New Law on Labor Courts Enacted, Substantially Changing Turkish Labor Law Procedure

The new Law on Labor Courts (“Law No.7036”) was enacted on 25 October 2017, replacing the former one issued in 1950. As a matter of fact, Law No.7036 substantially changed the Turkish labor law practice by introducing mandatory mediation for all types of labor disputes, except for the ones relating to occupational accidents and professional diseases.

The mandatory mediation is applicable for the most common labor claims namely; labor receivables, damages and reinstatement. Accordingly, as of 1 January 2018, for the above mentioned types of labor disputes, the parties cannot initiate a lawsuit before applying to the now mandatory mediation first. As per the law’s preamble, the main objective behind this mandatory mediation regulation is to ensure that the disputes are resolved in a shorter time and with lower costs. Consequently with Law No.7036, the mediation concept which is substantially based on the parties’ freedom of will is made mandatory for labor disputes in contradiction with mediation’s nature. Even so, time will show if mandatory mediation will serve to its intended purpose. Another major change introduced with Law No.7036 concerns the statute of limitations concerning the damages and other remedy claims arising out of labor disputes. The former term of ten years has now been revised down to five years. As summarized below, most of the changes introduced with the Law No. 7036 aim to ensure a higher level of procedural efficiency concerning the labor disputes and therefore concern changes to the applicable terms set under the former legislation. Below is the summary of some of the material changes introduced with the new legislation.

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