What Is Mandatory Mediation in Labor Lawsuits?

Mandatory mediation in labor lawsuits is a dispute resolution mechanism introduced by Article 3 of the Labor Courts Law No. 7036, which requires application to a mediator before filing a lawsuit in certain labor disputes. This regulation came into force on January 1, 2018, and is applied as a procedural prerequisite in a significant portion of labor lawsuits.

Mandatory mediation aims to resolve labor disputes through negotiation before they are brought to court. This mechanism targets both reducing the workload of courts and enabling parties to resolve their disputes more quickly and at lower cost. During the mediation process, parties negotiate in the presence of an independent and impartial mediator, attempting to find a common solution.

Mediation is not a judicial activity. The mediator does not have the authority to make decisions like a judge. The mediator's role is to bring the parties together, facilitate communication, manage the negotiation process, and help the parties find their own solutions. The mediator may offer solution proposals to the parties but cannot impose any decision.

Mandatory mediation is a procedural prerequisite. If a lawsuit is filed directly without applying for mediation, the court dismisses the case on procedural grounds. The plaintiff is required to attach the final mediation report to the petition. In a case filed without the report, the court grants the plaintiff a definitive period to submit the report; if the report is not submitted within this period, the case is dismissed on procedural grounds.

Disputes Within the Scope of Mandatory Mediation

Pursuant to Article 3 of Law No. 7036, mediation is mandatory in lawsuits filed for employee or employer receivables and compensation based on law, individual or collective bargaining agreements, and in lawsuits filed for reinstatement. The main disputes evaluated within this scope are as follows:

• Severance pay: Compensation claimed when the employee has worked for at least 1 year and the termination conditions prescribed by law are met.
• Notice pay: Compensation claimed due to termination without observing the notice period.
• Overtime pay: Wage claims for work exceeding 45 hours per week.
• Annual leave pay: Monetary equivalent of unused annual leave.
• Wage claims: Claims for unpaid or underpaid wages.
• Discrimination compensation: Compensation claimed due to discrimination at the workplace.
• Bad faith compensation: Compensation claimed when the employment contract is terminated in bad faith.
• Reinstatement lawsuit: A lawsuit filed by an employee seeking reinstatement due to invalid termination.

The scope of mandatory mediation was expanded with amendments made in 2019. Law No. 7155 introduced mandatory mediation in commercial cases as well. However, mandatory mediation specific to labor law is regulated by Article 3 of Law No. 7036 and covers cases filed in labor courts [TO BE VERIFIED].

Lawsuits Outside the Scope of Mandatory Mediation

Pursuant to Article 3/3 of Law No. 7036, material and moral compensation lawsuits arising from work accidents or occupational diseases, and related determination, objection, and recourse lawsuits are outside the scope of mandatory mediation. These lawsuits may be filed directly in the labor court.

Other disputes outside the scope of mediation include:

• Material compensation lawsuits filed due to work accidents
• Moral compensation lawsuits filed due to work accidents
• Compensation lawsuits arising from occupational diseases
• Recourse lawsuits filed by the Social Security Institution
• Service determination lawsuits (directed at the Social Security Institution)
• Determination lawsuits related to work accidents or occupational diseases

The main reason for excluding lawsuits arising from work accidents and occupational diseases from the mediation scope is the nature of these lawsuits, which concern public order. Work accident and occupational disease lawsuits produce important consequences both for employee health and safety and for the social security system, and it has been assessed that solutions based on party will cannot provide adequate protection in this area.

How Does the Mediation Application Process Work?

The mediation application is made to the authorized mediation bureau according to the subject of the dispute. Pursuant to Article 3/5 of Law No. 7036, the application is made to the mediation bureau at the respondent's place of residence or the place where the work was performed. In places where no mediation bureau exists, the application is made to the court clerk's office.

Application Steps

1. Application petition: The applicant applies to the mediation bureau in writing or verbally. The application specifies the identification and contact information of the parties, the subject of the dispute, and the requested amount.
2. Appointment of mediator: The mediation bureau appoints a mediator from among mediators registered in the registry. The parties may jointly select one of the mediators on the list; otherwise, the appointment is made by the bureau.
3. Invitation to first meeting: The appointed mediator invites the parties to the first meeting as soon as possible. The invitation may be made through any means of communication.
4. Negotiation process: The parties negotiate in the presence of the mediator. The number and duration of meetings are determined according to the needs of the parties.
5. Preparation of final report: At the end of the process, the mediator prepares the final report of agreement or non-agreement.

