Article 420 of the Turkish Code of Obligations sets four conditions that must all be satisfied at once; a document missing any one of them is absolutely void, and at most survives as a receipt for the amount it names.
A release deed signed by an employee in Türkiye — an ibraname, or ibra sözleşmesi — is valid only if four conditions are satisfied together: it must be in writing; it must be dated at least one month after the employment contract ended; it must state the type and the amount of each claim released expressly; and the amount must be paid in full, relative to what is owed, through a bank. Article 420/2 of the Turkish Code of Obligations No. 6098 closes with an unusually blunt sentence: a release agreement or release deed that does not carry these elements is kesin olarak hükümsüz — absolutely void.
That is the answer to the question most employers actually have. The second half of the answer is the part that surprises them: a void release deed does not simply vanish from the file. Under Article 420/3, a document that does not evidence payment of the claim at its true amount counts as a receipt (makbuz hükmünde), limited to the sum it contains — and the sentence immediately after that one adds the condition employers most often break: even in that case, payment must have been made through a bank. A cash payment against a signed release can therefore leave an employer with neither a release nor a receipt, having already parted with the money.
What Article 420 Actually Says
Article 420 sits in the employment-contract chapter of the Code under the heading “Penalty clause and release”, and it has four paragraphs that work as a unit.
The first paragraph voids any penalty clause imposed on the employee alone in an employment contract. A mutual penalty clause may stand; a one-sided one does not.
The second paragraph is the operative rule for release deeds and sets the four conditions. The third turns a failed release into a receipt limited to the amount it names, subject to the bank-payment requirement. The fourth extends both the second and third paragraphs to all compensation claims arising from the employment contract, expressly including what dependants who have lost financial support and other relatives of the employee may claim. A release taken from a family after a fatal workplace incident is measured against exactly the same four conditions.
Nothing in Article 421, which follows, or in Article 419, which precedes it, softens any of this. There is no exception for senior employees, no exception for mutual-consent departures, and no exception for a well-advised employee who signs willingly.
The Four Conditions, One by One
The conditions are cumulative. Three out of four is not a partial release; it is a void one.
1. Written form
The deed must be in writing. The statute asks for ordinary written form — a signed document — and does not require notarisation. This is the condition employers almost never fail, which is precisely why it lulls them: a professionally drafted, properly signed document can still be worthless on any of the other three grounds.
2. At least one month after the contract ended
As at the date of the release, at least one month must have passed since the employment contract came to an end. This kills the most common practice in the market: the release presented in the exit interview, attached to the final payslip, or signed in the same meeting as the notice of termination. Every one of those is void as a release, no matter how clearly it is worded or how freely it is signed.
The rationale is straightforward. At the moment of exit the employee is under maximum pressure and minimum information; a month later, with the final payments visible in the account, the balance shifts. Employers planning an exit therefore have to treat the release as a second, separate step, some weeks after the process described in our guide to terminating an employee in Türkiye has run its course — not as the final signature on the termination file.
3. The type and the amount of each claim, stated expressly
The deed must state the type of the claim released and its amount, and it must do so clearly. This is the condition that defeats the classic blanket waiver — “I have no further claim of any kind against the employer” — which names no head of claim and no figure.
In practice each entitlement needs to appear on its own line with its own number: severance indemnity, notice indemnity, accrued annual-leave pay, overtime, weekly rest and public-holiday pay, any bonus or commission. Because severance and notice are computed on a broader wage base than bare salary, the figures have to be built correctly before they are written down; the mechanics are set out in our guide to severance and notice pay in Türkiye. A deed that names heads of claim the employee never had, or that omits ones they plainly did, is worse than useless — it becomes the employee’s own evidence of what the employer knew was owed.
4. Payment in full, through a bank
Payment must be noksansız — complete relative to the amount of the entitlement — and it must be made through a bank. Two distinct failures live here. The first is short payment: a settlement figure agreed at a discount is not a release, whatever the deed says. The second is the channel: cash, set-off against a loan the employee owed, payment to a relative’s account, or a transfer that does not match the figures in the deed.
The bank requirement is not an isolated formality. Article 32/2 of the Labour Act No. 4857 already channels wages, premiums and bonuses through a specially opened bank account for employers covered by the relevant ministerial decision, and Article 32 requires that on termination the employee’s wage and all contractual and statutory benefits capable of measurement in money be paid in full. Article 420/2 simply makes the bank trail a condition of the release itself.
| Condition (TCO Art. 420/2) | What it requires | How it is usually failed | Consequence |
|---|---|---|---|
| Written form | A signed written document; no notarisation required | Oral or implied waiver; unsigned template | Absolutely void as a release |
| One-month interval | Release dated at least one month after the contract ended | Signed at the exit interview or with the final payslip | Absolutely void as a release |
| Type and amount stated | Each head of claim named, each with its own figure | "No further claims of any kind"; a single lump sum | Void; and nothing to set off as a receipt |
| Full payment through a bank | Payment complete relative to the entitlement, via bank transfer | Discounted settlement; cash; set-off; third-party account | Void; cash also destroys the receipt effect (Art. 420/3) |
When One Condition Is Missing: the Receipt Effect
Article 420/3 is the provision that decides what the document is worth once it has failed as a release. A release agreement, or any other payment document containing a release statement, that does not evidence payment of the entitlement at its true amount is a receipt limited to the sum it contains. And, in the sentence that follows, the statute repeats the channel requirement: even in that case, payment must have been made through a bank.
