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Navigating the dispute resolution process in the employment jurisdiction can be tricky. This article aims to spell out the key considerations for those involved in or contemplating mediation, which is the first step in this process.
Mediation as first port of call
If you are involved in an employment relationship problem, then you are likely to attend mediation at some point. That is because of the emphasis that the Employment Relations Act 2000 (Act) – one of the key pieces of employment legislation – places on mediation. One of the Act’s key objects is to promote mediation as the primary problem-solving mechanism in this space.
Where a matter comes before the Employment Relations Authority (Authority) for determination, the Act requires the Authority to consider whether the parties have attempted to resolve the matter through mediation, and whether it is appropriate for the parties to be directed or redirected to mediation (yes, you may be referred to mediation even when you have already attended!). Under the Act, the Authority could even refer parties to mediation during its investigation process.
While parties can sometimes be gung-ho to proceed to litigation, mediation is proven to be highly effective in resolving employment relationship problems. For example, in 2023, the Authority referred 1,352 matters to mediation, while the number of determinations issued in the same year was nearly half that figure.
Even where a resolution is not reached, mediation can be beneficial in getting to the Authority faster, as the Act requires the Authority to generally prioritise matters where parties have attended mediation over those which have not.
What to expect
Mediation is what the parties make of it; it is a flexible and informal process, and how it works in practice may look different from matter to matter, depending on the intricacies of each situation and what the parties are comfortable with. With that being said, the main points to note are:
- Mediation is voluntary – parties are not required to attend (unless directed to by the Authority), and parties may leave at any point (although this may not be conducive to good faith, so parties should tread carefully in this respect).
- Mediation involves a mediator, who is an independent third party. Parties may choose between the Ministry of Business, Innovation and Employment’s Mediation Service (Mediation Service), or a private mediation service. The major benefit of the Mediation Service is that it is free, although there are often significant wait times in securing a mediation date through the Mediation Service.
- Mediation for parties who are still in an employment relationship will generally be set down for one day (usually 7 hours), while mediation for those who are no longer in an employment relationship will generally be set down for half a day (usually 4 hours).
- The mediator will not take sides, but it is the mediator’s aim for the employment relationship problem to be resolved through mediation. The mediator may advise parties as to next steps or available options and the associated risks should resolution not be achieved.
- The mediator does not make any decisions or recommendations, unless both parties agree to this.
- Parties may choose whether to attend in person or by Zoom. Where a mediation is in person, the parties will each have their own break out room. Generally, parties are spoken to individually by the mediator first, and they will then come together in one room, where each side has an opportunity to speak in a joint session. However, parties can request not to be in the same room as each other if necessary.
- Unless self-represented, the parties’ representatives will generally be the ones speaking, but it is possible for individuals themselves to speak if they would like to. Once the joint session has concluded, the parties will return back to their own break out room and negotiations commence, with the mediator going between each room.
- Mediation is not like court; while parties may ask questions if and as permitted by the mediator, they will not be permitted to cross-examine each other, and evidence is not required.
- Parties are able to take a break, or leave, at any point.
- Matters discussed during mediation are confidential and without prejudice (meaning that any concessions or statements made cannot later be relied on in proceedings).
What happens next?
If resolution is reached through mediation, the mediator (or the parties’ representatives) will draft a record of settlement containing the agreed terms, which will be signed by the parties and the mediator. If the employment relationship is ongoing, then a memorandum of understanding may also be agreed to.
If a resolution cannot be reached through mediation, then the parties can file proceedings in the Authority if they have not already (although it is, of course, always an option for the parties to decide not to pursue the matter further).
There has been a lot of recent media attention about the delays in getting mediation through the Mediation Service. Jim Roberts, Partner in our Employment Law Team, is now AMINZ certified and he is available to help with private mediations for urgent employment matters. Please contact us if you would like to explore this option.
Of course, if you have any other questions about employment relationship problems, mediation or the disputes resolution process, please get in touch with our Employment Law Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