Time Limits

The mediation period is limited to 3 weeks from the date the mediator is appointed. This period may be extended by the mediator for a maximum of 1 additional week in mandatory cases. Therefore, the mediation process may last a maximum of 4 weeks (Article 3/10) [TO BE VERIFIED].

The mediation period is different for reinstatement claims. In applications made with reinstatement claims, the mediation process must be concluded within 3 weeks from the date the mediator is appointed. This period may be extended by the mediator for a maximum of 1 additional week in mandatory cases.

Conduct of Mediation Sessions

Mediation sessions are conducted with the parties and the mediator coming together. Sessions may take place at the mediator's office, at the courthouse mediation center, or at any location agreed upon by the parties. Parties may participate in sessions personally or through their representatives.

Confidentiality is the fundamental principle in mediation sessions. Pursuant to Article 4 of the Mediation in Civil Disputes Law No. 6325, statements and documents of the parties or the mediator during the mediation activity may not be used as evidence in court or arbitration proceedings. This confidentiality principle aims to encourage parties to act more openly and sincerely during the negotiation process.

Parties may participate in mediation sessions personally, through their legal representatives, or through their attorneys. If the employer is a legal entity, a company official, human resources manager, or attorney may participate in the sessions. The employee may also participate with their attorney or alone.

The obligation to attend mediation sessions is an important matter. Pursuant to Article 3/12 of Law No. 7036, if one of the parties fails to attend the first meeting without showing a valid excuse, the mediation activity ends and the non-attending party is noted in the final report. The non-attending party is held responsible for all litigation costs even if partially or fully vindicated in the lawsuit, and no attorney's fee is awarded in their favor.

Agreement Report and Legal Consequences

If the parties reach an agreement during the mediation process, an agreement document is prepared by the mediator. The agreement document contains the matters on which the parties have reached consensus and is signed by the parties and the mediator. If the agreement document is signed jointly by the parties, their attorneys, and the mediator, it is deemed a document with the force of a court judgment.

An agreement document with the force of a court judgment can be enforced like a court decision. That is, the creditor party can directly initiate enforcement proceedings with a judgment based on the agreement document. This is one of the most important advantages of the mediation process and eliminates the need to file a new lawsuit after settlement.

If the agreement document is not signed jointly by the parties, their attorneys, and the mediator, the document does not have the force of a judgment. In this case, an enforceability annotation must be obtained for the agreement document. The enforceability annotation is obtained from the court determined according to jurisdiction and venue rules regarding the main dispute.

Content of the Agreement Document

The fundamental elements that should be included in the agreement document are: identification and contact information of the parties, identification information of the mediator, subject of the dispute, agreement conditions (payment amount, payment date, installment conditions, etc.), agreement date, and signatures of the parties and the mediator.

It is important that payment conditions are determined clearly and precisely in the agreement document. The total payment amount, payment date or installment plan, payment method (cash, wire transfer, EFT, etc.), and sanctions to be applied in case of delay should be clearly stated.

The content of the agreement document differs in reinstatement claims. If the parties agree on reinstatement, the employee's start date, the compensation amount to be paid in case of non-reinstatement, and wages for the idle period should be included in the document [TO BE VERIFIED].

Non-Agreement Report and Lawsuit Filing Process

If the parties cannot reach an agreement during the mediation process, a final report (non-agreement report) is prepared by the mediator. This report documents that the mediation process ended in disagreement and is a prerequisite for exercising the right to file a lawsuit.

After the non-agreement report is prepared, the plaintiff may file a lawsuit in the labor court. Lawsuit filing periods vary depending on the type of dispute:

• Reinstatement lawsuit: A lawsuit must be filed in the labor court within 2 weeks from the date the non-agreement report is prepared. This is a forfeiture period, and failure to meet it results in loss of the right to sue.
• Receivables and compensation lawsuits: Lawsuits may be filed within the general statute of limitations periods. The statute of limitations for severance pay, notice pay, overtime, annual leave, and wage claims is 5 years.

The statute of limitations is suspended and forfeiture periods do not run during the mediation process. This regulation was introduced to prevent the mediation process from putting parties at a disadvantage in terms of the statute of limitations.

