What you need to know if an employment dispute goes to mediation

Most employment disputes will end up at mediation at some point. This is because the Employment Relations Authority (the Authority) has a duty to consider directing the parties to attend mediation if they have not done so already by the time that they get to the Authority. It is very rare that the Authority will not direct a matter to mediation. For this reason, parties will also often agree to attend mediation voluntarily before getting to that point.

Therefore, it is good for employers and employees to familiarise themselves with the process and to know what to expect at mediation.

What is mediation?

The Ministry of Business, Innovation and Employment (MBIE) offers a great free mediation service that can assist parties to resolve employment disputes.

Mediation can be used while an employee is still employed, or after termination where an employee has raised a personal grievance or other dispute.

Mediation involves an impartial mediator facilitating a meeting to help employers and employees resolve a dispute. Depending on the nature of the issues, resolution could involve a range of different outcomes. If the employee remains employed, the discussion may focus on resolving the issues to enable the employee to confidently return to work, or it could turn into a discussion around the employee’s exit from the business. If an employee is no longer employed, resolution will usually be focussed on some sort of monetary settlement.

While it is not required, it is common for legal representatives to attend mediation alongside employees and employers.

Getting a date

Mediation can be applied for on MBIE’s website by either party, or their representative. When the employee remains employed, a mediation date will be prioritised, and can usually occur quite quickly. When the employee is no longer employed, it can take a little longer due to MBIE availability. However, often you can get a mediation date within a month of applying for mediation (depending on the parties’ availability).

The current default is that mediation will be conducted remotely by Zoom, unless an in-person mediation is specifically requested. Generally, we find that remote mediations work well, but recognise that there may be circumstances where an in-person mediation may be more appropriate.

The mediation process

At mediation, the parties and their representatives will sit around a table (in person or virtually) with a mediator and each will have a turn at presenting their position (also known as a ‘opening’). The employee will usually go first, followed by the employer. It is ultimately up to an employee to outline their claim and to set out what outcomes they are seeking from mediation.

The parties will then retire to separate breakout rooms and the mediator will speak to them in turn and assist with negotiations by going back and forth between the parties. Where the employee has already left their employment, it is unlikely that the parties will see each other again after this point. However, if the employee is still employed, then the discussion may be more collaborative.

The mediator can only help the parties to reach a mutual agreement and will not impose a decision or outcome on the parties. If an agreement is reached at mediation, the mediator will prepare a record of settlement for the parties to sign on the day.

Benefits

There are many benefits to mediation. Not only is it a free and confidential service (the process and negotiations are always without prejudice), but it is well proven to settle employment disputes quickly and without requiring the parties to endure lengthy, expensive and public litigation.

Preparation

In our view it is crucial that the parties are well prepared ahead of mediation, including having a written opening statement to read out. While the parties would have already likely exchanged some correspondence about their respective positions prior to mediating, a good opening statement is also for the benefit of a mediator, who plays a big part in pointing out the risks and strengths to each party throughout mediation.

Preparation also means having an understanding of the legal issues at stake and the potential outcomes if the case were to proceed to the Authority. This is why it is helpful for both employers and employees to have a representative throughout the process. Generally, having a representative also alleviates the pressure and stress of the process for the parties, and removes focus from the emotions involved to the issues at hand.

Our specialist employment team regularly prepare for and attend mediations with clients. They are also experienced at negotiating employee exits and settlements. Should you or your business require assistance with this, please do not hesitate to get in touch.