Mandatory mediation in labour law: how should employers prepare? · Journal CPA

When one of your employees wants to sue for severance pay, overtime or reinstatement, they must first go through mediation. For employers, this process is a chance to resolve the dispute without going to court and at lower cost. But a meeting attended unprepared can turn the opportunity into a risk.

For which disputes is it compulsory?

Claims for employee or employer receivables and compensation based on law or on an individual or collective employment contract (severance, notice, overtime, annual leave pay, public holiday pay, etc.),
Reinstatement claims.

Compensation claims arising from work accidents and occupational diseases, and related determination, objection and recourse actions, are not within mandatory mediation.

The process step by step

Step	Time and content
1. Application	The employee applies to the mediation office at the courthouse; for reinstatement, within one month of service of the termination notice
2. Appointment of mediator	The office appoints a mediator from the list; the parties are contacted by phone, e-mail or formal notice
3. Meeting	The mediator brings the parties together; the discussions are confidential
4. Duration	Three weeks from the application; where necessary, an extension of at most one week
5. Outcome	A final record of agreement or no agreement is drawn up
6. Lawsuit	If there is no agreement, the employee can sue within the statutory period from the date of the final record

Not attending is expensive

A party who does not attend the first meeting without a valid excuse is held liable for all court costs in a later lawsuit, even if they win in part or in full, and no attorney's fee is awarded in their favour. So always respond to the invitation; if you cannot attend, appoint an authorised representative or lawyer.

The employer's preparation

Prepare the following file before the meeting:

Calculation: calculate all items the employee could claim according to your own records: Severance pay · Notice · Overtime
Documents: employment contract, payrolls, bank payment receipts, timesheets and entry-exit records, leave register, termination notice, records of defence statements.
Risk assessment: is the termination based on a valid reason, and was the procedure followed? Termination by the employer
Authority: the person attending must have authority to represent the company and agree (signature circular or power of attorney).
Limit: decide in advance up to what amount you are ready to settle.

Effect of the settlement record

A settlement record signed by the parties and the mediator counts as a document with the force of a court judgment; if it is not paid, it can be enforced directly.
The parties cannot later sue on the matters agreed. So the record should list each claim covered, one by one, with amounts.
Making payment through a bank and on the date stated in the record prevents later disputes.

Tax and SGK aspects

Amounts paid under the settlement are assessed separately according to their nature: severance pay is exempt from income tax within the ceiling; wage-type payments such as overtime and leave pay are subject to tax and premium deductions. The record should state clearly whether payments are gross or net and which item they relate to. In reinstatement settlements, distinguishing the compensation for non-reinstatement and the pay for the idle period is also important.

The employee's SGK exit code must be consistent with the content of the settlement: SGK exit codes

Common mistakes

Not taking the mediator's invitation seriously or not attending the meeting,
Agreeing on "TRY X in total" without separating the payment items,
Leaving claims not covered by the settlement open,
Paying in cash.

Apart from mediation, the validity of release deeds drawn up after the relationship ends is subject to separate rules: Release deed

Legal basis: Labour Courts Law No. 7036 art. 3; Law No. 6325 on Mediation in Civil Disputes; Labour Law No. 4857 art. 20.