Release documents signed as the employment relationship comes to an end are among the documents most frequently in dispute in employment litigation. Employers have the employee sign a document upon the ending of the contract; on the face of it, that document means that overtime, annual leave, notice pay, severance pay and other employment claims have been given up. Yet the fact that it has been signed is not in itself enough to give the document the legal value of a release.
For the purposes of employment law, a release document is a document in which the employee declares in writing that they have collected, in whole or in part, the claims arising against the employer and that no further demand remains. Because of the structural disparity of power between the parties, however, such declarations are subject to strict conditions under Art. 420 of the Turkish Code of Obligations No. 6098. Having regard to the employee’s economically and socially weaker position, the legislature has made it compulsory for a declaration of release to satisfy certain criteria of form and content.
In this briefing note we address the conditions required for the validity of a release document, the scope of the provision in Art. 420 of the Turkish Code of Obligations No. 6098, the settled approach of the Court of Cassation and the effect of the document on the course of proceedings.
The Concept of a Release Document
A release document is a unilateral declaration of intent, extinguishing the debt, by which the creditor declares that they have relieved the debtor of the debt in whole or in part. In Turkish law of obligations, release is regarded as one of the situations that extinguish a debt otherwise than by performance; its consequence is that the claim itself ceases to exist. Following the declaration the obligation comes to an end, and it is no longer possible for the creditor to assert the same claim again.
The legal character of a release
In character, a release is a disposition that brings the obligation to an end through the creditor’s unilateral declaration of intent. In practice, however, a release is most often effected through a written text containing the mutual declarations of both parties. The release document is that declaration of intent committed to paper.
A point that must be underlined is that a release may relate only to a claim that has already arisen and become due and payable. Abstract declarations of waiver given in respect of claims that have not yet arisen or that lack definiteness are problematic as regards validity within the system of the law of obligations. For that reason the subject matter, scope and amount of the release must be set out in the document in a manner leaving no room for doubt.
What distinguishes release in employment law
In employment law, a release is construed within a narrower framework than in the classical law of obligations. The basic reason behind this is the absence of economic and legal balance between the parties. Because at the stage when the contract comes to an end the employee is most often still in a position of dependence on the employer, the legislature has made employee release documents subject to special protection.
Within this framework, a release document in employment law is a written declaration that notice pay and severance pay, overtime, weekly rest days, annual leave and similar employment claims have been collected and that no further demand remains. Not every declaration of release is treated as valid, however; Art. 420 of the Turkish Code of Obligations No. 6098 in particular subjects these documents to strict conditions of form and content.
In conclusion, although a release is a powerful transaction extinguishing a debt, in employment law it is subjected to close scrutiny. Correctly identifying the legal character of the document directly determines whether employment claims may be pursued.
The link between release and the extinction of a debt
Release is one of the causes that extinguish a debt, and it is distinct from performance. Whereas in performance the debt is discharged by being carried out, in a release the creditor gives up their entitlement by their own intent. In this respect, release is one of the methods serving the winding-up of an obligation.
In employment law, however, a release most often arises together with a payment. Where the claim covered by the document has genuinely and fully been paid, the text may serve both as a release and as a receipt. By contrast, documents drawn up without any payment being made, or containing no amount, do not extinguish the debt; at most they are assessed as prima facie written evidence.
The Conditions Required for Validity
The validity of employee release documents is determined not by the general rules of the law of obligations but specifically by the provision of Art. 420 of the Turkish Code of Obligations No. 6098. In accordance with the principle of protecting the employee, the legislature has made declarations of release relating to claims arising from the employment relationship subject to strict criteria of form and content.
Documents drawn up contrary to the conditions required by Art. 420 of the Turkish Code of Obligations No. 6098 are null and void. Such a text carries no value as a release; at most it may be treated as a receipt in respect of the payment made.
Whether an employee release document may be spoken of as valid depends on all of the conditions listed below being satisfied together.
Written Form
The employee’s declaration of release must be drawn up in written form. The legal order attaches no consequence to declarations of release made orally.
Written form alone is not enough, however. The content of the text must also be clear, comprehensible and definite. Documents prepared with standard formulae or with generic expressions do not in most cases satisfy the criterion of validity and cannot acquire the character of a release.
The Expiry of One Month After Termination
In order to prevent a declaration being made under pressure the moment the contract comes to an end, the legislation ties the moment at which the document is drawn up to at least one month after the date of termination.
Texts signed on the day the termination takes effect, or within the short period following it, are null and void. The Court of Cassation applies this condition without concession, attaching particular importance to that period so that intent may be declared freely.
