Definition and Judicial Review of the Mutual Rescission Agreement in Labor Law
1- INTRODUCTION
The mutual rescission agreement, despite not being explicitly regulated by law, has maintained its validity within our legal system since the provisions of the Mecelle, establishing itself as a contract that results in the termination of existing legal relations. As per its definition, mutual rescission agreement is an atypical contract that eliminates all effects of a previously established contract through mutual consent.
Although the mutual rescission agreement originally emerged from the provisions of the Mecelle, primarily in the context of commercial sales contracts, it has also found a place within labor law. In practice, it is an atypical contract frequently utilized by employers. Despite the lack of explicit legal regulation, its form and boundaries have been shaped through judicial decisions, particularly by the Court of Cassation.
This article will address the definition and legal characterization of the mutual rescission agreement, its differences from other termination methods with similar characteristics, its formation, and its judicial review.
2- DEFINITION, LEGAL NATURE, AND DISTINCTION OF THE MUTUAL RESCISSIONAGREEMENT
2.1- Definition of the Mutual Rescission Agreement
The term “ikale” originates from Arabic and denotes the rescission of a contract. In the Mecelle, the term ikale is commonly used to signify the rescission of commercial sales relationships. Although the concept of ikale is not explicitly regulated within legal statutes, it has continued to be utilized in practice as the termination of a relationship through mutual agreement.
Despite the absence of statutory regulation, a mutual rescission agreement can be defined as the creation of a new contract aimed at dissolving an existing legal relationship through mutual declarations of intent, in accordance with the principle of contractual freedom. [1] Due to its nature, the mutual rescission agreement is classified as an atypical contract. [2]
In the context of employment relationships, just as parties coming together to establish a contract in accordance with legal freedom, the mutual termination of such a contract through the convergence of the parties' wills should also be considered a natural consequence within the scope of contractual freedom as stipulated in Article 48 of the Constitution. [3]
The termination of an employment contract can occur through a unilateral declaration of intent—referred to as rescission. However, the mutual rescission agreement differs from termination in that it involves the conclusion of a new contract aimed at dissolving the existing employment contract based on mutual declarations of intent. While termination constitutes a unilateral right that results in a disruptive innovation, the mutual rescission agreement is an atypical contract that results in a bilateral disruptive innovation. The Court of Cassation also acknowledges that the mutual rescission agreement is based on mutual declarations of intent and, by its nature, does not constitute a form of termination. [4]
2.2- Legal Nature of the Mutual Rescission Agreement
The mutual rescission agreement is a contract that, based on mutual declarations of intent, results in the termination of a legal relationship and constitutes a bilateral disruptive innovation. As the termination of an established contract occurs through mutual agreement, the creditor relinquishes their claim or satisfies it as specified within the mutual rescission agreement, while the debtor is released from their obligation. In any case, the complete extinguishment of mutual obligations and the termination of the employment relationship through the mutual rescission agreement essentially constitute a disposition transaction for both parties. [5]
As a disposition transaction, the mutual rescission agreement inherently contains a commitment transaction. As a result of the mutual rescission agreement, the employee ceases their obligation to perform the work undertaken, while the employer, in return, commits to paying a specified amount to the employee within the scope of the mutual rescission agreement. In practice, it is common for the employer to propose a mutual rescission agreement to the employee, offering a specific payment in exchange for the termination of the employment contract. In the presence of a reasonable benefit, the consideration of the mutual rescission agreement may not necessarily involve the employee obtaining a specific payment for the termination of the employment contract. Instead, it may include the employee accepting the termination to transition to a better job, the waiver of the notice period, or the elimination of non-competition clauses—benefits that are not purely monetary. The fundamental criterion for the validity of the mutual rescission agreement is the reasonable benefit provided to the employee within the scope of the agreement.
2.3- Distinction of the Mutual Rescission Agreement from Similar Contracts
The rescission of an employment contract may occur through mutual agreement between the employee and employer, death, rescission scenarios specified under the Labor Law No. 1475, or termination cases outlined in the Labor Law No. 4857. Situations where the employment contract is terminated by a unilateral declaration of intent by one of the parties or through a settlement between the parties will also be examined under this section alongside the mutual rescission agreement.
2.3.1- Difference Between Rescission and Termination
Termination is, in principle, a unilateral right that results in a disruptive innovation. When an employment contract is terminated by the employee or employer, the termination becomes effective once the declaration of intent reaches the opposing party’s sphere of control, giving rise to rights related to termination. [6]
The most fundamental difference between termination and rescission lies in the declarations of intent. While termination is a unilateral right that produces a disruptive innovation, becoming effective once the declaration reaches the opposing party, a mutual rescission agreement is a contract that results in a disruptive innovation but is based on mutual agreement and converging declarations of intent. It results in the elimination of rights and obligations of the employment contract through a new mutual agreement.
To establish a mutual rescission agreement, compatible declarations of intent from both parties are necessary. In this context, the party making the offer must present it, and the other party must accept the offer directed at them. In contrast, since termination is a unilateral declaration, it does not depend on the acceptance of the opposing party.
While the termination provisions within the Labor Law No. 4857 are regulated in accordance with the principle of interpreting in favor of the employee, the rescission agreement, being an atypical contract, has not found a place within statutory regulation. However, this does not imply that the rescission agreement contradicts the validity conditions of a contract as stipulated by the Turkish Code of Obligations, nor does it allow for deviation from the relatively mandatory provisions that favor the employee.
2.3.2- Difference Between Rescission and Release
The release, as regulated under Article 132 of the Turkish Code of Obligations (TBK), shows significant similarities with rescission. A release is defined as the mutual agreement of the parties to partially or completely eliminate an existing debt relationship.
Although rescission and release are quite similar in terms of their formation and the concurrence of intent, they ultimately differ in terms of their outcomes. A release aims to partially or completely terminate a debt within an existing relationship without intending to eliminate the relationship entirely. In contrast, a rescission agreement is a disruptive contract designed to entirely nullify an existing agreement based on the mutual intent of the parties. [7] In this context, the termination of the legal relationship as a whole is achieved through rescission, while the partial or complete termination of the debt relationship in a narrower sense is realized through release.
2.3.3- Difference Between Rescission and Waiver
A waiver, as defined under the Code of Civil Procedure, is a procedural act whereby a party relinquishes an acquired right. A waiver can take place after the right has arisen, and it may be exercised either before initiating a lawsuit or after filing one. A waiver manifests as a unilateral declaration of intent and does not depend on the consent of the opposing party.
In contrast, a rescission agreement is a bilateral termination contract established through mutual consent with the purpose of completely nullifying an existing agreement along with all associated rights and obligations. The fundamental difference between rescission and waiver lies in their reliance on mutual consent and the effects they produce. [8]
3- FORMATION OF THE RESCISSION AGREEMENT
3.1- Expression of Intent, Offer, and Acceptance
According to Article 1 of the Turkish Code of Obligations No. 6098, a contract is formed when parties with legal capacity mutually express their compatible wills. In the context of employment contracts, the formation of a rescission agreement also occurs through mutual expressions of intent between the employee and the employer, in line with the general regulation, with the intention to terminate the employment contract. The expression of intent may be explicit or implicit.
While the intent to form a mutual rescission agreement may be either explicit or implicit, the Court of Cassation acknowledges the necessity of evaluating whether there is a defect in the employee’s intent and whether situations that may impair intent should be considered, given the need to protect the employee. In cases where the mutual rescission agreement is drawn up with a reservation of objection, the Court of Cassation has ruled that the reservation made by the employee constitutes a defect in intent, rendering the entire rescission agreement invalid, and that the termination of the employment contract should be regarded as a unilateral termination by the employer. [9]
The intent to form a mutual rescission agreement for the termination of an established employment contract is communicated by either the employee or the employer to the other party. This initial communication is referred to as an "offer" or "proposal." In response to this proposal, the attitude and positive feedback of the other party will be considered as "acceptance." The proposal to form a rescission agreement can be communicated by both the employee and the employer to the other party. Both the offer and the acceptance can be expressed explicitly, but it is also possible for them to be communicated implicitly and similarly accepted implicitly.
