Turkish Code of Obligations. Additionally, as the mutual temrination contract is also related to the Labour Law, the principle of “interpretation in favour of the employee” shall be considered, as well. (22nd Civil Chamber, E. 2012/282, K. 2012/13883).
• Regarding the validity of the mutual termination contracts,  one of the most important condition that is adopted by the Supreme Court is the reasonable benefit criterion, which shall be evaluated considering which party, employee or employer, offers the mutual termination and the characteristics of the case. Hence, it is required to check whether the employee is deprived of any legals payments that he/she is entitled to, due to the consequence of concluding the mutual termination contract. Additionally, if the offer for the mutual termination contract comes from the employer, the Supreme Court rules that the employer shall provide the employee with an additional compensation, for the sake of securing the presence of the reasonable benefit. (22nd Civil Chamber, E. 2014/402, K. 2014/71341).
• Another important point is the need of the interpretation of the contract in favour of the employee, because, in principle, the employee is not entitled to have severance and notice payment, in case the employment contract is terminated through mutual termination contract. Additionally, he/she cannot benefit from unemployment insurance under the Code numbered 4447. This situation conflicts with the responsibilities of the employer which are protecting the employees’ rights and acting honestly. Therefore, regarding the validity of the mutual termination contract, it should be interpreted in favour of the employee and the severance payment, notice payment, labor-job protection compensation and even a compensation for idle time shall be included in the scope of mutual termination contract.

Conclusion

Mutual termination contract is an agreement which aims to terminate the employment contract through mutual agreement of both parties. Although there is no explicit provisions about such contracts in Turkish legislation, they are legally evaluated under liberty of contract principle, however, it is not possible to evaluate them only under liberty of contract principle since the labor-job protection provisions in Turkish Labour Code would be violated by the employer. Therefore, the Supreme Court is very sensitive in this matter and in addition to the general provisions, the Supreme Court adopts some other conditions regarding the evaluation of the validity of such contracts, which are the reasonable benefit criterion and the characteristics of the case.

Türkçe Versiyonu İçin

http://www.kasaroglu.av.tr/tr/27989/Is-Hukukunda-Is-Sozlesmelerinin-Karsilikli-Feshi