Clear Statement of the Heads of Claim and the Amounts
The document must state;
- which head (which of the employment claims, such as annual leave pay, notice pay or severance pay) has been brought within the scope of the release,
- the amount of each head,
- the sum paid,
individually and in a manner leaving no room for doubt. General sentences of the kind “no claim of mine remains” do not give rise to a valid release. Where concrete heads are not shown, the document is legally void.
Payment Made in Full and Through a Bank
The sum shown in the text must have been paid in full and through a bank.
Payments made in cash, partial payments, or assertions of payment unsupported by a bank record do not satisfy this condition. Where the payment remains incomplete, the release is treated as a receipt only in respect of the part paid; as regards the balance, the employee’s ability to bring an action continues.
The Boundary Between a Genuine Release and a Receipt
One of the matters most often confused in practice is the distinction between a genuine release and a receipt.
- A genuine release → extinguishes the debt.
- A receipt → proves only the payment made.
A text that does not satisfy the conditions of Art. 420 of the Turkish Code of Obligations No. 6098 is not treated as a release; it is assessed only as a receipt showing that the payment took place. In that event the employee may bring an action for the heads that have not been paid at all or have been paid only in part.
The resulting legal consequence
Unless the conditions in Art. 420 of the Turkish Code of Obligations No. 6098 are satisfied together, an employee release document is not legally valid. That provision is mandatory; it is not possible for the parties to agree otherwise. The court, too, is obliged to review the validity of the document of its own motion.
Accordingly, not every document signed by an employee extinguishes the claim of its own accord. The validity of a release document must be examined carefully within the circumstances of each file.
Situations Giving Rise to Invalidity
The fact that a document has been signed does not give it validity. Texts prepared contrary to Art. 420 of the Turkish Code of Obligations No. 6098 meet with the sanction of absolute nullity. Proceeding from the principle of construction in favour of the employee, the Court of Cassation likewise reviews these documents narrowly and strictly.
Documents drawn up in the following situations are most often held to be invalid.
Documents Signed on the Day of Termination or Before a Month Has Passed
Under Art. 420 of the Turkish Code of Obligations No. 6098, the document must be drawn up after at least one month has passed since the date on which the employment relationship ended.
Texts signed on the date of termination or immediately afterwards are therefore null and void. In documents of this kind, a conclusion of invalidity is reached on the assumption that the signature was given under pressure.
Documents Containing Abstract and General Expressions
Formulaic sentences of the kind “no claim of mine remains” or “I have received all my rights and entitlements” do not constitute a valid release.
The document must clearly show which head is being released and the amount of each head. Otherwise the text acquires no value as a release; at most it remains an abstract declaration.
Documents with No Breakdown of Heads and Amounts
Under Art. 420 of the Turkish Code of Obligations No. 6098, heads such as;
- Severance pay
- Notice pay
- Overtime
- Annual leave pay
must be written out separately and the amounts against them clearly stated. Writing a single total figure is not regarded as sufficient. Where no separation into heads has been made, the document is not legally valid.
Payment Not Made Through a Bank
The payment shown in the document must have been effected through a bank. Defences to the effect that payment was made in cash, or assertions unsupported by a bank record, do not satisfy this condition.
Where the payment remains incomplete, the release has the effect of a receipt only in respect of the sum paid; as regards the remaining claim, the right of action is preserved.
Pressure and Duress Vitiating Intent
Where the employee has signed under the influence of motives such as;
- a promise that they will be taken back into employment,
- a threat that their compensation will not be paid at all,
- pressure to the effect that unemployment benefit procedures will not be carried out,
the document may become invalid on the ground of a defect of intent.
Within the framework of the general provisions of the law of obligations, annulment of the release may be sought in situations of mistake, fraud or duress.
For employment litigation this point is decisive from the standpoint of protecting the employee. Where concrete evidence that the signature was given under pressure is placed on the file, the court may hold the release document invalid.
Undated or Backdated Documents
Another problem frequently encountered in practice is documents bearing no date, or bearing a past date. Texts that appear to have been drawn up close to the date of termination are held invalid where they are directed at circumventing the one-month condition.
Documents Taken While the Employment Relationship Continues
Release documents taken while the contract is continuing are as a rule invalid. It is not accepted that an employee still within the employment relationship has waived their claims. Texts of this kind remain merely a written declaration and do not bar claims asserted later on.
The Legal Consequences It Produces
A release document drawn up in accordance with its conditions is in the nature of a powerful transaction extinguishing the debt. Since in employment law these documents undergo close scrutiny as to validity, however, not every text signed produces the same result. The effect of the document differs according to;
- whether or not it is valid,
- its content and scope.
These are the factors on which it turns.