For a rescission agreement to be formed, the proposal must include the essential element of the contract. [10] Considering that the essential element of the rescission agreement is the termination of the contract between the employee and the employer and the elimination of all its consequences, the proposal made must at least communicate this situation to the other party. [11] Other secondary elements, aside from the essential element, may be regulated by the parties under Article 2 of the Turkish Code of Obligations. As the mutual rescission agreement is an atypical contract, it is foreseen that the declaration of termination, which is the essential element, be communicated through the proposal, while secondary elements can be regulated within the framework of the law. However, as will be discussed below, the concept of reasonable benefit, although a secondary element, has become a substantive element through Court of Cassation practices and is evaluated as part of the validity conditions.
It is possible for the proposal to be made subject to a specific period. In such a case, if the declaration of acceptance is not communicated within the given period, the proposer will no longer be bound by the proposal. When the proposal is made between parties who are present, if the other party does not accept it immediately, the proposer’s obligation to adhere to the proposal will end, regardless of any specified period.
3.2- Capacity and Form
3.2.1- Capacity
A person acquires legal capacity from the moment they are conceived, provided they are born alive and fully formed. Legal capacity essentially means the ability of a person to hold rights and obligations. In the case of legal entities, legal capacity is deemed to be acquired from the moment the entity is established according to the laws governing its legal personality.
For a mutual rescission agreement to be formed, the parties must possess not only legal capacity but also capacity to act. Capacity to act is regulated under Article 9 of the Turkish Civil Code and is classified into four categories: fully competent, fully incompetent, partially competent, and partially incompetent individuals. To establish a mutual rescission agreement, a natural or legal person possessing legal capacity must also have full capacity to act.
Lastly, in addition to legal capacity and capacity to act, the party entering into the mutual rescission agreement must also have the capacity to dispose. In the case of natural persons, it is assumed that the capacity to dispose exists as long as the person is a natural person and possesses capacity to act. In contrast, for legal entities to be considered as having the capacity to dispose, the mutual rescission agreement must be signed by an authorized signatory of the legal entity. [12]
Otherwise, the lack of capacity to dispose would render the agreement invalid.
3.2.2- Form
As a rule, the means by which a proposal and its acceptance are expressed to establish a contract also determine the form of the contract. In our legal system, contracts can be established either in written or oral form.
The Turkish Code of Obligations and other legislation related to contracts specify certain agreements that must be made in writing. However, for atypical contracts that are not regulated within statutory provisions, the principle of freedom of form applies under general rules. This means that the formation of such contracts is not subject to a written form requirement and can be established orally. Indeed, Article 8 of the Labor Law No. 4857 defines the employment contract and does not impose a written form requirement.
The mutual rescission agreement, being an atypical contract, is essentially subject to the principle of freedom of form and can be established either in writing or orally, as considered in the legal doctrine. [13] Nevertheless, despite the freedom of form, it is also argued in the doctrine that the agreement should be made in writing to protect the mutual interests of the parties. [14] One of the prevailing views in the doctrine suggests that the provision of the Turkish Code of Obligations, which requires the release agreement to be in writing due to its similar consequences, should also apply to rescission agreements by analogy. Consequently, it is argued that rescission agreements should be subject to a written form requirement through analogy. [15] Astarlı, however, argues that even if there is a legal gap that could be filled by analogy, it would be erroneous for the judge to fill this gap solely based on the principle of interpretation. Since the mutual rescission agreement fundamentally aims to terminate an employment relationship and is intended to end a contract subject to labor law, the principle of interpreting in favor of the employee must be considered. Therefore, in the context of the atypical mutual rescission agreement, it would not be incorrect, in my opinion, for the judge to fill the legal gap regarding the form requirement by interpreting it in favor of the employee and thereby imposing a written form requirement.
4- SUPERVISION OF THE MUTUAL RESCISSION AGREEMENT
4.1- Supervision in Terms of General Provisions
A contract established under the provisions of the Turkish Code of Obligations is subject to scrutiny in terms of its content as required by law. A contract cannot be formed in a manner contrary to the law, morality, or public order, and if it is based on a defect of intent, it may be deemed invalid or absolutely null and void.
Since a mutual rescission agreement signed between an employee and an employer is essentially an atypical contract governed by the Turkish Code of Obligations, it cannot be drafted in violation of Article 27 of the Turkish Code of Obligations. If the contract is formulated contrary to mandatory legal provisions, it will be considered invalid due to non-compliance with the validity conditions.
Another issue to be addressed in terms of general provisions is lesion. As regulated under the Turkish Code of Obligations, lesion refers to a situation where one party suffers from a significant imbalance in the contract due to their lack of knowledge or experience. In the context of labor law, if the employee—being the weaker party—signs a mutual rescission agreement under conditions of evident imbalance, driven by the need to promptly receive their dues or due to financial necessity, lesion may be considered applicable. [16] For lesion to be acknowledged, both its objective and subjective conditions must be met. The objective condition of lesion is the presence of a visibly significant imbalance between the mutual performances. [17] The subjective condition, on the other hand, arises when this imbalance is caused by the lack of knowledge or experience of the disadvantaged party. [18]
4.2- Mistake, Fraud, and Coercion
4.2.1- Mistake
A mistake, in its simplest form, represents a situation where the outcome that emerges does not align with the intention of the declaring party. For a mistake made during the formation of a contract to render the contract invalid, it must constitute a fundamental mistake.
When a discrepancy arises between the declared statement and the actual intention without any deliberate act, it is considered a mistake in declaration. Situations constituting a mistake in declaration are listed in Article 31 of the Turkish Code of Obligations. [19] The listed cases are illustrative rather than exhaustive. To be considered invalid due to a mistake, the situation arising from the mistake in declaration must constitute a fundamental mistake as required by law. Otherwise, it would not be possible to claim the rescission agreement’s invalidity on the grounds of mistake [20]. Fundamental mistakes are evaluated on a case-by-case basis and are not exhaustively specified in the law. For instance, if the severance pay, which constitutes the employee’s receivable under the mutual rescission agreement, is mistakenly stated in Turkish lira instead of euros, and the resulting difference due to the exchange rate is substantial, this may be considered a fundamental mistake.
Another form of mistake, regulated under Article 32 of the Turkish Code of Obligations, is mistake in motive, which is referred to as an error concerning the fundamental basis of the contract. Although mistake in motive is not considered a fundamental mistake as per legal regulations, its recognition as a fundamental mistake is subject to certain conditions. If the mistaken party regards this error as fundamental to the contract, and this perception aligns with the principle of good faith, mistake in motive may be deemed a fundamental mistake. In the context of a rescission agreement, if the severance pay of the employee is not included while other employment-related claims are covered, merely claiming mistake in motive and asserting that it constitutes a fundamental mistake is not deemed sufficient. [21]
The final form of mistake regulated by law is mistake in transmission. This typically arises when conditions are communicated differently due to a translation error. For example, in a multinational company, if the salary is conveyed differently from the original offer due to a translator's mistake, this would constitute a mistake in transmission.
4.2.2- Fraud
In the context of a contract, when one party's intentional actions lead to the manipulation of the other party's will or cause them to make a significant mistake in their motive, this is defined as fraud or deception. [22] Fraudulent behavior can manifest through an action being performed, or, in some cases, through the failure to act (omission). Since fraud is an intentional act, unlike the mistake in motive, it does not require the presence of a substantial error in this context.
Deception can be carried out by one of the parties to the contract, or it can be the result of an action by a third party. In cases where fraudulent behavior is carried out by a third party, for the rescission of the contract to be discussed, the fraudulent behavior must be known to the party to whom the imbalance favors. [23] Whether the fraudulent behavior is carried out by a third party or one of the parties to the contract, for the contract to be annulled, this behavior must have been intentionally performed, and the contract must have already been formed. [24]
4.2.3- Coercion
Coercion refers to the situation where a party's will is impaired due to the threat of harm, whether physical or emotional, being inflicted upon themselves or a close relative if the contract is not made. Unlike fraud, the mere occurrence of coercion is sufficient to invalidate the will, without the need for a substantial mistake. When coercion is based on a psychological phenomenon, the contract will be considered invalid due to an impairment of the will. However, if the coercion involves a material fact, the absence of willpower will be recognized, and the contract will be considered as never having been formed.
