Mandatory Mediation in Labour Disputes — A Practical Guide

What is mandatory mediation in labour disputes, which claims does it cover, and how does the application procedure work? A guide to mediation under Art. 3 of Labour Courts Law No. 7036.

What Is Mandatory Mediation in Labour Disputes?

Under Art. 3 of Labour Courts Law No. 7036, an application to a mediator is a condition of action for employee or employer claims, compensation claims and reinstatement claims based on statute or on an individual or collective labour agreement. Mediation in commercial disputes, introduced by Law No. 7155, is a separate regime governed by TTK Art. 5/A.

Disputes Within the Scope of Mandatory Mediation

Claims by an employee or employer for debts and compensation based on statute or on an individual or collective labour agreement, and claims for reinstatement, fall within the condition of action. Severance and notice pay, wages, overtime, weekly rest, national and public holidays, annual leave pay, and compensation for discrimination or bad faith are the principal examples. In each claim the parties' status as employee and employer and the legal basis of the claim are examined separately.

Mandatory mediation in commercial actions is a separate regime governed by TTK Art. 5/A, introduced by Law No. 7155. Where a dispute touches both employment and commercial relations, subject-matter jurisdiction and the condition of action are determined according to the parties' status and the substance of the claim.

Actions Outside the Scope of Mandatory Mediation

Claims for material and moral damages arising from an occupational accident or occupational disease, and related declaratory, objection and recourse actions; claims against the Social Security Institution for a declaration of service; and disputes arising from social security legislation, fall outside the scope of mandatory mediation as a condition of action. By contrast, a claim against the employer for wages or contractual sums by reason of an occupational accident is assessed separately according to its legal nature.

How Does the Mediation Application Procedure Work?

The application is made to the mediation office at the other party's place of residence or at the place where the work is performed; where there is no such office, to the registry of the designated civil court of peace (Law No. 7036, Art. 3/5). The application may be written or oral; the parties' contact details and the subject of the claim are set out as clearly as possible. The mediator is assigned by the office; the parties may agree on a common mediator from the list.

The mediator concludes the process within three weeks of the date of assignment, extendable by a maximum of one week where necessary. The same period applies to reinstatement claims. At the end of the meeting a final record of agreement or non-agreement is drawn up. For reinstatement, the one-month period for applying, running from service of the notice of termination, is separately preserved.

Conduct of the Mediation Meetings

The mediator concludes the application within three weeks of the date of assignment; the period may be extended by a maximum of one week where necessary (Law No. 7036, Art. 3/10). HUAK Art. 4 governs the confidentiality of the meetings, and Art. 5 provides that certain statements and documents produced in mediation may not be used as evidence in subsequent proceedings. A party who fails without valid excuse to attend the first meeting is held liable for half the litigation costs even if they succeed in whole or in part in the action, and is awarded only half of the attorney's fee in their favour. If neither party attends, each bears their own litigation costs (the regime applicable after 12 March 2024).

The Agreement Record and Its Legal Consequences

The agreement document is signed by the parties and the mediator. A document signed jointly by the parties, their attorneys and the mediator is a document in the nature of a judgment without any annotation being required; in other cases an annotation of enforceability may be sought under HUAK Art. 18. The parties may not bring an action on the matters agreed.

In a reinstatement agreement the date of re-engagement, the monetary amount of the wages and other entitlements for the period out of work, and the monetary amount of the compensation for failure to re-engage must be specified; otherwise no agreement is deemed to have been reached.

The Non-Agreement Record and the Procedure for Bringing an Action

The final record is attached to the statement of claim. In a reinstatement claim, an application is made to a mediator within one month of service of the notice of termination; if no agreement is reached, the action is brought before the labour court within two weeks of the final record. The action is concluded expeditiously and the regional court of appeal's decision is final; the former periods of “two months for the court and one month for the regional court of appeal” are no longer in force.