Its Effect on an Action for a Claim
Where there is a valid release document satisfying the conditions of Art. 420 of the Turkish Code of Obligations No. 6098, no fresh demand may be made in respect of the same heads. In such a case the claim is accepted as having legally come to an end, and any action brought results in dismissal.
By contrast, where the document is invalid or one of the statutory conditions is missing, no consequence of release arises. The employee may seek annual leave pay, overtime, notice pay and severance pay and other employment claims by way of an action.
The courts carry out the review of validity of their own motion. That is to say, even if the point is not raised by the parties, the judge is obliged to examine whether the text complies with Art. 420 of the Turkish Code of Obligations No. 6098.
Partial Release and Value as a Receipt
The picture most commonly seen in practice is that the document does not fully satisfy the conditions of Art. 420 of the Turkish Code of Obligations No. 6098. Such a text is not disregarded altogether; it is most often assessed as being in the nature of a receipt.
Where;
- the heads have not been shown,
- the one-month condition has not been met,
- the bank payment is incomplete,
the document does not extinguish the debt; it carries value only as proof of the payment made.
For instance, where TRY 50,000 has been paid to the employee and the total claim is TRY 80,000, the text is treated as a receipt only in respect of TRY 50,000. An action may be brought for the remaining TRY 30,000.
Its Value in Terms of Proof
Whether valid or not, a release document is an important document in proving employment claims.
Where the release is valid:
- The claim has legally come to an end; no fresh demand may be made in respect of the same head.
Where the release is invalid:
- The sum paid is established,
- The balance of the claim is calculated accordingly and may be sought by way of an action.
The heads listed in the text may, moreover, indicate that certain payments have been acknowledged by the employer. In this respect the document stands at the centre of the strategy on proof for both parties.
Can an Action Be Brought Where a Release Document Has Been Signed?
The fact that the document has been signed does not in every case mean that the right of action has been lost. In employment law these documents are subject to demanding conditions under Art. 420 of the Turkish Code of Obligations No. 6098. Since texts drawn up contrary to the conditions listed are null and void, the employee may apply to the court in respect of their claims.
The approach of “I signed a release document, so I have no rights left” therefore does not reflect the reality in most cases.
Where the Document Is Invalid, the Route of Litigation Is Open
An action may be brought where any one of the following situations exists:
- the document was signed before 1 month had passed from the termination,
- the heads and amounts were not shown separately,
- the payment was not made through a bank,
- the payment remained incomplete,
- the signature was given under pressure or duress.
In the possibilities listed, the text carries no value as a release; it is treated as a receipt limited to the sum paid, and the remaining heads may be made the subject of an action.
Where Payment Has Been Incomplete
Even where a particular sum has been paid and a release document drawn up in return, an action may be brought for the balance if the payment is incomplete. The court makes its calculation on the balance remaining after deducting the sum paid.
In the practice of the Court of Cassation, documents involving incomplete payment do not produce the consequence of a full release.
What Is the Position Where the Document Is Valid?
Where the text satisfies all of the conditions in Art. 420 of the Turkish Code of Obligations No. 6098 and payment has been made in full, no recourse may be had to litigation in respect of the same heads; the debt has legally come to an end.
In practice, however, the number of documents bearing all of these conditions together is very small. The one-month period and the bank payment condition in particular are missing in a great many files.
The Review Is Carried Out of the Court’s Own Motion
Whether the document is valid is assessed by the court of its own accord, even if the point is not raised by the parties. An employee who has signed a release document is therefore not treated as having lost the right to bring an action; the legal character of the text is determined in the course of the proceedings.
The Independent Legal Assessment
What is decisive in disputes over release documents is not the heading of the document but its content. In practice a significant proportion of texts bearing the heading “release document” carry only the value of a receipt, because they contain no breakdown of heads or because the one-month condition has not been observed; even so, the parties may construe the document as a definitive waiver.
On the employer’s side, preparing a valid release document is an effective tool of risk management that narrows the scope of any claims subsequently brought. The process must therefore be planned from the moment of termination.
In a particular file we recommend that the following headings be examined first:
- Whether the one-month period between the date on the document and the date of termination has in fact expired
- Whether each head of claim and the amount against it appear separately in the text
- Whether the payment is documented in full by bank records
- Establishing from the outset whether the document is to be treated as a genuine release or merely as a receipt
- Gathering concrete evidence showing that the signature was given under the influence of pressure, duress or a promise
- Correctly calculating the balance after set-off where payment has been incomplete
Independent Legal advises throughout the whole of the process in disputes connected with the ending of the employment contract, from the scrutiny of the release document to the pursuit of employment claims through the courts.