In labor law, the manifestation of coercion typically revolves around statements that wages, including labor receivables, will not be paid if the termination agreement is not signed. The employee, who is in a weaker position compared to the employer, may feel compelled to sign the agreement presented to them in order to receive their labor-related receivables, or may be forced to sign the agreement due to this threat. There is no consensus in the literature regarding this issue. Some authors argue that since the employee can collect their receivables through legal means, such as filing a lawsuit against the employer, the statement that the wages will not be paid cannot be considered mere coercion. [25] On the other hand, some authors contend that the non-payment of wages and labor receivables, being a fundamental obligation of the employer in the employment contract, constitutes a threat to the employee's property, thereby fulfilling the conditions for coercion. [26]
4.3- Judicial Criteria Used for Review
The mutual rescission agreement is an atypical contract under the law. Although it is subject to general provisions regarding its formation and validity conditions, due to its atypical nature, there are certain validity conditions that have found a place in the case law of the Court of Cassation. These conditions are discussed under three main headings in this work.
4.3.1- Reasonable Benefit
The grounds for termination of employment contracts are specified in the Labor Law No. 1475 and also in the Labor Law No. 4857. However, the mutual rescission agreement, which is a new agreement that removes the full effects of the contract through mutual consent, does not result in termination. In this way, the mutual rescission agreement, which does not mean termination, completely eliminates the employment contract, but also prevents the employee from exercising their rights related to termination. Rights associated with termination, such as severance pay, notice pay, and other employment-related claims [27], as well as the right to request reinstatement after an invalid termination within the scope of job security [28], will be eliminated with the mutual rescission agreement. This situation has led to the emergence of certain case law from the Court of Cassation concerning the validity of the termination agreement, arising from the need to protect the employee.
The side from which the mutual rescission agreement is presented is important, although in practice, it is frequently observed that this offer is made by the employer to the employee.
In such cases, the Court of Cassation evaluates the existence of a reasonable benefit or, in other words, an additional advantage to be provided to the employee, alongside employment-related claims, as a condition for the validity of the mutual rescission agreement. [29] In practice, the reasonable benefit that must be provided to the employee in the termination offer made by the employer is evaluated on a case-by-case basis, but it is generally accepted that a mutual rescission agreement consisting solely of the settlement of employment-related claims is not valid. In a similar case, the Court of Cassation ruled that the payment of severance and notice pay to the employee in the mutual rescission agreement was insufficient, and that at least the equivalent of four months' salary should be provided as a reasonable benefit, and that a mutual rescission agreement based solely on severance and notice pay would be considered invalid due to a lack of reasonable benefit. [30] In another case, it was ruled that the employee, who was a sales manager, had the capacity to understand the consequences of the proposed mutual rescission agreement and that the two months of additional pay offered to him, alongside his employment-related claims, was within reasonable benefit limits, thus making the mutual rescission agreement valid. [31] As shaped by practice, the content of the reasonable benefit in the mutual rescission agreement, the side from which the offer is made, and the circumstances of the specific case determine its validity. [32]
Another issue that arises regarding reasonable benefit is whether the unemployment benefits the employee will receive as a result of the notification enabling them to qualify for unemployment insurance can be considered as part of the reasonable benefit. A mutual rescission agreement is generally not a termination process. The conditions under which an employee is entitled to unemployment benefits are specified in the Unemployment Insurance Law No. 4447. In this context, if the employer carries out the termination procedure with exit code 4, or if the employee terminates the contract due to compulsory reasons under exit code 23, and the other conditions are met, the employee will be entitled to unemployment benefits. However, since the mutual rescission agreement is a contract based on mutual consent and constitutes a contractual act that creates a new situation, it is not considered a termination process, and therefore, the exit codes listed under the termination procedure cannot be reported in this context. Nevertheless, the employer can unilaterally report this exit code to the institution in a way that enables the employee to receive unemployment benefits. However, this may lead to the employer's liability due to an inaccurate declaration. Since the process does not constitute an additional financial burden for the employer or direct financial compensation for the employee, and it poses a legal issue, the reporting of the exit code for the purpose of obtaining unemployment benefits cannot be considered as an additional benefit provided to the employee. Thus, it cannot be stated that the employer has provided a reasonable benefit in this case.
The additional benefit or reasonable advantage mentioned above applies when the termination offer is made by the employer. In cases where the termination offer is made by the employee to the employer, the Court of Cassation accepts that if the employee is able to comprehend the meaning and consequences of the termination, and the offer is made with the knowledge of its outcome, the existence of reasonable benefit will no longer be required. [33]
4.3.2- Compliance with The Ordinary Course of Life
The expression "compliance with the ordinary course of life" does not have a precise definition within the legal system, but it is a validity condition that has been recognized in the case law of the Court of Cassation. At its core, compliance with the ordinary course of life refers to a situation that can be reasonably accepted in everyday life, something that can be explained within the realms of reason and logic.
This expression, which frequently appears in labor law, is also considered as one of the validity conditions for judicial review within the context of the mutual rescission agreement. Along with reasonable benefit, this concept is assessed on a case-by-case basis for each individual situation. Factors such as the worker's seniority and the manner in which the employment contract is terminated are evaluated separately in each employment relationship, and the validity of the mutual rescission agreement is assessed within the ordinary course of life. For instance, in labor law, it is considered contrary to the ordinary course of life for a worker with long-term employment to leave their job through a mutual rescission agreement while disregarding severance pay and other employment-related benefits. [34] In another ruling, the Court of Cassation found that when a worker who had resigned via a mutual rescission agreement but received severance pay filed a lawsuit for reinstatement 19 days later, the resignation by termination agreement was deemed contrary to the ordinary course of life, and the termination agreement was declared invalid, with the worker’s dismissal considered unjustified. [35] Similarly, the Court of Cassation ruled that it was contrary to the ordinary course of life for a worker with 9 years of service to have their employment contract terminated via a mutual rescission agreement without receiving any additional benefit. [36]
4.3.3- Reservation Clause
The term "ihtirazı kayıt" (reservation clause), which has its origins in Ottoman Turkish, essentially refers to a reservation or exception made during the performance of an obligation within a debtor-creditor relationship. [37] In the context of a mutual rescission agreement, a mutual rescission agreement with a reservation clause would be considered invalid, as it introduces a defect in the mutual consent of the parties and cannot be made conditional. In a similar case, a mutual rescission agreement signed by the worker on the condition of receiving their legal rights, with the payment of employment claims being subject to the signing of the agreement, was ruled invalid. [38]
5- CONCLUSION
A mutual rescission agreement is a contract that, by its nature, terminates an existing legal relationship in all its consequences, based on mutual consent, and is a contract that brings about a disruptive innovation. The “mutual rescission agreement,” which has been used in commercial relationships since ancient times, has found its place in our legal system and continues to be used as a way to terminate reciprocal contracts that impose obligations on both parties.
The mutual rescission agreement has also found its place in labor law due to its consequences. Unlike the termination provisions regulated in Articles 24 and 25 of the Labor Law No. 4857, and the termination cases listed in Article 14 of the Labor Law No. 1475, a mutual rescission agreement refers to the mutual and compatible declarations of intent by the employee and employer to terminate the employment contract along with all its consequences. In this sense, the mutual rescission agreement differs from the termination provisions. While it resembles a release agreement, the mutual rescission agreement differs from a release agreement in terms of its broader impact. A release agreement only leads to the partial or complete elimination of an existing debt right, whereas a mutual rescission agreement is a new disruptive contract that fully eliminates an existing contract.
A mutual rescission agreement can be established between two or more natural or legal persons who have the capacity to exercise rights and perform acts. The mutual agreement of the parties, in line with their intentions, depends on the acceptance of an offer made by one party by the other party. Although the mutual rescission agreement is an atypical contract and the requirement for it to be in writing is not considered a condition for validity, it is accepted, particularly in labor law, that it should be in writing for the ease of proof and to ensure the identification of the parties' interests.
In labor law, the validity conditions of the “mutual rescission agreement,” which is a disruptive and atypical contract, have been determined through judicial precedents. For this type of contract, which does not have a legal regulation, the first thing to establish is whether the “rescission offer” was made by the employer or by the employee. This is because, for the mutual rescission agreement proposed by the employer to be valid, not only must the employee's labor claims be settled, but the employee must also be provided with a reasonable benefit. What constitutes a reasonable benefit is assessed differently in each specific case. In the case where the rescission is made by the employee, the Court of Cassation has ruled that a reasonable benefit is not required, and it is accepted that the employee knowingly and willingly proposes the conditions of the rescission to the other party.
