Lyndall Humphries, Senior Associate
Alternative dispute resolution (“ADR”) is now a familiar part of the workplace relations landscape, both before and after the commencement of litigation. There are a lot of cases in which ADR is not only appropriate but a much better way of reaching an outcome than by way of legal proceedings.
WHAT IS ADR?
ADR encompasses a wide range of processes designed to resolve disputes without judicial determination. ADR most commonly involves an independent person helping people in dispute resolve the issues between them. The flexibility of ADR means that it can be used for almost any kind of dispute and is particularly well suited to workplace grievances including where there is an ongoing employment relationship.
In some cases it is a voluntary process engaged in with the agreement of all parties and in other cases legislation or an industrial instrument may require parties to participate in a particular form of ADR. The name ADR suggests that it is an alternative to litigation. However, these days, it is often incorporated into the litigation process or used alongside legal proceedings.
TYPES OF ADR
There are many different types of ADR processes that can be used to manage a dispute. This article focuses on mediation due to its suitability for workplace disputes. However, we also draw your attention to other types of ADR commonly used in the workplace:
When a workplace dispute has arisen, negotiation is the most simple and flexible form of ADR. This process is suitable if the parties can discuss matters directly and want some control over the outcome. Settlement negotiations can be conducted by telephone, in correspondence or face-to-face. If there has been a breakdown in the employment relationship, it may assist to have another person, such as a lawyer, helping with the negotiations. Employment lawyers are experienced at resolving workplace grievances and negotiating outcomes for clients. Either party to legal proceedings may serve an offer of settlement or compromise on the opposing party. Offers to settle may also be made by way of a Calderbank offer. Consideration needs to be given to the potential cost consequences of making or rejecting offers of settlement in the context of negotiation and litigation.
Conciliation is a similar process to mediation. A conciliator will assist the parties to identify the disputed issues, develop and explore possible options and ultimately reach an agreement. The conciliator may take an advisory role and usually has specialist knowledge. Conciliation can be helpful when parties want an expert view or where self-represented litigants would like to reach an agreement on technical legal issues. Conciliation may be voluntary, court ordered or required as part of a contract or industrial instrument.
Arbitration involves the parties to a dispute presenting arguments and evidence to an arbitrator for determination. The arbitrator’s decision is binding and enforceable. The arbitrator may be a lawyer and usually has specialist knowledge. Arbitration is the most similar process to legal proceedings and parties are often legally represented. Arbitration may be useful when the parties want a decision made for them other than imposed by legal proceedings.
The flexibility of ADR means that hybrid models of the above processes are sometimes used. In addition, online ADR is becoming increasingly more prevalent as ADR is taking place via email, Skype and video conferencing.
INTERACTION WITH LEGISLATION
The emphasis on settling disputes by means of ADR processes is sometimes set out in legislation. For example, the Fair Work Act 2009 (“FW Act”) requires that all modern awards include a term which sets out a procedure for resolving disputes between employers and employees about any matter arising under the modern award and the National Employment Standards. In addition, when making an enterprise agreement, the FW Act requires the parties to include a dispute resolution clause. Enterprise agreements lodged without such a clause will not be approved. The FW Act also requires that parties to a contested unfair dismissal or general protections dismissal application attend a conciliation conference.
FOCUS ON MEDIATION
Mediation is the process of assisted negotiation guided by an independent and impartial professional who helps to clarify the issues in dispute, identify options, consider alternatives and jointly agree the details of any settlement. The mediator generally does not give opinions or advice.
Parties are not restricted to discussing matters that would be the subject of legal proceedings and parties can generally bring any issues to the table. It is interest-based in that parties are free to reach settlements that are based on interests rather than legal entitlements.
Mediation is confidential and this is essential to encourage the parties to engage in open dialogue. Anything that is said during discussions cannot later be used as evidence in litigation, much like without prejudice negotiations.
Decisions on settlement are made by the parties themselves and, as there is no imposed outcome, mediations do not always conclude with resolution of the dispute.
It is important that those attending the mediation have the necessary authority, or delegated authority, to settle a legal claim. This enables the mediation to end with clarity about whether the dispute has settled, in full or in part, and if so what the terms of settlement are.
CHOOSING A MEDIATOR
Mediators do not have to be lawyers, but they often are. Parties attending a mediation on a workplace dispute are likely to engage a mediator who is a workplace relations specialist. In addition to expertise, personal style and approach will impact on the mediation’s success.
REPRESENTATION AT MEDIATION
Mediation is about establishing a dialogue between the parties and who is best placed to do this will depend on the particular case. Whether it is a lawyer or the parties themselves who speak will depend on status, confidence and impact. Regardless of who speaks, a lawyer may assist by framing realistic expectations with regard to legal rights or by drawing up the settlement agreement.
THE MEDIATION PROCESS
Mediation is not as informal as one might think. It uses a structured approach to identify the issues in dispute, discuss desired outcomes and explore possible solutions whilst encouraging the parties to be realistic in their expectations.
Generally, the first phase is a joint meeting and the second phase is separate private sessions with the mediator shuttling between the parties. The final stage of the mediation process may be the settlement agreement and closure. The mediator will ensure that the parties are clear about what has been agreed in writing at the time.