Mediation Fees and Costs

The mediation fee is determined according to the Mediation Minimum Fee Tariff. If the parties reach an agreement, the mediation fee is calculated based on the agreed amount according to the rates determined in the Tariff and is shared equally by the parties. Otherwise may be agreed upon.

If the parties cannot reach an agreement, the first two hours of mediation fee are covered by the Treasury. This regulation aims to limit the additional financial burden the mediation process places on the parties. The fee for the portion exceeding the first two hours is paid equally by the parties [TO BE VERIFIED - current fee tariff should be checked].

There is no obligation for the parties to retain an attorney during the mediation process. However, especially in complex disputes and high-value claims, it is recommended that parties obtain attorney support. Attorney fees are the responsibility of the parties themselves and are separate from mediation fees.

Mediation Process in Reinstatement Lawsuits

The mediation process in reinstatement lawsuits shows some differences from other labor lawsuits. The employee must apply to a mediator within 1 month from the service of the termination notice. This is a forfeiture period.

If the parties agree on reinstatement during the mediation process, the agreement document must clearly specify the employee's start date. The compensation amount to be paid in case of non-reinstatement may also be included in the document.

If the parties cannot reach an agreement, a reinstatement lawsuit must be filed in the labor court within 2 weeks from the date the final report is prepared. Failure to meet this deadline results in forfeiture of the right to sue. In reinstatement lawsuits, proceedings are conducted under simplified trial procedure and must be concluded expeditiously by the court. The case must be concluded by the court within 2 months, and the Regional Court of Appeal's decision must become final within 1 month [TO BE VERIFIED].

Matters to Consider in Mediation

There are important matters that parties should pay attention to during the mediation process. These matters are of great importance not only for ensuring the effective and efficient conduct of the process but also for preventing parties from suffering loss of rights.

Considerations for Employees

• Attention to deadlines: In reinstatement claims, mediation must be applied for within 1 month from the termination notice. Missing the deadline results in loss of rights.
• Document preparation: Before attending the mediation session, the employment contract, payrolls, bank account statements, termination notice, and other relevant documents should be prepared.
• Legal consultation: Consulting a labor law attorney before attending the mediation session is important for protecting rights.
• Careful review of agreement document: It should not be forgotten that the agreement document will have the force of a court judgment; its content should be read carefully and unclear matters should be questioned.
• Not confusing with release: A mediation agreement document is different from a release (ibraname). The consequences of signing a release and the consequences of a mediation agreement are distinct.

Considerations for Employers

• Attendance at first meeting: Failure to attend the first meeting without a valid excuse produces serious legal consequences. Even if vindicated in the lawsuit, litigation costs and attorney fee sanctions apply.
• Appointing an authorized representative: The representative attending mediation sessions must have the authority to reach agreements.
• Cost-benefit analysis: The cost savings from reaching agreement in mediation (attorney fees, litigation costs, time loss) should be compared with the proposed settlement amount.
• Strategy in reinstatement claims: If an agreement is reached in a reinstatement claim, attention should be paid to ensuring the agreement conditions are enforceable.

Advantages and Disadvantages of Mediation

Advantages

• Speed: The mediation process lasts a maximum of 4 weeks, while labor lawsuits can continue for years.
• Low cost: It requires much lower expenses compared to the litigation process.
• Confidentiality: The process is kept confidential, protecting the reputation of the parties.
• Flexibility: Parties can agree on solutions they could not obtain through a court decision.
• Relationship preservation: Resolution through negotiation can help preserve the relationship between parties.

Disadvantages

• Power imbalance: The power imbalance between employee and employer can affect the negotiation process.
• Information asymmetry: The employee's lack of full knowledge of their rights may lead to agreements at low amounts.
• Additional time: If no agreement is reached, the mediation process causes additional time loss before the lawsuit.
• Pressure risk: There is a risk that the employee may be pressured into agreeing to low amounts due to economic difficulties.

The effectiveness of the mediation process largely depends on the competency of the mediator, the good faith of the parties, and the professional conduct of the negotiation process. A well-managed mediation process can provide benefits for both the employee and the employer.

This content is for general informational purposes only and does not constitute legal advice. It is strongly recommended that you seek professional support from a lawyer for your specific legal issues.