Posted on: Oct 16, 2017

When an employment dispute or personal grievance arises it can be very stressful for everyone involved. With work being a big part of most people’s lives, it’s understandable that when there’s an employment relationship problem in the workplace, it is important that they are dealt with efficiently, respectfully, and in a way that creates the best possible chance that parties will be able to move on. It’s unlikely that both parties are going to be ecstatic about the outcomes of a mediation, however the aim is to achieve a settlement that both parties can live with.

In accordance with the Employment Relations Act 2000 (the “Act”), mediation is intended to be the first port of call for attempting to resolve disputes in the employment context. If proceedings are filed with the Employment Relations Authority (ERA) before mediation has occurred, the Authority Member will usually direct the parties to attend mediation before any hearing takes place. Mediation is considerably more efficient and cost-effective than a full hearing, with a good proportion of disputes being resolved at this level.

The purpose of mediation is to provide an informal opportunity for the parties to reach an agreement they can live with and move forward. In reality, a high percentage of mediations result in some kind of settlement between the parties, often with an agreed mutual parting of the ways or a resignation, and some form of monetary compensation paid to the employee. Mediation can be used in employment to help resolve a wide range of disputes including personal grievances for unjustified dismissal or disadvantage, restructuring, bullying, workplace stress issues or issues arising out of the interpretation of an employment agreement.

What happens at mediation?

Mediation is basically a facilitated meeting between the parties to an employment dispute. If using a mediator from the Ministry of Business, Innovation and Employment (previously known as the Department of Labour) the service is free. At the onset of the mediation, the mediator lays down the ground rules for both sides to put their version of the facts forward and to then discuss a settlement or way forward. Basically, each party is to have a turn giving their version of the events, without interruptions from the other.

Often, the mediator will ask both parties questions to help clarify things, in order for the mediator to assess each parties risks if the dispute does not settle and goes on to the ERA. Once the issues have been thoroughly explored and discussed, the parties move into separate, smaller break out rooms, in order for negotiations to begin. The mediator then goes between the two rooms assisting the parties to reach an agreement where possible. However, there is no set order of proceedings and each mediation plays out differently. Sometimes the parties may meet again to further discuss matters, or negotiate a settlement agreement via mail correspondence, emails or phone discussions.

Unlike a court, in mediation there is no third party deciding the outcome of the case. The only enforceable outcomes are those that are mutually agreed, signed off by each party and the mediator, and recorded in a section 149 settlement document (which the mediator provides on the day). Where the parties agree to particular terms of settlement, these will be legally binding and enforceable. Parties are now also able to agree in writing that a mediator make a recommendation under section 149A of the Act that, unless objected to within an agreed timeframe, will be final and binding.

Recommendations are having some great success since their introduction on 1 April 2011.  They assist in resolving a dispute where the parties are close to agreement but just can’t quite get there, or even where they are poles apart. Having a third party recommendation by the mediator takes some of the emotion out of the equation, and often helps the parties to accept what a fair and reasonable resolution would be. Alternatively, under section 150 of the Act the parties also have the option of agreeing to request that the mediator be empowered to make a decision that will be binding on both parties, however since the introduction of section 149A recommendations this option has become less appealing.

It’s important to note that in accordance with section 148 of the Act, mediation is entirely confidential. This means that parties can be frank and honest about their positions, which creates the best possible platform for settlement to be reached. Statements made in the context of mediation are not admissible in court and this means parties can admit fault or take responsibility in the interests of reaching agreement.

Preparing for mediation

When preparing for mediation it helps to write things down. First prepare a mediation summary which outlines the key points you want to address on the day – your version of the events. Next, think about your desired outcome, which should be realistic and fair to both parties. You should also consider what are bottom lines for you on which you cannot shift beyond a certain point, whether monetary or otherwise. This means that when the time comes to discuss the possibility of a settlement, you will have an idea of what is important for you to achieve, and also of anything you are not prepared to let go of.
It is also helpful to have an opening offer in mind prior to mediation as this will save time during the process itself. Good advice is important here as it can assist with what might be unrealistic expectations for settlement; therefore always talk to one of the team at Paul Diver Associates first. We can help you prepare an appropriate mediation strategy.

Conclusions

Mediation can be a highly effective way to solve employment relationship problems. Properly utilised, it can mean real savings in time and legal fees, and helps avoid the stresses and disadvantages involved in escalating the dispute through to the ERA. Further, whereas Authority and Court cases tend towards a “winner takes all” type of outcome, mediation generally allows both parties to come away with upsides if a settlement can be reached, and it allows for more flexible and creative resolutions. It also might help to know that in the ERA, employers only win appropriately 1/3 of the grievance cases, so settlement at mediation is usually preferred!

If you have an employment relationship problem or dispute on your hands, give us a call and we can help you through it. One of the Senior Associates in our Conflict Resolution can give you a risk analysis, assist you with a mediation strategy, and can even attend the mediation with you when the time comes. We’re here to help you with as much or as little assistance as you need.



Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.