Other factors affecting the validity of the mutual rescission agreement include ensuring conformity with the ordinary course of life and the absence of a reservation of rights. Conformity with the ordinary course of life is assessed separately in each specific case and considered along with reasonable benefit. It involves examining whether the actions taken are reasonable and logical, considering the employee's seniority and current status. The reservation of rights means that the mutual rescission agreement should not be subject to any conditions; it must be signed unconditionally and with the existence of reasonable benefit and clear mutual consent.
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[1] Sarper Süzek, İş Hukuku, İstanbul 2020, s. 517; Nuri Çelik-Nurşen Caniklioğlu-Talat Canbolat-Ercüment Karaca, Labor Law Courses, İstanbul 2020, pp. 460-461.
[2] For detailed information, see: Mustafa Alp, “İş Hukukunda İkalenin (Bozma Sözleşmesinin) Geçerlilik Koşulları” Legal İş Hukuku ve Sosyal Güvenlik Hukuku Dergisi, 2008, Issue 17, p. 28.
[3] “IV. Freedom of Work and Contract Article 48 – “Everyone has the freedom to work and enter into contracts in any field of their choice. Establishing private enterprises is free. The state takes the necessary measures to ensure that private enterprises operate in accordance with the requirements of the national economy and social objectives, and to ensure they operate in safety and stability.”
[4] Supreme Court 9th Civil Chamber, 2007/26232 E, 2008/5313 K, 18.03.2008 T; “…The mutual agreement of the worker and employer on termination does not constitute a termination. Although this type of termination is not included in the Labor Law, a statement (offer) made by one party to the other regarding the mutual termination of the employment contract, followed by the acceptance of the other party, forms a termination agreement (ikale). In the termination agreement, the offer aims to end the employment relationship through the other party's acceptance of the appropriate declaration of intent. For this reason, the offer made for the termination agreement cannot be evaluated as a termination and cannot be converted into one ( Kılıçoğlu/Şenocak: İş Güvencesi Hukuku, İstanbul 2007 p. 99 )…”
[5] Muhittin Astarlı, İş Hukukunda İkale (Bozma) Sözleşmesi, Ankara 2013, p. 30; Fikret Eren, Borçlar Hukuku, Genel Hükümler, Ankara 2012, pp. 174-175.
[6] Astarlı, p. 36.
[7] Ufuk Aydın, “İş Sözleşmesinin Anlaşma ile Sona Erdirilmesi” Çimento İşveren Dergisi, M 2004, Issue 3, Vol.18, p. 5
[8] Gülsevil Alpagut, “İş Sözleşmesinin Sona Ermesine İlişkin Sözleşmesel Kayıtlar ve Sözleşmenin Tarafların Anlaşmasıyla Sona Ermesi (İkale Sözleşmesi)” 11th Meeting on Labor and Social Security Law, June 8-9, 2007, İstanbul Barosu Yayınları, İstanbul 2008, p. 45.
[10] İsmail Kayar, 6098 Sayılı Türk Borçlar Kanunu’na Göre Borçlar Hukuku Genel Hükümleri, Ankara 2019, p. 58.
[11] Astarlı, p. 61.
[12] Ali Hasan Özyörük, İkale Sözleşmesi, Ankara 2019, s.166; Hasan Nüvit Gerek, “İş Sözleşmesinin İkale Sözleşmesi ile Sona Ermesi”, Çalışma ve Toplum Dergisi, 2011, Issue 4, p. 46.
[13] Aydın, p. 6
[14] Çelik/Caniklioğlu/Canbolat/Karaca, p. 461.
[15] Astarlı, p. 119.
[16] Kayar, pp. 93-94.
[17] Kemal Oğuzman/Turgut Öz, Borçlar Hukuku Genel Hükümler, İstanbul 2020, p. 142.
[18] Oğuzman/Öz, pp. 143-144.
[19] a. Mistake in Declaration ARTICLE 31- The following mistakes, in particular, are considered fundamental: 1. If the mistaken party has expressed their intention for a contract different from the one they intended to establish. 2. If the mistaken party has expressed their intention regarding a subject other than the one they intended. 3. If the mistaken party has expressed their intention to conclude a contract with someone other than the person they actually intended.4. If the mistaken party has considered a specific individual with particular qualities while concluding the contract but has expressed their intention for another person.5. If the mistaken party has expressed their intention for a performance significantly greater than what they intended to undertake or for a consideration significantly less than what they intended to receive. Simple calculation errors do not affect the validity of the contract; correction of such errors suffices.
[20] Astarlı, p. 169.
[21] Astarlı, p. 171.
[22] Oğuzman/Öz, pp. 114-115.
[23] Oğuzman/Öz, p. 118.
[24] Astarlı, p. 174.
[25] Astarlı, p. 204; Berna Duman, Türk İş Hukukunda İkale, Ankara 2020, p. 73.
[26] Özyörük, p. 274.
[27] Mehmet Nusret Bedük, “İş Sözleşmesinin İşçi Tarafından Feshi ve Feshin Hukuki Sonuçları” Selçuk University Faculty of Law Journal, 2019, p. 702.
[28] Alp, p. 28-30.
[29] For precedent decisions, see: Supreme Court 22nd Civil Chamber, 2013/37045 E, 2014/3 K, 13.01.2014 T; Supreme Court 9th Civil Chamber, 2016/33229 E, 2018/150 K, 15.01.2018 T; Supreme Court 9th Civil Chamber, 2017/23432 E, 2018/8361 K, 11.04.2018 T. (Kazancı İçtihat).
[30] Supreme Court 9th Civil Chamber, 2015/27647 E, 2016/7838 K, 30.03.2016 T. (Kazancı İçtihat).
[31] Supreme Court 9th Civil Chamber, 2016/29473 E, 2017/17057 K, 31.10.2017 T. (Kazancı İçtihat).
[32] Süzek, s. 518-519.
[33] Supreme Court 22nd Civil Chamber, 2017/20595 E, 2017/7654 K, 04.04.2017 T; Y9HD, 2016/10467 E, 2017/7076 K, 24.04.2017 T; Y9HD, 2016/9742 E, 2017/6153 K, 06.04.2017 T. (Kazancı İçtihat).
[34] Supreme Court 7th Civil Chamber, 2015/1821 E, 2015/10851 K, 02.06.2015 T. (Kazancı içtihat).
[35] Supreme Court 9th Civil Chamber, 2017/24768 E, 2018/11605 K, 23.05.2018 T. (Kazancı İçtihat).
[36] Supreme Court 9th Civil Chamber, 2017/21961 E, 2018/6119 K, 22.03.2018 T. (Kazancı İçtihat).
[38] Supreme Court 22nd Civil Chamber, 2017/36294 E, 2017/18735 K, 21.09.2017 T; See also: Supreme Court 9th Civil Chamber, 2016/34336 E, 2018/747 K, 22.01.2018 T: “…In the present dispute, although the court accepted that the plaintiff's employment contract was terminated by the defendant in accordance with the termination agreement (ikale agreement) and that reasonable benefit was provided to the plaintiff, making the agreement valid, it is understood that a protocol dated 29.02.2016 was signed between the defendant and the plaintiff regarding the termination of the employment contract by mutual agreement. According to this protocol, it was agreed to pay the plaintiff a total of 107,834 TRY as annual leave pay, severance pay, and an additional payment. However, the plaintiff explicitly added a reservation to the ikale agreement by writing “I sign with the reservation of all my legal rights” at the bottom of the protocol. In this case, it is evident that there can be no talk of mutual consent between the parties. It has been established that the employer terminated the plaintiff's employment contract, and since no written notice of valid termination was presented by the employer, the termination is invalid solely for this reason pursuant to Article 19 of Labor Law No. 4857…” (Kazancı İçtihat).
1- INTRODUCTION
The mutual rescission agreement, despite not being explicitly regulated by law, has maintained its validity within our legal system since the provisions of the Mecelle, establishing itself as a contract that results in the termination of existing legal relations. As per its definition, mutual rescission agreement is an atypical contract that eliminates all effects of a previously established contract through mutual consent.
Although the mutual rescission agreement originally emerged from the provisions of the Mecelle, primarily in the context of commercial sales contracts, it has also found a place within labor law. In practice, it is an atypical contract frequently utilized by employers. Despite the lack of explicit legal regulation, its form and boundaries have been shaped through judicial decisions, particularly by the Court of Cassation.
