The Employment Relations Act 2000 (the Act) advocates mediation as the leading method of solving problems in the employment relationship (except for the enforcement of employment standards).
In this best practice guide for employers, we outline mediation, the mediation process, dispute resolution, and other key factors relating to mediation. Please note that the information below is general and is not intended to act as advice.
What is Mediation?
Mediation is a voluntary process and involves the engagement of a neutral third party,
Once the employer and employee have agreed and committed to finding a mutually acceptable solution to their dispute or employment problem, they can partake in mediation. The mediator’s role is to facilitate movement in the parties’ respective positions by creating a climate of confidentiality and bargaining in good faith. The mediator is often seen as the “go-between” who aids the parties in striking a deal.
The main characteristics of a mediation process are:
- Aimed at reaching consensus (voluntarily)
- Non-legalistic and simple
- Focus on compromise and resolution
The advantage of mediation is that it is quick, and cost effective compared to costly litigation, which often ends in settlement anyway
Mediation is normally used to resolve disputes between an employer and employee, although sometimes mediation is used to settle disagreements involving only employees.
Mediation is a semi-formal process. It does not have the same formalities as those observed in a Court. Employers and employees will not be placed under oath or cross-examined.
Employment Relations Disputes - Mediation Services
The Employment Relations Act 2000 (the Act) established a framework in terms of which employers and employees can resolve relationship problems or disputes. When a employment relations issue cannot be resolved internally, the first port of call is the (Ministry of Business, Innovation and Employment (MBIE).
The MBIE offers a free mediation service to any employer or employee with an employment problem. The role of the mediator is to listen to both parties and provide expert advice as to each party’s legal position.
Often, the mediator will listen to both parties’ versions and arguments and then will break away and meet with the employee and employer separately in an effort to settle or resolve the employment problem. During these separate meetings the mediator usually advises the parties as to the merits of their case and encourages them to reach agreement with the other party. Mediation services are confidential in nature and are conducted on a without prejudice basis. The premise being that the parties can speak freely during mediation without it being used against them later.
If, as a result of mediation, the parties agree to settle their dispute, the mediator will sign a record of settlement. Once signed, this agreement becomes final and binding on the parties and may be enforced by them.
If mediation is not successful and the parties cannot reach agreement, the matter may be referred to the Employment Relations Authority and in limited circumstances, the Employment Court.
During mediation, employers should keep in mind that:
- Everything discussed in mediation is kept private. All information provided for the purpose of mediation is confidential.
- Mediation is impartial. The mediator will not take sides and is neutral.
- The MBIE offers free mediation services. If the employee decides to hire a representative, there may be costs associated with their service.
Is mediation voluntary?
Employers and employees are not required to use mediation services when there is an employment relationship problem.
However, the act promotes mediation as the main way to resolve these problems. With limited exceptions, the Employment Relations Authority must direct the parties to mediation and the Employment Court has the authority to direct the parties to undertake further mediation with a view to resolving the problems between them. The court must consider mediation as an option throughout Court proceedings.
Confidentiality and without prejudice status of mediation proceedings
The Act endorses the fundamental premise that mediation is confidential. Statements, admissions, or documents created or made "for the purposes of mediation''. and information disclosed orally during mediation, must be kept confidential by the parties involved, the mediator, officials and any assistant to the mediator or the parties
Mediation is conducted on a without prejudice and confidential basis so as to provide a platform for the parties to speak freely with the aim of resolving their dispute and reaching settlement.
If, however, the parties are unable to reach settlement, then any concessions or admissions made in an attempt to reach settlement cannot be used in the Authority or Court proceedings at a later stage.
Confidentiality in mediation is absolute, except where public policy dictates otherwise.
Only documents which come into existence independently of mediation are excluded from the confidentiality provisions and may be admissible in the Employment Relations Authority or Court.
The confidentiality rule does not apply:
- Where mediation services are provided to assist with collective bargaining
- To information that would otherwise be admissible and that existed independently of the mediation
- Information collected for research or education purposes, provided the parties cannot remain anonymous or cannot be identified.
The mediation process
There is no set procedure that a mediation will follow, with the process differing from case to case. However, there are certain actions and activities involved in mediation.
These include:
- Early assistance - Early assistance may be conducted by the mediator through email and telephone conversations. A mediator will ascertain if the dispute can be resolved promptly without the need of a meeting.
- Meeting - The parties will meet with a mediator in a semi-formal environment, discuss the problem and explore possible solutions. Often meetings are conducted over video conference.
- Giving the mediator powers - Both the employer and employee can agree that the mediator can be provided with the power to make a written recommendation or a binding decision.
- Record of settlement - If both parties agree to resolve their dispute, it will be recorded in a record of settlement. This is a legally binding document. Once a record of settlement is signed by both parties and a mediator from the MBIE, neither party may lodge a problem with the Employment Relations Authority or the Employment Court if it relates to the same issue. They may make a referral to the Authority to enforce the settlement agreement, should one of the parties fail to honour the terms thereof.
Independent Mediators
Mediators are required to be independent; this means that the mediator is not employed by or acting in the interests of either parties. To avoid any accusations of impartiality, mediators are not normally the managers or direct colleagues of the parties involved. In addition, they should not be employed by or contracted to the Employment Relations Authority or the employment Court.
A mediator’s role is to:
- Encourage both parties to speak openly and identify the real issues.
- Identify common interests and points of agreement between the two parties.
- Help the parties find resolution to their problem that may not seem immediately apparent.
- Explore settlement options and encourage both parties to negotiate.
- Find creative solutions that allows both parties to put the issues behind them.
- Provide an assessment of the risks if the problem is not resolved and proceeds further.
Maintaining healthy workplaces with Peninsula
Being a small business owner in New Zealand means you have many responsibilities and duties. Keeping track of all your obligations is challenging especially if you are in a dispute or disagreement with your employee. In such situations, mediation is a vital step and can help both parties reach an agreement. Peninsula has worked with several businesses, supporting them in disputes and mediation in matters of employment relations and workplace health and safety. We understand the needs of business owners and tailor our advice to their situation and industry. For free advice on dispute resolution in your workplace, call Peninsula day or night, seven days a week.