With the annual cost of dealing with an employment tribunal clocking in at an average £20k, businesses are increasingly turning to mediation to resolve their workplace disputes. So does it work and is it the best solution? Annie Hayes investigates.

What is mediation?

Fallings out at work are triggered by numerous reasons: behaviour, performance, sickness absence, attendance, relationships between colleagues, theft/fraud, bullying/harassment, sex discrimination – the list is seemingly endless. What is for certain is that if they aren’t resolved effectively and in a timely fashion they can easily and quickly escalate to full blown employment tribunal (ET) claims.

The Chartered Institute of Personnel and Development (CIPD) estimates that not only do these tribunal claims cost dear but they also put a drain on management time. Businesses spend almost 10 days on average dealing with an individual claim, while 33% of employers also report non-financial negative effects. With these figures in mind, it becomes ever more apparent why mediation is becoming more popular. So what exactly is it?

Dr Frank Hanna, of the Mediation Agency, defines mediation as: “The use of an independent, neutral mediator who structures the talk and meeting.”

To put mediation into perspective, it’s useful to look at the alternatives. Keith Mizon, head of individual dispute resolution for Acas, explains the various conflict management options:

• Avoidance: the wait and see or avoid option. The passage of time might help but the outcome is fairly unpredictable.




• Collaborative approach: getting someone else to decide when it becomes obvious that the dispute can’t be resolved by existing parties. There might be a need to establish a legal precedent. With this option you tend to get a ‘win-lose’ situation or a ‘lose-lose’ situation (an employer fights an ET claim and may win it but at the same time loses money). The statistics show that even those that win are unsatisfied.




• Power play: you see this in collective disputes –coercive action – be it a strike, lock out etc. Possible outcomes: win-lose or lose-lose.

It is hoped that mediation will put an end to costly tribunals. Yet Hanna believes the UK is as much as six to seven years behind America when it comes to grasping the mantle of mediation as a serious contender for resolving work-based disagreements.

Such is his passion for the subject, he set up the Mediation Agency following five years working in the US as an independent mediator: “I mediated dispute after dispute; as a result, over 80% of cases got dealt with without having to see the inside of a court room. Almost without exception, it works.”

The recent Gibbons Review is one step closer to advancing towards a US-style acceptance of mediation. Commissioned by the Department of Trade and Industry, the report spells out the key benefits – namely that mediation is a cost-effective solution to resolving disputes in the workplace.

According to Hanna, the report says “out loud” what has been played out in the US for the last eight to 10 years. And early indications show that mediation take-up is on the up despite the slow start – one in four employers use internal mediation, whilst one in five employers use external mediation (including Acas).

Neutrality

Of course nothing is guaranteed and getting the concept of ‘neutrality’ right is absolutely crucial if mediation is going to work. Hanna explains that the concept is still fairly embryonic within the UK: “Neutrality is not what you think of yourself but what other parties think of you.”

Perception, says Hanna is everything. Feedback from delegates on his mediation courses speak volumes – at the start of the course, mediators are asked to put their hands up if they think they are ‘prejudiced’ or ‘bigotted’. No-one does, says Hanna. But when he repeats the question at the end of the course it’s nearly a full-house.

Mizon says that the whole issue begs the question over whether management can ever be neutral or impartial: “It can happen in large organisations but you can never be assured that a mediator is 100% independent.”

For HR, the issue over perception does spell out some problems, yet Hanna does not believe that by virtue of their title, HR should be excluded from selection. Training is really the crucial element if HR is to be accepted as truly independent mediators.

According to the CIPD’s survey, however, this is just where many organisations are going wrong. Just 30% of respondents train any employees in mediation skills. Unsurprisingly, training is more common in the public services (53%) than in other sectors (manufacturing and production, 15%).

Acas now runs its own certificate in workplace mediation in a further sign that demand for mediation skills is increasing. A central lesson for any mediator, says Mizon, is: “If you can’t make it better, for goodness sake don’t make it worse.” Untrained mediators, say Mizon, are a danger.

Constraints

Of course there are further obstacles. Esther Smith, partner at Thomas Eggar LLP, warns: “Mediation suggests to both parties that there will be an agreement reached between them on the issues which is not always (if ever) the case. Sometimes an employer needs to make a decision as to who is right or wrong in a particular situation and not all issues can be resolved effectively by way of mediation.”

The CIPD further notes the feedback from its members, which shows that timings can also be a problem. The Gibbons Review shows that more than nine out of 10 individuals leave their employment before or shortly after submitting a tribunal claim. Mediation, in this case, is unlikely to be attractive to employers as a means of resolving issues affecting people who are no longer employed, or to those individuals themselves.

It is also more likely to be effective at an early stage, ‘before attitudes have hardened’, and getting management buy-in can be problematic: “Managers may also feel that by accepting mediation, they are admitting they may have made a mistake,” the CIPD notes. “Managers may prefer that potential disturbance of relationships should be managed and remedied internally, with resource to third party intervention seen essentially as a backstop.”

Members also feel that mediation is seen as less appropriate in disciplinary cases where employers believe existing procedures generally work well. Mediation will generally be less effective where one or other party believes that an issue of principle is at stake, says the CIPD.

The constraints may just be worked out with the £37 million cash injection Acas was recently awarded by the government, in order to expand its mediation services. The legal world, however, could well be shuddering at the thought that the growth of mediation may cut them out of the dispute process altogether.

But those that pick up the bill should welcome the movement towards mediation as a viable option, that not only saves money, but time and face in what can often be not only a cash draining experience, but an emotionally charged one too.