This article will address the definition and legal characterization of the mutual rescission agreement, its differences from other termination methods with similar characteristics, its formation, and its judicial review.
2- DEFINITION, LEGAL NATURE, AND DISTINCTION OF THE MUTUAL RESCISSIONAGREEMENT
2.1- Definition of the Mutual Rescission Agreement
The term “ikale” originates from Arabic and denotes the rescission of a contract. In the Mecelle, the term ikale is commonly used to signify the rescission of commercial sales relationships. Although the concept of ikale is not explicitly regulated within legal statutes, it has continued to be utilized in practice as the termination of a relationship through mutual agreement.
Despite the absence of statutory regulation, a mutual rescission agreement can be defined as the creation of a new contract aimed at dissolving an existing legal relationship through mutual declarations of intent, in accordance with the principle of contractual freedom. [1] Due to its nature, the mutual rescission agreement is classified as an atypical contract. [2]
In the context of employment relationships, just as parties coming together to establish a contract in accordance with legal freedom, the mutual termination of such a contract through the convergence of the parties' wills should also be considered a natural consequence within the scope of contractual freedom as stipulated in Article 48 of the Constitution. [3]
The termination of an employment contract can occur through a unilateral declaration of intent—referred to as rescission. However, the mutual rescission agreement differs from termination in that it involves the conclusion of a new contract aimed at dissolving the existing employment contract based on mutual declarations of intent. While termination constitutes a unilateral right that results in a disruptive innovation, the mutual rescission agreement is an atypical contract that results in a bilateral disruptive innovation. The Court of Cassation also acknowledges that the mutual rescission agreement is based on mutual declarations of intent and, by its nature, does not constitute a form of termination. [4]
2.2- Legal Nature of the Mutual Rescission Agreement
The mutual rescission agreement is a contract that, based on mutual declarations of intent, results in the termination of a legal relationship and constitutes a bilateral disruptive innovation. As the termination of an established contract occurs through mutual agreement, the creditor relinquishes their claim or satisfies it as specified within the mutual rescission agreement, while the debtor is released from their obligation. In any case, the complete extinguishment of mutual obligations and the termination of the employment relationship through the mutual rescission agreement essentially constitute a disposition transaction for both parties. [5]
As a disposition transaction, the mutual rescission agreement inherently contains a commitment transaction. As a result of the mutual rescission agreement, the employee ceases their obligation to perform the work undertaken, while the employer, in return, commits to paying a specified amount to the employee within the scope of the mutual rescission agreement. In practice, it is common for the employer to propose a mutual rescission agreement to the employee, offering a specific payment in exchange for the termination of the employment contract. In the presence of a reasonable benefit, the consideration of the mutual rescission agreement may not necessarily involve the employee obtaining a specific payment for the termination of the employment contract. Instead, it may include the employee accepting the termination to transition to a better job, the waiver of the notice period, or the elimination of non-competition clauses—benefits that are not purely monetary. The fundamental criterion for the validity of the mutual rescission agreement is the reasonable benefit provided to the employee within the scope of the agreement.
2.3- Distinction of the Mutual Rescission Agreement from Similar Contracts
The rescission of an employment contract may occur through mutual agreement between the employee and employer, death, rescission scenarios specified under the Labor Law No. 1475, or termination cases outlined in the Labor Law No. 4857. Situations where the employment contract is terminated by a unilateral declaration of intent by one of the parties or through a settlement between the parties will also be examined under this section alongside the mutual rescission agreement.
2.3.1- Difference Between Rescission and Termination
Termination is, in principle, a unilateral right that results in a disruptive innovation. When an employment contract is terminated by the employee or employer, the termination becomes effective once the declaration of intent reaches the opposing party’s sphere of control, giving rise to rights related to termination. [6]
The most fundamental difference between termination and rescission lies in the declarations of intent. While termination is a unilateral right that produces a disruptive innovation, becoming effective once the declaration reaches the opposing party, a mutual rescission agreement is a contract that results in a disruptive innovation but is based on mutual agreement and converging declarations of intent. It results in the elimination of rights and obligations of the employment contract through a new mutual agreement.
To establish a mutual rescission agreement, compatible declarations of intent from both parties are necessary. In this context, the party making the offer must present it, and the other party must accept the offer directed at them. In contrast, since termination is a unilateral declaration, it does not depend on the acceptance of the opposing party.
While the termination provisions within the Labor Law No. 4857 are regulated in accordance with the principle of interpreting in favor of the employee, the rescission agreement, being an atypical contract, has not found a place within statutory regulation. However, this does not imply that the rescission agreement contradicts the validity conditions of a contract as stipulated by the Turkish Code of Obligations, nor does it allow for deviation from the relatively mandatory provisions that favor the employee.
2.3.2- Difference Between Rescission and Release
The release, as regulated under Article 132 of the Turkish Code of Obligations (TBK), shows significant similarities with rescission. A release is defined as the mutual agreement of the parties to partially or completely eliminate an existing debt relationship.
Although rescission and release are quite similar in terms of their formation and the concurrence of intent, they ultimately differ in terms of their outcomes. A release aims to partially or completely terminate a debt within an existing relationship without intending to eliminate the relationship entirely. In contrast, a rescission agreement is a disruptive contract designed to entirely nullify an existing agreement based on the mutual intent of the parties. [7] In this context, the termination of the legal relationship as a whole is achieved through rescission, while the partial or complete termination of the debt relationship in a narrower sense is realized through release.
2.3.3- Difference Between Rescission and Waiver
A waiver, as defined under the Code of Civil Procedure, is a procedural act whereby a party relinquishes an acquired right. A waiver can take place after the right has arisen, and it may be exercised either before initiating a lawsuit or after filing one. A waiver manifests as a unilateral declaration of intent and does not depend on the consent of the opposing party.
In contrast, a rescission agreement is a bilateral termination contract established through mutual consent with the purpose of completely nullifying an existing agreement along with all associated rights and obligations. The fundamental difference between rescission and waiver lies in their reliance on mutual consent and the effects they produce. [8]
3- FORMATION OF THE RESCISSION AGREEMENT
3.1- Expression of Intent, Offer, and Acceptance
According to Article 1 of the Turkish Code of Obligations No. 6098, a contract is formed when parties with legal capacity mutually express their compatible wills. In the context of employment contracts, the formation of a rescission agreement also occurs through mutual expressions of intent between the employee and the employer, in line with the general regulation, with the intention to terminate the employment contract. The expression of intent may be explicit or implicit.
While the intent to form a mutual rescission agreement may be either explicit or implicit, the Court of Cassation acknowledges the necessity of evaluating whether there is a defect in the employee’s intent and whether situations that may impair intent should be considered, given the need to protect the employee. In cases where the mutual rescission agreement is drawn up with a reservation of objection, the Court of Cassation has ruled that the reservation made by the employee constitutes a defect in intent, rendering the entire rescission agreement invalid, and that the termination of the employment contract should be regarded as a unilateral termination by the employer. [9]
The intent to form a mutual rescission agreement for the termination of an established employment contract is communicated by either the employee or the employer to the other party. This initial communication is referred to as an "offer" or "proposal." In response to this proposal, the attitude and positive feedback of the other party will be considered as "acceptance." The proposal to form a rescission agreement can be communicated by both the employee and the employer to the other party. Both the offer and the acceptance can be expressed explicitly, but it is also possible for them to be communicated implicitly and similarly accepted implicitly.
For a rescission agreement to be formed, the proposal must include the essential element of the contract. [10] Considering that the essential element of the rescission agreement is the termination of the contract between the employee and the employer and the elimination of all its consequences, the proposal made must at least communicate this situation to the other party. [11] Other secondary elements, aside from the essential element, may be regulated by the parties under Article 2 of the Turkish Code of Obligations. As the mutual rescission agreement is an atypical contract, it is foreseen that the declaration of termination, which is the essential element, be communicated through the proposal, while secondary elements can be regulated within the framework of the law. However, as will be discussed below, the concept of reasonable benefit, although a secondary element, has become a substantive element through Court of Cassation practices and is evaluated as part of the validity conditions.
It is possible for the proposal to be made subject to a specific period. In such a case, if the declaration of acceptance is not communicated within the given period, the proposer will no longer be bound by the proposal. When the proposal is made between parties who are present, if the other party does not accept it immediately, the proposer’s obligation to adhere to the proposal will end, regardless of any specified period.
