A response to Michael Gibbons ( Annex to CIPD response to DTI consultation Success at work).
Date: 1 October 2007
Gibbons review heard evidence that early mediation or conciliation in the workplace is the key to resolving disputes before irretrievable breakdown in relations occurs. CIPD wholly agrees with this proposition. The issue is how far it may be possible to place more weight on such “alternative dispute resolution” mechanisms so as to reduce the volume of claims reaching employment tribunals and improve the quality of outcomes. How far can experience of resolving disputes in other areas such as family or commercial law be applied to the field of employment?
Conflict in the workplace is a reality; anecdotal evidence suggests it may be increasing. The CIPD survey Managing Conflict at Work (See Reference 1 below) found that the main causes of conflict in order of importance were:
- sickness absence
- relationships between colleagues
- sex discrimination.
Workplace conflict damages business performance by reducing levels of employee engagement.
There is a clear business case for mediation, which can be summarised as follows:
- Time – mediation is often completed in one meeting, compared with the two days or more typically required for tribunal hearings
- Legal representation for the parties is optional and, in the absence of a legal framework, less critical to outcomes
- Proceedings are confidential so that parties are less likely to be trapped by positions adopted earlier
- Mediation takes a problem-solving approach to complaints, which reduces disruption and future problems
- Agreement is less likely to mean that one party wins and the other loses, leading to lower employee turnover
- The process is evidently fair since both parties contribute to finding a solution
- “Win-win” solutions support trust-based relationships and a culture of good people management.
For many employers, however, the business case will be founded largely on the cost of dealing with tribunal claims. The CIPD survey Managing Conflict at Work (Reference 1) found that the average annual costs to employers of dealing with ET claims (excluding management time) was almost £20k. But management time is highly significant: businesses spend almost ten days on average dealing with an individual claim (including 7.7 days senior managers’ time). 33% of employers also report non-financial negative effects. The Gibbons review quotes data suggesting that the average cost of defending an individual ET claim in 2005 was around £9000.
Other costs fall on the Government in terms of supporting the employment tribunal system and associated conciliation services, and on individuals who may suffer adverse effects on their health, strain on relationships inside and outside the workplace and damage to future career prospects.
What can CIPD do to encourage and support the wider use of mediation?
CIPD is currently discussing with its members the scope for doing more to encourage the wider use of mediation by employers. We plan to:
- urge employers to include provision for mediation in employment contracts, and place on our website appropriate forms of words. In many organisations, the procedures relating to individual grievances currently provide for some recourse to mediation or conciliation at an appropriate stage
- raise awareness and understanding of mediation, for example through participating in conferences, talking to branches and encouraging them to hold workshops on early dispute resolution, undertaking further research into dispute resolution, commissioning publications and writing articles for journals such as People Management. The objective would be to raise awareness and make the business case for mediation
- undertake, hopefully in partnership with others, a survey and case studies of mediation since evidence about the use of mediation in the UK is currently very limited. This could explore why some employers use mediation and why others do not, and the circumstances in which mediation is most likely to be successful
- urge the Government to commission a strategic review of the way in which workplace dispute resolution in the UK is managed and funded, and the longer-term role of mediation and other forms of alternative dispute resolution
- review the take-up of current CIPD commercial training courses on mediation skills for managers, and the implications for course design. We are currently discussing with Acas the scope for developing joint training in conflict management which could be targeted at both HR and line managers. The key to marketing such courses may lie in focusing on themes that are recognisable to employers, such as “difficult conversations”, bullying and harassment, stress and mental health and managing difference
- discuss with Acas the issue of accrediting mediators, to encourage the use by employers of external mediators
- review the emphasis on conflict resolution and mediation skills in the context of the current review of the CIPD professional standards.
Constraints on the use of mediation
How far can mediation be expected to take more of the strain of handling workplace conflict? Some employers, particularly in the public sector, have invested in training their staff to undertake mediation; others make use of mediation services provided by Acas or other external sources. However mediation is not the only option for organisations that seek to reduce or deal with workplace conflict. Investigations by outside persons may help to create a shared understanding of the facts which will facilitate early resolution. Employee Assistance Programmes can also be useful in providing employees with a way of raising issues which are worrying them.
