Mediation in employment disputes – What is it and how does it work?

6 May, 2012 | Carolyn Ranson

Mediation has become the default ‘first port of call’ in employment disputes. One reason is certainly cost but the other is that the Employment Relations Act 2000 and Employment Relations Authority (“ERA”) have made mediation almost obligatory in that, even if both parties agree to apply straight to the ERA without going through the mediation process, they will probably be referred to mediation by the ERA anyway. The result is that mediation is now seen as a necessary step in the process and, usually, the process ends there and a settlement is reached.  The reason?  — it works!

What is mediation — what does it cost?

Employment mediation is a free service provided by the Department of Labour.  The service is set up specifically to resolve employment disputes for both current employees and ex-employees.  The mediators are well trained and impartial. Their role is to help both parties come to an agreement that they can both ‘live’ with and enable them to avoid being tied up in lengthy litigation.  The parties may bring along support people and/or an external advisor, such as an employment law specialist.

The process — how does it work?

• Each party has a turn to state their view of the issues.
• A discussion, controlled by the mediator, may then follow.
• The parties retire to separate rooms and the mediator talks to the each of the parties in turn.  They can be helpful in pointing out the strengths and weaknesses of each party’s case.  This is also where an employment law specialist can add real value in advising their clients on matters of law and likely outcomes if the matter proceeds beyond mediation.
• Negotiation takes place.  A skilled employment law specialist can help you achieve optimum results.
• If an agreement is reached, a settlement agreement is drawn up by the mediator and signed by the parties on the day.  It is full, final and binding.  As well as a monetary settlement it can include non-monetary considerations such as, the provision of a positive reference or a record of service, access to counselling sessions and/or a clause which provides that neither party will make disparaging comments about the other.
• If agreement is not reached, the parties can apply to the ERA or the Employment Court (“the Court”), which may refer them back to mediation to try again, or the matter may proceed through the courts.

The benefits — why does it work?

• Mediation takes place in a neutral environment.
• The process and the negotiations are completely confidential and without prejudice.  This means that statements made and the negotiations themselves cannot be used by the other party in court proceedings if settlement is not reached.
• The mediator facilitates the resolution of the dispute in an unbiased, practical way.
• The mediation process can help to place the focus on the issues rather than on the emotions involved.
• The dispute can be resolved in a timely way, usually within weeks, as opposed to the lengthy time frames involved in going through the courts.
• Early resolution enables the parties to move on.  For an employer or business owner this allows them to focus energy on positive core business issues.
• Settlement at mediation reduces exposure to litigation, ensures privacy and keeps costs to a minimum.

Preparation

Preparation for mediation is key.  A written statement setting out your case can be useful.  It might include the background to the dispute, the facts of the case and the legal issues at stake. You also need to be aware of:

• Current employment law and practice including relevant caselaw;
• the strengths and weaknesses of your case;
• the strengths and weaknesses of the other party’s case;
• the range of potential outcomes if the case did proceed to the ERA or the Employment Court; and
• the practical considerations involved.

In accordance with our obligations under the Lawyers and Conveyancers Act 2006, we cannot provide legal advice unless you have become a client of Smith and Partners and have received our Terms & Conditions of Engagement and Info for Clients.

If you would like advice on any employment law related matters, please contact Suzanne Sumner, Personal Assistant to employment law expert, Carolyn Ranson to find out how you can become a client of Smith and Partners and to set up an appointment to discuss your employment matter with Carolyn.

Suzanne Sumner
Ph: 09 837 6840
Email: Suzanne.sumner@smithpartners.co.nz

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(Please note we do not offer no win – no fee payment arrangements)