Article 420/3 shows how this works in a live file. Where an amount has been paid only in part, the document takes effect not as a release but as a receipt limited to the figure it names, and even then payment through a bank is required. The paragraph does not make that receipt effect depend on whether the deed was taken while the employee was still working or after termination. When the award is computed, the amount shown as paid in the deed is deducted from the claim. The employer’s position is therefore not zero — but it is only ever a credit for money demonstrably paid, never a bar to the claim.
Three practical consequences follow. A blank or general waiver leaves nothing to credit, because there is no figure. A cash payment leaves nothing to credit either, because the receipt effect itself requires a bank trail. And a short payment leaves the employer facing the balance, plus interest, plus the costs of a proceeding it thought it had bought its way out of.
What a Release Deed Can Never Do
Even four-square compliance with Article 420 does not make a release deed a universal solvent.
The Code requires a release to state the type and amount of the released claim expressly and to rest on a payment that is complete relative to the entitlement (Article 420/2); a deed lacking those elements is absolutely null and void, and one that does not show the true amount is only a receipt (Article 420/3). A deed therefore cannot be used to present a disputed entitlement as closed without meeting those conditions. A release deed that contradicts the employer’s own pleadings and records (payroll, leave registers, timekeeping data) is a separate problem. Where the employer’s defence says the employee never worked overtime while the release deed pays off an overtime claim, the document undermines rather than protects.
There is also a date line worth knowing. The Code entered into force on 1 July 2012. Under Article 1/1 of Law No. 6101, whether earlier transactions are binding, and what their consequences are, is as a rule governed by the law in force when they took place, so earlier deeds are as a rule assessed under the rules then in force rather than the one-month interval and the bank-payment requirement. Article 2 of the same Law applies the Code’s public-order rules regardless of date and does not say whether Article 420 is one of them. In long-service files where a settlement document from the 2000s resurfaces, that distinction can change the analysis entirely.
The Route That Actually Closes a File
Because Article 420 makes the deed signed at the door structurally impossible, the instrument that ends a Turkish employment dispute is now usually the mediation settlement, not the release.
Under Article 3/1 of the Labour Courts Act No. 7036, applying to a mediator is a procedural precondition (dava şartı) for actions based on employee or employer receivables and indemnities and for reinstatement claims — extended by a 2023 amendment to objection-to-enforcement, negative-declaratory and restitution actions on the same claims. Article 3/3 carves out material and non-pecuniary damages claims arising from workplace accidents and occupational disease, which go straight to court.
The settlement itself has its own statutory force. Article 18/4 of the Mediation Act No. 6325 provides that — save where a statute makes an enforceability annotation compulsory — an agreement signed jointly by the parties, their lawyers and the mediator is a document with the force of a court judgment (ilam niteliğinde belge) without any such annotation, and Article 18/5 provides that once a settlement is reached, no action may be brought by the parties on the matters agreed. That statutory bar, not a private waiver, is what closes the file. How the process runs from the first application to the final minutes is set out in our guide to workplace mediation and labour litigation in Türkiye.
None of this makes the drafting careless. A settlement that names no heads of claim leaves room for argument about what was actually agreed, and the same discipline that Article 420 imposes on a release deed — every entitlement named, every figure stated, every payment traceable — is what makes a mediation minute hold up.
The Clocks That Keep Running
A void release deed matters because of what it fails to stop. Additional Article 3 of the Labour Act No. 4857, inserted in 2017, sets a five-year limitation period, regardless of which statute the contract falls under, for annual-leave pay and for severance indemnity, indemnity arising from termination without observing the notice requirement, bad-faith indemnity, and indemnity for termination in breach of the equal-treatment principle. Article 32 of the same Act sets five years for wage claims, and Article 59 provides that pay for accrued but unused annual leave is calculated on the wage at the termination date, with limitation running from that date.
For claims with no special rule, Article 147/1 of the Code of Obligations applies a five-year period to wages and other periodic performances, while Article 146 leaves the general period at ten years where no contrary provision exists. An employer holding a void release deed is exposed across that whole window — and, unlike a mediation settlement, has no procedural answer to a claim filed within it.
The practical discipline is unglamorous and effective: build the numbers correctly at termination, pay them in full through the bank, wait out the month, and then paper the release head by head — or settle in mediation. The wider framework these documents sit in, from the contract terms to the exit, is covered in our guides to employment contracts in Türkiye and employing staff in Türkiye, and the termination and indemnity work itself is described on our termination and severance page.
Statutory references are to the consolidated texts published on mevzuat.gov.tr and were checked on 9 September 2026. Severance ceiling figures and other monetary thresholds change by semi-annual circular and should be taken from the current circular rather than from any fixed figure.
A release deed is usually signed at the end of an employment relationship, and whether it holds is one of the recurring questions in our labour and employment law work.