Mediation Fees and Costs

The fee is determined in accordance with the 2026 Minimum Mediation Fee Tariff in force at the date of the meeting. Where no agreement is reached, the fee for the first two hours is met from the budget; the part exceeding two hours is borne equally by the parties unless otherwise agreed. Where agreement is reached, the fee is shared equally unless otherwise agreed and may not fall below the tariff.

The Mediation Procedure in Reinstatement Actions

An employee seeking reinstatement must apply to a mediator within one month of service of the notice of termination. If no agreement is reached, an action may be brought before the labour court within two weeks of the date on which the final record was drawn up; within the same period the parties may also refer the dispute to a private arbitrator. If agreement is reached on reinstatement, the agreement document must state the date on which the employee will be re-engaged, the monetary amount of the wages and other entitlements for the period out of work, and the monetary amount of the compensation payable in the event of failure to re-engage. If these mandatory elements are not specified, no agreement is deemed to have been reached. The action is heard expeditiously and the regional court of appeal's decision is final; the repealed two-month and one-month procedural targets cannot be used as current time limits.

Points to Bear in Mind in Mediation

There are important points to which the parties must pay attention during the mediation process. These matter not only for the effective and efficient conduct of the process but also to ensure that the parties do not lose their rights.

Points for the Employee

Watch the time limits: in reinstatement claims a mediation application must be made within 1 month of the notice of termination. Missing the deadline results in loss of the right.
Prepare documents: before attending the mediation meeting, the employment contract, payslips, bank account movements, the notice of termination and other relevant documents should be prepared.
Legal advice: consulting a labour law attorney before attending the mediation meeting is important for the protection of one's rights.
Read the agreement document carefully: bear in mind that the agreement document will have the force of a judgment; read its contents carefully and ask about anything that is unclear.
Do not confuse it with a release: a mediation agreement document differs from a release. The consequences of signing a release and those of a mediation agreement are distinct.

Points for the Employer

Attendance at the first meeting: failing without valid excuse to attend the first meeting has serious legal consequences. Even if the employer succeeds in the action, the sanction as to litigation costs and attorney's fees applies.
Appointing an authorised representative: the representative attending the mediation meetings must have authority to conclude an agreement.
Cost-benefit analysis: the cost savings that agreement in mediation would produce (attorney's fees, litigation costs, loss of time) should be compared with the settlement amount proposed.
Strategy in reinstatement claims: where agreement is reached on a reinstatement claim, care should be taken that the terms of the agreement are workable.

Advantages and Disadvantages of Mediation

Advantages

Speed: the statute requires the mediator to conclude the application within three weeks of assignment, extendable by a maximum of one week where necessary. This is the statutory period applicable to the mediator; it is not a guarantee that the practical steps will be completed within exactly four weeks in every case.
Low cost: requires far lower expenditure than litigation.
Confidentiality: the process is kept confidential and the parties' reputations are protected. Flexibility: the parties may agree on solutions they could not obtain by court judgment.
Preservation of the relationship: a negotiated solution can help preserve the relationship between the parties.

Disadvantages

Imbalance of power: the imbalance of power between employee and employer may affect the negotiation process.
Information asymmetry: an employee who is not fully aware of their rights may settle for low amounts.
Additional time: where no agreement is reached, the mediation process causes an additional loss of time before litigation.
Risk of pressure: there is a risk that an employee will be pressed into settling for low amounts because of financial difficulty.

The effectiveness of the mediation process depends largely on the mediator's competence, the parties' good faith and the professional conduct of the negotiation. A well-managed mediation can benefit both employee and employer.

This content is for general information purposes only and does not constitute legal advice. For your specific legal problems you are strongly advised to obtain professional support from an attorney.

Frequently Asked Questions

How long does the process take?

Three weeks; extendable by a maximum of one week where necessary.

What is the consequence of failing without excuse to attend the first meeting?

Liability for half the costs and an award of only half the attorney's fee in one's favour.

What is the time limit for a reinstatement application?

One month from service of the termination notice; the action must be brought within two weeks of the final record.

Can an action be brought on a matter that has been agreed?

No.