3.2- Capacity and Form
3.2.1- Capacity
A person acquires legal capacity from the moment they are conceived, provided they are born alive and fully formed. Legal capacity essentially means the ability of a person to hold rights and obligations. In the case of legal entities, legal capacity is deemed to be acquired from the moment the entity is established according to the laws governing its legal personality.
For a mutual rescission agreement to be formed, the parties must possess not only legal capacity but also capacity to act. Capacity to act is regulated under Article 9 of the Turkish Civil Code and is classified into four categories: fully competent, fully incompetent, partially competent, and partially incompetent individuals. To establish a mutual rescission agreement, a natural or legal person possessing legal capacity must also have full capacity to act.
Lastly, in addition to legal capacity and capacity to act, the party entering into the mutual rescission agreement must also have the capacity to dispose. In the case of natural persons, it is assumed that the capacity to dispose exists as long as the person is a natural person and possesses capacity to act. In contrast, for legal entities to be considered as having the capacity to dispose, the mutual rescission agreement must be signed by an authorized signatory of the legal entity. [12]
Otherwise, the lack of capacity to dispose would render the agreement invalid.
3.2.2- Form
As a rule, the means by which a proposal and its acceptance are expressed to establish a contract also determine the form of the contract. In our legal system, contracts can be established either in written or oral form.
The Turkish Code of Obligations and other legislation related to contracts specify certain agreements that must be made in writing. However, for atypical contracts that are not regulated within statutory provisions, the principle of freedom of form applies under general rules. This means that the formation of such contracts is not subject to a written form requirement and can be established orally. Indeed, Article 8 of the Labor Law No. 4857 defines the employment contract and does not impose a written form requirement.
The mutual rescission agreement, being an atypical contract, is essentially subject to the principle of freedom of form and can be established either in writing or orally, as considered in the legal doctrine. [13] Nevertheless, despite the freedom of form, it is also argued in the doctrine that the agreement should be made in writing to protect the mutual interests of the parties. [14] One of the prevailing views in the doctrine suggests that the provision of the Turkish Code of Obligations, which requires the release agreement to be in writing due to its similar consequences, should also apply to rescission agreements by analogy. Consequently, it is argued that rescission agreements should be subject to a written form requirement through analogy. [15] Astarlı, however, argues that even if there is a legal gap that could be filled by analogy, it would be erroneous for the judge to fill this gap solely based on the principle of interpretation. Since the mutual rescission agreement fundamentally aims to terminate an employment relationship and is intended to end a contract subject to labor law, the principle of interpreting in favor of the employee must be considered. Therefore, in the context of the atypical mutual rescission agreement, it would not be incorrect, in my opinion, for the judge to fill the legal gap regarding the form requirement by interpreting it in favor of the employee and thereby imposing a written form requirement.
4- SUPERVISION OF THE MUTUAL RESCISSION AGREEMENT
4.1- Supervision in Terms of General Provisions
A contract established under the provisions of the Turkish Code of Obligations is subject to scrutiny in terms of its content as required by law. A contract cannot be formed in a manner contrary to the law, morality, or public order, and if it is based on a defect of intent, it may be deemed invalid or absolutely null and void.
Since a mutual rescission agreement signed between an employee and an employer is essentially an atypical contract governed by the Turkish Code of Obligations, it cannot be drafted in violation of Article 27 of the Turkish Code of Obligations. If the contract is formulated contrary to mandatory legal provisions, it will be considered invalid due to non-compliance with the validity conditions.
Another issue to be addressed in terms of general provisions is lesion. As regulated under the Turkish Code of Obligations, lesion refers to a situation where one party suffers from a significant imbalance in the contract due to their lack of knowledge or experience. In the context of labor law, if the employee—being the weaker party—signs a mutual rescission agreement under conditions of evident imbalance, driven by the need to promptly receive their dues or due to financial necessity, lesion may be considered applicable. [16] For lesion to be acknowledged, both its objective and subjective conditions must be met. The objective condition of lesion is the presence of a visibly significant imbalance between the mutual performances. [17] The subjective condition, on the other hand, arises when this imbalance is caused by the lack of knowledge or experience of the disadvantaged party. [18]
4.2- Mistake, Fraud, and Coercion
4.2.1- Mistake
A mistake, in its simplest form, represents a situation where the outcome that emerges does not align with the intention of the declaring party. For a mistake made during the formation of a contract to render the contract invalid, it must constitute a fundamental mistake.
When a discrepancy arises between the declared statement and the actual intention without any deliberate act, it is considered a mistake in declaration. Situations constituting a mistake in declaration are listed in Article 31 of the Turkish Code of Obligations. [19] The listed cases are illustrative rather than exhaustive. To be considered invalid due to a mistake, the situation arising from the mistake in declaration must constitute a fundamental mistake as required by law. Otherwise, it would not be possible to claim the rescission agreement’s invalidity on the grounds of mistake [20]. Fundamental mistakes are evaluated on a case-by-case basis and are not exhaustively specified in the law. For instance, if the severance pay, which constitutes the employee’s receivable under the mutual rescission agreement, is mistakenly stated in Turkish lira instead of euros, and the resulting difference due to the exchange rate is substantial, this may be considered a fundamental mistake.
Another form of mistake, regulated under Article 32 of the Turkish Code of Obligations, is mistake in motive, which is referred to as an error concerning the fundamental basis of the contract. Although mistake in motive is not considered a fundamental mistake as per legal regulations, its recognition as a fundamental mistake is subject to certain conditions. If the mistaken party regards this error as fundamental to the contract, and this perception aligns with the principle of good faith, mistake in motive may be deemed a fundamental mistake. In the context of a rescission agreement, if the severance pay of the employee is not included while other employment-related claims are covered, merely claiming mistake in motive and asserting that it constitutes a fundamental mistake is not deemed sufficient. [21]
The final form of mistake regulated by law is mistake in transmission. This typically arises when conditions are communicated differently due to a translation error. For example, in a multinational company, if the salary is conveyed differently from the original offer due to a translator's mistake, this would constitute a mistake in transmission.
4.2.2- Fraud
In the context of a contract, when one party's intentional actions lead to the manipulation of the other party's will or cause them to make a significant mistake in their motive, this is defined as fraud or deception. [22] Fraudulent behavior can manifest through an action being performed, or, in some cases, through the failure to act (omission). Since fraud is an intentional act, unlike the mistake in motive, it does not require the presence of a substantial error in this context.
Deception can be carried out by one of the parties to the contract, or it can be the result of an action by a third party. In cases where fraudulent behavior is carried out by a third party, for the rescission of the contract to be discussed, the fraudulent behavior must be known to the party to whom the imbalance favors. [23] Whether the fraudulent behavior is carried out by a third party or one of the parties to the contract, for the contract to be annulled, this behavior must have been intentionally performed, and the contract must have already been formed. [24]
4.2.3- Coercion
Coercion refers to the situation where a party's will is impaired due to the threat of harm, whether physical or emotional, being inflicted upon themselves or a close relative if the contract is not made. Unlike fraud, the mere occurrence of coercion is sufficient to invalidate the will, without the need for a substantial mistake. When coercion is based on a psychological phenomenon, the contract will be considered invalid due to an impairment of the will. However, if the coercion involves a material fact, the absence of willpower will be recognized, and the contract will be considered as never having been formed.
In labor law, the manifestation of coercion typically revolves around statements that wages, including labor receivables, will not be paid if the termination agreement is not signed. The employee, who is in a weaker position compared to the employer, may feel compelled to sign the agreement presented to them in order to receive their labor-related receivables, or may be forced to sign the agreement due to this threat. There is no consensus in the literature regarding this issue. Some authors argue that since the employee can collect their receivables through legal means, such as filing a lawsuit against the employer, the statement that the wages will not be paid cannot be considered mere coercion. [25] On the other hand, some authors contend that the non-payment of wages and labor receivables, being a fundamental obligation of the employer in the employment contract, constitutes a threat to the employee's property, thereby fulfilling the conditions for coercion. [26]
4.3- Judicial Criteria Used for Review
The mutual rescission agreement is an atypical contract under the law. Although it is subject to general provisions regarding its formation and validity conditions, due to its atypical nature, there are certain validity conditions that have found a place in the case law of the Court of Cassation. These conditions are discussed under three main headings in this work.
