Getting the best out of mediation

Sarah Cates, Senior Associate at Cullen – The Employment Law Firm, takes a look at how mediation can be used to definite advantage when it comes to matters arising during employment.

Mediation for employment matters is often perceived as a mandated step in the litigation process, or simply a means to discuss a settlement agreement. However, this view ignores the value that mediation can bring to an employment relationship and the full range of options that parties have in respect to how they mediate a dispute.

Conflicts between colleagues

Mediation is commonplace between employers and employees, even when the conflict exists between colleagues. However, mediation can also help in resolving conflict between colleagues, if used early enough.

Mediation can also help in resolving conflict between colleagues, if used early enough.

Understanding why these conflicts arise informs how they can be resolved. Causes of conflicts between colleagues can include communication and personality differences, poor performance, disputes over approaches and authority, lack of cooperation, competition for limited resources, differing access to information, systems or structures, or divergent values and interests.

Because mediation is a voluntary process, both employees must agree to attend mediation. Outcomes of such mediations could include commitments from the employees to make changes to the way they work or communicate with each other. Often a representative of the employer participates in some of the mediation process. This is particularly important if systems or structures need to be changed.

Because mediation is a voluntary process, both employees must agree to attend mediation.

Private mediators

By default, many employers use the Ministry of Business, Innovation and Employment’s (MBIE’s) publicly funded Mediation Services. However, parties can always elect to engage a private mediator.

Private mediation allows for increased flexibility. Engaging a private mediator will enable you to choose the mediator based on the desired skill set, style and experience for the dispute. You can also choose the date, time, duration and location of the mediation. In a private mediation, it is possible to incorporate organisational culture or tikanga Māori into the process.

Private mediators generally provide a more comprehensive service, including intake interviewing and pre-mediation conferencing, and ‘after-care’ or follow up. Private mediators are generally available at short notice, which can save operational costs and avoid escalation of the problem or entrenchment of positions. An agreement entered into during a private mediation is usually sent to an MBIE mediator to be certified under section 149 of the Employment Relations Act 2000.

Lawyers

The importance of a lawyer or other representative at mediation will depend on the circumstances. While engaging a lawyer increases costs, it can also mean better and cheaper outcomes for the employer. If a dispute not resolved at mediation is likely to lead to litigation, it is important to have a lawyer present. A lawyer can advise on how the law informs the matter and provide a mediation strategy and advice. In addition, information from mediation can help with litigation strategy and preparation.

Legal framework

Any statement, admission or document created or made for mediation, and any information disclosed orally during mediation and for the mediation, is confidential and inadmissible in legal proceedings, unless the parties agree otherwise or except as required by law. Public policy exceptions, for instance, unlawful conduct such as blackmail, are not protected. Confidentiality also does not apply to collective bargaining mediations.

Terms of settlement are final, binding and only enforceable in the Employment Relations Authority, if certified by an MBIE mediator. Terms of settlement not certified by an MBIE mediator are only enforceable through the Disputes Tribunal or District Court.

There are limitations to the finality of terms of settlement, and how this ‘full and final’ clause is drafted will be important in determining the limitations. Terms are only usually full and final in respect of the claims that both parties were aware of at the time they entered into the terms of settlement. Furthermore, the terms cannot be enforced if they contravene the Contractual Remedies Act 1979 and Illegal Contracts Act 1970 or are unlawful at common law.

Creative outcomes

The monetary remedies available at mediation are well known; these include payment of wages, compensation for “hurt, humiliation and injury to feelings” under section 123(1)(c)(i) of the Employment Relations Act 2000, payment of a benefit and payment of an employee’s legal costs.

However, non-monetary benefits can also be helpful to resolve conflict and are limited only by the parties’ imaginations. Common non-monetary remedies include apologies, exchange of property, certificates of service, a reference, an agreed statement to staff and/or stakeholders and a non-disparagement clause.

Creative outcomes include:

• retraction of warning

• conversion of dismissal into a resignation

• professional development, training or services

• cleaning or sealing of personnel file

• agreed on warnings

• agreed expectations

• counselling

• amendment to an employment agreement or position description

• change to reporting line

• agreement to waive restraints or other covenants

• farewell morning tea

• an apology recorded only in the terms of settlement

• acknowledgement that the employer could have dealt with matters better

• acknowledgment of the employee’s distress.

Sarah Cates is a senior associate and mediator at Cullen – The Employment Law Firm. She is also a specialist employment lawyer, negotiator and litigator. As such, she has a thorough understanding of the legal and practical context of employment relationship problems, as well as the needs and interests of parties.