Employment: the role of mediation

Employment is personal. Good employment is defined by personal ties such as loyalty, obedience, trust and confidence. When things go wrong, it can become even more personal. What can be done to find peace before war breaks out in court or tribunal?

Litigation is essentially confrontational and judgemental. The reality is that there is rarely any scope for rescuing the relationship once it has been dragged through the courts or tribunals, with hostile cross-examination and contested findings of fact.

Moreover, tribunals very rarely reinstate. According to statistics published by the Employment Tribunal Service, reinstatement or re-engagement was ordered in only 0.1% of all unfair dismissal cases that went to a hearing in 2003-04 (just 0.03% of all cases disposed of with or without a hearing).

Increasingly, however, employment disputes are being resolved through mediation. Over the last 12 months, the firm’s lawyers have both acted for employers in mediations and also mediated disputes between employer and employee. In contrast to litigation, mediation is consensual: the mediator cannot impose a solution. He can only propose, and the parties ultimately remain in control of the process. It is confidential. It can see a proper exploration of the real issues. It is likely to be much less costly in terms of management time and legal fees as compared with litigation. It is also possible for mediation to take place whilst the employment relationship still exists; whereas litigation almost invariably involves termination and an irretrievable breakdown in the relationship.

In May 2004, mediation was given a qualified boost by the Court of Appeal in Halsey v. Milton Keynes General NHS Trust. It ruled that, although the court has no power to order mediation, a party who unreasonably refuses to mediate may be punished in costs even if ultimately successful. This may help to bring reluctant parties to the mediator’s table.

Employers should consider incorporating a mediation clause in their contracts of employment to commit both parties to attempt to resolve any disputes through mediation before having recourse to litigation. This would harmonise well with the approach of the Employment Act 2002 (Dispute Resolution) Regulations which came into force on 1 October 2004 and promote attempts to resolve disputes within the workplace by use of internal dispute resolution procedure. Where they fail, there is much to be said for involving an outsider in a formal mediation process rather than rushing straight off to the local employment tribunal or district registry of the High Court.