4.3.1- Reasonable Benefit
The grounds for termination of employment contracts are specified in the Labor Law No. 1475 and also in the Labor Law No. 4857. However, the mutual rescission agreement, which is a new agreement that removes the full effects of the contract through mutual consent, does not result in termination. In this way, the mutual rescission agreement, which does not mean termination, completely eliminates the employment contract, but also prevents the employee from exercising their rights related to termination. Rights associated with termination, such as severance pay, notice pay, and other employment-related claims [27], as well as the right to request reinstatement after an invalid termination within the scope of job security [28], will be eliminated with the mutual rescission agreement. This situation has led to the emergence of certain case law from the Court of Cassation concerning the validity of the termination agreement, arising from the need to protect the employee.
The side from which the mutual rescission agreement is presented is important, although in practice, it is frequently observed that this offer is made by the employer to the employee.
In such cases, the Court of Cassation evaluates the existence of a reasonable benefit or, in other words, an additional advantage to be provided to the employee, alongside employment-related claims, as a condition for the validity of the mutual rescission agreement. [29] In practice, the reasonable benefit that must be provided to the employee in the termination offer made by the employer is evaluated on a case-by-case basis, but it is generally accepted that a mutual rescission agreement consisting solely of the settlement of employment-related claims is not valid. In a similar case, the Court of Cassation ruled that the payment of severance and notice pay to the employee in the mutual rescission agreement was insufficient, and that at least the equivalent of four months' salary should be provided as a reasonable benefit, and that a mutual rescission agreement based solely on severance and notice pay would be considered invalid due to a lack of reasonable benefit. [30] In another case, it was ruled that the employee, who was a sales manager, had the capacity to understand the consequences of the proposed mutual rescission agreement and that the two months of additional pay offered to him, alongside his employment-related claims, was within reasonable benefit limits, thus making the mutual rescission agreement valid. [31] As shaped by practice, the content of the reasonable benefit in the mutual rescission agreement, the side from which the offer is made, and the circumstances of the specific case determine its validity. [32]
Another issue that arises regarding reasonable benefit is whether the unemployment benefits the employee will receive as a result of the notification enabling them to qualify for unemployment insurance can be considered as part of the reasonable benefit. A mutual rescission agreement is generally not a termination process. The conditions under which an employee is entitled to unemployment benefits are specified in the Unemployment Insurance Law No. 4447. In this context, if the employer carries out the termination procedure with exit code 4, or if the employee terminates the contract due to compulsory reasons under exit code 23, and the other conditions are met, the employee will be entitled to unemployment benefits. However, since the mutual rescission agreement is a contract based on mutual consent and constitutes a contractual act that creates a new situation, it is not considered a termination process, and therefore, the exit codes listed under the termination procedure cannot be reported in this context. Nevertheless, the employer can unilaterally report this exit code to the institution in a way that enables the employee to receive unemployment benefits. However, this may lead to the employer's liability due to an inaccurate declaration. Since the process does not constitute an additional financial burden for the employer or direct financial compensation for the employee, and it poses a legal issue, the reporting of the exit code for the purpose of obtaining unemployment benefits cannot be considered as an additional benefit provided to the employee. Thus, it cannot be stated that the employer has provided a reasonable benefit in this case.
The additional benefit or reasonable advantage mentioned above applies when the termination offer is made by the employer. In cases where the termination offer is made by the employee to the employer, the Court of Cassation accepts that if the employee is able to comprehend the meaning and consequences of the termination, and the offer is made with the knowledge of its outcome, the existence of reasonable benefit will no longer be required. [33]
4.3.2- Compliance with The Ordinary Course of Life
The expression "compliance with the ordinary course of life" does not have a precise definition within the legal system, but it is a validity condition that has been recognized in the case law of the Court of Cassation. At its core, compliance with the ordinary course of life refers to a situation that can be reasonably accepted in everyday life, something that can be explained within the realms of reason and logic.
This expression, which frequently appears in labor law, is also considered as one of the validity conditions for judicial review within the context of the mutual rescission agreement. Along with reasonable benefit, this concept is assessed on a case-by-case basis for each individual situation. Factors such as the worker's seniority and the manner in which the employment contract is terminated are evaluated separately in each employment relationship, and the validity of the mutual rescission agreement is assessed within the ordinary course of life. For instance, in labor law, it is considered contrary to the ordinary course of life for a worker with long-term employment to leave their job through a mutual rescission agreement while disregarding severance pay and other employment-related benefits. [34] In another ruling, the Court of Cassation found that when a worker who had resigned via a mutual rescission agreement but received severance pay filed a lawsuit for reinstatement 19 days later, the resignation by termination agreement was deemed contrary to the ordinary course of life, and the termination agreement was declared invalid, with the worker’s dismissal considered unjustified. [35] Similarly, the Court of Cassation ruled that it was contrary to the ordinary course of life for a worker with 9 years of service to have their employment contract terminated via a mutual rescission agreement without receiving any additional benefit. [36]
4.3.3- Reservation Clause
The term "ihtirazı kayıt" (reservation clause), which has its origins in Ottoman Turkish, essentially refers to a reservation or exception made during the performance of an obligation within a debtor-creditor relationship. [37] In the context of a mutual rescission agreement, a mutual rescission agreement with a reservation clause would be considered invalid, as it introduces a defect in the mutual consent of the parties and cannot be made conditional. In a similar case, a mutual rescission agreement signed by the worker on the condition of receiving their legal rights, with the payment of employment claims being subject to the signing of the agreement, was ruled invalid. [38]
5- CONCLUSION
A mutual rescission agreement is a contract that, by its nature, terminates an existing legal relationship in all its consequences, based on mutual consent, and is a contract that brings about a disruptive innovation. The “mutual rescission agreement,” which has been used in commercial relationships since ancient times, has found its place in our legal system and continues to be used as a way to terminate reciprocal contracts that impose obligations on both parties.
The mutual rescission agreement has also found its place in labor law due to its consequences. Unlike the termination provisions regulated in Articles 24 and 25 of the Labor Law No. 4857, and the termination cases listed in Article 14 of the Labor Law No. 1475, a mutual rescission agreement refers to the mutual and compatible declarations of intent by the employee and employer to terminate the employment contract along with all its consequences. In this sense, the mutual rescission agreement differs from the termination provisions. While it resembles a release agreement, the mutual rescission agreement differs from a release agreement in terms of its broader impact. A release agreement only leads to the partial or complete elimination of an existing debt right, whereas a mutual rescission agreement is a new disruptive contract that fully eliminates an existing contract.
A mutual rescission agreement can be established between two or more natural or legal persons who have the capacity to exercise rights and perform acts. The mutual agreement of the parties, in line with their intentions, depends on the acceptance of an offer made by one party by the other party. Although the mutual rescission agreement is an atypical contract and the requirement for it to be in writing is not considered a condition for validity, it is accepted, particularly in labor law, that it should be in writing for the ease of proof and to ensure the identification of the parties' interests.
In labor law, the validity conditions of the “mutual rescission agreement,” which is a disruptive and atypical contract, have been determined through judicial precedents. For this type of contract, which does not have a legal regulation, the first thing to establish is whether the “rescission offer” was made by the employer or by the employee. This is because, for the mutual rescission agreement proposed by the employer to be valid, not only must the employee's labor claims be settled, but the employee must also be provided with a reasonable benefit. What constitutes a reasonable benefit is assessed differently in each specific case. In the case where the rescission is made by the employee, the Court of Cassation has ruled that a reasonable benefit is not required, and it is accepted that the employee knowingly and willingly proposes the conditions of the rescission to the other party.
Other factors affecting the validity of the mutual rescission agreement include ensuring conformity with the ordinary course of life and the absence of a reservation of rights. Conformity with the ordinary course of life is assessed separately in each specific case and considered along with reasonable benefit. It involves examining whether the actions taken are reasonable and logical, considering the employee's seniority and current status. The reservation of rights means that the mutual rescission agreement should not be subject to any conditions; it must be signed unconditionally and with the existence of reasonable benefit and clear mutual consent.
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BEDÜK Mehmet Nusret, “İş Sözleşmesinin İşçi Tarafından Feshi ve Feshin Hukuki Sonuçları” Selçuk University Faculty of Law Journal, 2019.
