Alternative dispute resolution has been used in employment disputes for over 100 years, dating back to 1896 when the Government set up the first voluntary conciliation and arbitration scheme. Apart from a name change (Conciliation and Advisory Service in 1972) the basic service has been the same. In mid-1970’s, an independent council with statutory control was set up and re-branded as the Advisory Conciliation and Arbitration Service (ACAS). During the industrial unrest during those times with regards to the miners strike and the dockers’ walkouts, industrial mediation became more popular and the idea that people could talk and resolve their disputes began to catch on. But it was the introduction of mediation in the private sector as a way of resolving civil and commercial disputes in the early 1990s that held a dramatic breakthrough in the use of mediation as a clear effective alternative to litigation. Organistation such as the ADR Group, the Centre for Effective Dispute Resolution (CEDR Solve) and the Academy of Experts campaigned hard for the addition of mediation as a “best practice” standard by the legal profession. Finally, in April 1999, it was included in the Civil Procedure Rules (CPR) that was commonly known as the Woolf Reforms. Judges can now suggest to parties that they try and mediate their conflicts before they litigate, taking up court time and money. The reason for change is very simple to figure out. By 2002, employment tribunal claims had exceeded 130,000 cases a year, which was a 50% rise in just 3 years. As I stated before 64% of these people had not even tried to resolve their disputes directly with their employer. Overall an employer could wake up one morning, open his post and could find legal action is being taken against him. Like the court system, the tribunal system could not cope with the volume of work and thus mediation was largely encouraged.
By its nature, employment disputes are highly personal. Every dispute is emotive because it affects someone’s livelihood. At this point mediation can be a very useful tool and more importantly, a means for a smooth and efficient resolution. There are two types of mediation that could take place to resolve a conflict in the workplace. These include in house mediation and external mediation. They are both private and confidential processes of reconciling or bringing together the individuals in a conflict with the aim of giving the parties an opportunity to resolve the problem between themselves rather than having a judgment imposed upon them, as in cases dealt by civil litigation, arbitration or in a tribunal. The main differences between the two types of mediation are the fact that who pays for the process, where the talks take place, the independence of the mediator, and the degree to which confidentiality can be relied upon. In order to have a better understanding of these types of mediation, we must now look at each one in detail and ask ourselves how they operate.
In house mediation talks are held privately at the workplace and the process is paid by the employer. The mediator can be a company manager, consultant mediator etc, who do not have direct line responsibility for the employee. The mediator initially meets each party individually and may then decide to bring the parties together. The parties are then told whether a deal is possible by the mediator who liaises over implementation of the settlement. The mediator does not decide the case. This process creates a convenient opportunity for the employer to internally refer it out to a non-confrontational and non-threatening process and attempts to resolve the problem before it becomes a major issue. As with every approach, this also has its strengths and weaknesses. The strength of in house mediation is that it is cost effective for the employer rather then going through litigation. Even if a company is successful in defending a claim before a tribunal, it is unlikely to recover legal costs. An other major advantage of using this approach is with regards to timing. By resolving a dispute at a stage where rational thought is still roughly in proportion to emotive feelings rather than just investigating the problem, there is a very large likelihood that the reputations of both the parties can be preserved and disruption to the business is kept to a minimum. This is often called the “ripeness” of a conflict. A dispute will be ‘ripe’ for in house mediation when an apology or explanation will suffice, where reputation can be preserved, where alternative forms of compensation are available and before lawyers are involved in the dispute. On a more broad level, offering in house mediation to employees shows that the employer is willing to go that extra mile in order to resolve any conflict and keep good working relationships. If a matter cannot be settled and ends up in an employment tribunal, the employer can use the fact of in-house mediation as evidence of how it acted fairly and reasonably in order to resolve the issue.
Despite the best efforts of a progressive management, there are times when in-house mediation procedure will fail and the employer will have to notify the employee of the three step procedure which involves writing a letter explaining the issue, having a meeting to discuss the issue and having an appeal meting if required. At this point in time an external mediator can be called to help resolve the conflict. Unlike the in-house mediator, the external mediator is independent and has no ties with either party. The process itself often addresses the important power imbalance between employer and employee, because both parties have to agree on the selection of the mediator and share in the cost process. The sessions also take place in a neutral venue. The mediator in this case meets both parties jointly and then may decide to meet them separately, if required, later on the statements made or evidence given during the mediation cannot be later used in a tribunal and confidentiality is guaranteed. By using an external mediator, the power imbalance is addressed in two ways. The first is that the employee can bring along a legal representative or a trade union member, who as a negotiator is probably in a better position and is perhaps more capable of presenting the employees position and assessing the legal strength of the employer. Secondly, the mediator, being neutral, is able to check the employers’ defences with hard probing questions that the employee could not ask in an in-house mediation. External mediation helps both parties in the dispute to solve their disputes or come to an agreement without damaging relations.
Overall the impact of mediation within the workplace has been huge. Over the past 10 years, more and more employers have opted to use mediation and the advantages it brings. It is an effective way of resolving disputes and now parties enjoy using this method of ADR. This process has many advantages and the reason why parties like it include the fact that employment mediation is ‘interest based’ rather than ‘rights based’. Both parties are able to look for an outcome that could meet a whole range of needs beyond just what they are entitled to under the law. During the mediation process both sides can discuss a range of settlement options, including ones which are not within the power of an employment tribunal e.g. agreeing the terms of a reference. Apart from the parties to a dispute, lawyers also like mediation because it gives them an off-the-record chance to examine the strengths of their respective cases. The discussions in a mediation session are not binding until the sides have reached an agreement which lets the parties suggest ideas without being committed to them. Other advantages of using this method include the process being informal, making it less stressful. This can be very useful because as we all know the working environment can be very stressful at times, and the last thing an employer or an employee needs is more stress. A side in the conflict can also walk away from the table during a session and will not forfeit any legal options. In contrast with civil litigation it is clear to see that mediation should be used as a first resort. Employment mediation helps to exchange views and hopefully establish a dialogue between the parties in a dispute so a settlement can be reached which they can later live and work with. In employment litigation no one really wins. Legal costs are rarely recoverable and hard earned reputations are damaged which could mean future prospects for employment could be clouded because an employee who has sued an employer may well carry the dishonor with themselves. Mediation helps to prevent this. It paves a way to resolve disputes without really damaging work relations. It is more a friendly way of solving any disagreements with the help of others.
In conclusion the Employment Act 2002 has set out new employment rights and obligations. The central theme being, to create a work environment in which disagreements can be freely put forward and dealt with, before the parties get tangled up in their views and before the important connection of trust and confidence, which is critical in the workplace, breaks down. The new rules set out in the Employment Act help to identify disagreements at an early stage (the three step rule). However a downside of these new rules is that it does not provide any guidance or assistance on how to deal with a problem once it is identified, it is mainly left to an employer to deal with as s/he wishes. This means that the advantages of identifying a disagreement from an early stage are lost if the employer handles the issue badly. Disputes in the workplace require sensitive yet firm handling thus mediation may not always be appropriate, but if it becomes recognized by both parties and trusted, then this way of resolving conflicts in the workplace can be a useful channel of communication with a view to resolving the conflict, rather than one side claiming victory which could easily damage work relations.
Bibliography: Resolving Disputes without going to court – Andrew Floyer Acland
Resolving Conflicts – Wendy Grant
Lecture notes and handouts