ÇELİK Nuri-CANİKLİOĞLU Nurşen-CANBOLAT Talat-KARACA Ercüment, Labor Law Courses, İstanbul 2020.
DUMAN Berna, Türk İş Hukukunda İkale, Ankara 2020.
EREN Fikret, Borçlar Hukuku, Genel Hükümler, Ankara 2012.
GEREK Hasan Nüvit, “İş Sözleşmesinin İkale Sözleşmesi ile Sona Ermesi,” Çalışma ve Toplum Dergisi, 2011, Issue 4.
KAYAR İsmail, 6098 Sayılı Türk Borçlar Kanunu’na Göre Borçlar Hukuku Genel Hükümleri, Ankara 2019.
OĞUZMAN Kemal-ÖZ Turgut, Borçlar Hukuku Genel Hükümler, İstanbul 2020.
ÖZYÖRÜK Ali Hasan, İkale Sözleşmesi, Ankara 2019.
SÜZEK, Sarper, İş Hukuku, İstanbul 2020.
[1] Sarper Süzek, İş Hukuku, İstanbul 2020, s. 517; Nuri Çelik-Nurşen Caniklioğlu-Talat Canbolat-Ercüment Karaca, Labor Law Courses, İstanbul 2020, pp. 460-461.
[2] For detailed information, see: Mustafa Alp, “İş Hukukunda İkalenin (Bozma Sözleşmesinin) Geçerlilik Koşulları” Legal İş Hukuku ve Sosyal Güvenlik Hukuku Dergisi, 2008, Issue 17, p. 28.
[3] “IV. Freedom of Work and Contract Article 48 – “Everyone has the freedom to work and enter into contracts in any field of their choice. Establishing private enterprises is free. The state takes the necessary measures to ensure that private enterprises operate in accordance with the requirements of the national economy and social objectives, and to ensure they operate in safety and stability.”
[4] Supreme Court 9th Civil Chamber, 2007/26232 E, 2008/5313 K, 18.03.2008 T; “…The mutual agreement of the worker and employer on termination does not constitute a termination. Although this type of termination is not included in the Labor Law, a statement (offer) made by one party to the other regarding the mutual termination of the employment contract, followed by the acceptance of the other party, forms a termination agreement (ikale). In the termination agreement, the offer aims to end the employment relationship through the other party's acceptance of the appropriate declaration of intent. For this reason, the offer made for the termination agreement cannot be evaluated as a termination and cannot be converted into one ( Kılıçoğlu/Şenocak: İş Güvencesi Hukuku, İstanbul 2007 p. 99 )…”
[5] Muhittin Astarlı, İş Hukukunda İkale (Bozma) Sözleşmesi, Ankara 2013, p. 30; Fikret Eren, Borçlar Hukuku, Genel Hükümler, Ankara 2012, pp. 174-175.
[6] Astarlı, p. 36.
[7] Ufuk Aydın, “İş Sözleşmesinin Anlaşma ile Sona Erdirilmesi” Çimento İşveren Dergisi, M 2004, Issue 3, Vol.18, p. 5
[8] Gülsevil Alpagut, “İş Sözleşmesinin Sona Ermesine İlişkin Sözleşmesel Kayıtlar ve Sözleşmenin Tarafların Anlaşmasıyla Sona Ermesi (İkale Sözleşmesi)” 11th Meeting on Labor and Social Security Law, June 8-9, 2007, İstanbul Barosu Yayınları, İstanbul 2008, p. 45.
[10] İsmail Kayar, 6098 Sayılı Türk Borçlar Kanunu’na Göre Borçlar Hukuku Genel Hükümleri, Ankara 2019, p. 58.
[11] Astarlı, p. 61.
[12] Ali Hasan Özyörük, İkale Sözleşmesi, Ankara 2019, s.166; Hasan Nüvit Gerek, “İş Sözleşmesinin İkale Sözleşmesi ile Sona Ermesi”, Çalışma ve Toplum Dergisi, 2011, Issue 4, p. 46.
[13] Aydın, p. 6
[14] Çelik/Caniklioğlu/Canbolat/Karaca, p. 461.
[15] Astarlı, p. 119.
[16] Kayar, pp. 93-94.
[17] Kemal Oğuzman/Turgut Öz, Borçlar Hukuku Genel Hükümler, İstanbul 2020, p. 142.
[18] Oğuzman/Öz, pp. 143-144.
[19] a. Mistake in Declaration ARTICLE 31- The following mistakes, in particular, are considered fundamental: 1. If the mistaken party has expressed their intention for a contract different from the one they intended to establish. 2. If the mistaken party has expressed their intention regarding a subject other than the one they intended. 3. If the mistaken party has expressed their intention to conclude a contract with someone other than the person they actually intended.4. If the mistaken party has considered a specific individual with particular qualities while concluding the contract but has expressed their intention for another person.5. If the mistaken party has expressed their intention for a performance significantly greater than what they intended to undertake or for a consideration significantly less than what they intended to receive. Simple calculation errors do not affect the validity of the contract; correction of such errors suffices.
[20] Astarlı, p. 169.
[21] Astarlı, p. 171.
[22] Oğuzman/Öz, pp. 114-115.
[23] Oğuzman/Öz, p. 118.
[24] Astarlı, p. 174.
[25] Astarlı, p. 204; Berna Duman, Türk İş Hukukunda İkale, Ankara 2020, p. 73.
[26] Özyörük, p. 274.
[27] Mehmet Nusret Bedük, “İş Sözleşmesinin İşçi Tarafından Feshi ve Feshin Hukuki Sonuçları” Selçuk University Faculty of Law Journal, 2019, p. 702.
[28] Alp, p. 28-30.
[29] For precedent decisions, see: Supreme Court 22nd Civil Chamber, 2013/37045 E, 2014/3 K, 13.01.2014 T; Supreme Court 9th Civil Chamber, 2016/33229 E, 2018/150 K, 15.01.2018 T; Supreme Court 9th Civil Chamber, 2017/23432 E, 2018/8361 K, 11.04.2018 T. (Kazancı İçtihat).
[30] Supreme Court 9th Civil Chamber, 2015/27647 E, 2016/7838 K, 30.03.2016 T. (Kazancı İçtihat).
[31] Supreme Court 9th Civil Chamber, 2016/29473 E, 2017/17057 K, 31.10.2017 T. (Kazancı İçtihat).
[32] Süzek, s. 518-519.
[33] Supreme Court 22nd Civil Chamber, 2017/20595 E, 2017/7654 K, 04.04.2017 T; Y9HD, 2016/10467 E, 2017/7076 K, 24.04.2017 T; Y9HD, 2016/9742 E, 2017/6153 K, 06.04.2017 T. (Kazancı İçtihat).
[34] Supreme Court 7th Civil Chamber, 2015/1821 E, 2015/10851 K, 02.06.2015 T. (Kazancı içtihat).
[35] Supreme Court 9th Civil Chamber, 2017/24768 E, 2018/11605 K, 23.05.2018 T. (Kazancı İçtihat).
[36] Supreme Court 9th Civil Chamber, 2017/21961 E, 2018/6119 K, 22.03.2018 T. (Kazancı İçtihat).
[38] Supreme Court 22nd Civil Chamber, 2017/36294 E, 2017/18735 K, 21.09.2017 T; See also: Supreme Court 9th Civil Chamber, 2016/34336 E, 2018/747 K, 22.01.2018 T: “…In the present dispute, although the court accepted that the plaintiff's employment contract was terminated by the defendant in accordance with the termination agreement (ikale agreement) and that reasonable benefit was provided to the plaintiff, making the agreement valid, it is understood that a protocol dated 29.02.2016 was signed between the defendant and the plaintiff regarding the termination of the employment contract by mutual agreement. According to this protocol, it was agreed to pay the plaintiff a total of 107,834 TRY as annual leave pay, severance pay, and an additional payment. However, the plaintiff explicitly added a reservation to the ikale agreement by writing “I sign with the reservation of all my legal rights” at the bottom of the protocol. In this case, it is evident that there can be no talk of mutual consent between the parties. It has been established that the employer terminated the plaintiff's employment contract, and since no written notice of valid termination was presented by the employer, the termination is invalid solely for this reason pursuant to Article 19 of Labor Law No. 4857…” (Kazancı İçtihat).
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