CIPD members have underlined a number of practical constraints on the use of mediation, particularly if it is seen as a vehicle for reducing the volume of claims to employment tribunals:
- The Gibbons review shows that more than 9 out of 10 individuals leave their employment before or shortly after submitting a tribunal claim. Mediation 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
- As the Gibbons review fully accepts, mediation is more likely to be effective if it is deployed at an early stage, before attitudes have hardened. But this depends on organisations’ ability to identify and deal with issues at an early stage, which is in turn dependent on the quality and skills of line managers. This can be tackled by raising awareness and providing training but it is important to recognise that this will take time
- In any case, by the time issues reach the stage where individuals are seeking to pursue their claim at a tribunal, the scope for mediation to achieve mutually agreeable outcomes will often have been seriously compromised. This does not mean that mediation may not be worth attempting at this stage, but it does mean that it is less likely to be attractive to one or both parties
- Some managers are resistant to the idea of mediation since it seems to take responsibility for dealing with issues out of their own hands. Managers may also feel that by accepting mediation they are admitting they may have made a mistake. Managers may prefer that potential disturbance of relationships should be managed and remedied internally, with recourse to third party intervention seen essentially as a backstop
- Members distinguish sharply between discipline and grievances as suitable subjects for mediation. Disciplinary procedures are essentially management decision making procedures with provision for appeals; grievances procedures are concerned with addressing complaints and arriving at an acceptable settlement or other outcome. 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.
- Will mediation be seen as fair to both sides? Any suggestion that mediation will inhibit individuals accessing their statutory rights will damage the chances of tribunals actively supporting and promoting mediation. If the “sisting” pilot in Scotland (aimed at encouraging parties to use mediation before pursuing claims at the employment tribunal) is judged to be successful, this might encourage the adoption of similar pilots in England and Wales.
There may also be more practical constraints on the ability to increase take-up of mediation significantly in the short term. For mediation to be effective, it needs to be available at short notice. In any case it is not always helpful for mediators to be “parachuted in”, since they will generally be unfamiliar with the background to the dispute. Internal mediators can often be brought in more quickly; however their skills may become rusty if they are not required to be used very often.
Employers’ use of mediation
More generally, mediation is likely to be most effective where organisations have in place training and support for line managers in people management skills. Our members’ experience suggests that, where such training has taken place, matters relating to alleged breaches of discipline or complaints by employees have been handled competently and concluded effectively. HR managers can support line management to restore trust-based relationships that have been disturbed by complaints including those related to discrimination, harassment and bullying.�
However our evidence based on a survey of members (Managing conflict at work – Reference 1) suggests that such training is not as common as it might be:
- only 30% of respondents train any employees in mediation skills
- training is more common in the public services (53%) than in other sectors (manufacturing and production 15%)
- 1in 4 employers use internal mediation
- 1 in 5 employers use external mediation (e.g. ACAS).
HR managers need to be proactive in their relationships with line managers, encouraging them to spot problems earlier, and resolve them through a mediation-style approach, including giving managers better communication and feedback skills. Mediation is going to be most effective, and employees are less likely to feel inhibited from taking part, where workplaces are characterised by relationships based on trust rather than conflict. Mediation is not a panacea but one element in a spectrum of practices for preventing and resolving conflict.
“Transactional” mediation and compromise agreements
A distinction can be drawn between “relational” mediation, which aims to produce a meeting of minds between the parties, and “transactional” mediation, which is primarily aimed at agreeing a settlement figure – perhaps with some conditions – which will compensate the employee for losing his or her job. Where a complaint has been resolved internally within an organisation through relational mediation, a compromise agreement may be considered as a means of endorsing the outcome. With the passage of time from an initial conflict emerging, the chances of successful relational mediation diminish but there may still be value in pursuing transactional mediation as a way of “drawing a line” under the relationship.
Where the aim is to agree a compensation figure in return for an employee leaving the organisation, whether or not there is a process of mediation, employers increasingly rely on concluding a compromise agreement with the employee. This is in order to ensure that no further statutory claims can be brought against the employer in respect of the employee’s service with the employer. The Government should recognise the value of compromise agreements in resolving issues in a way that meets the interests of both employer and employee, without the use of statutory machinery, provided that the employee receives independent advice.
CIPD believes that:
- there is a strong business case for mediation, and the Institute will take action as outlined above to encourage and support employers in making more use of mediation and other methods of resolving conflict at an early stage
- mediation is a better and more cost-effective method of resolving workplace issues than dealing with claims through employment tribunals, and produces better outcomes for both employers and employees
- small firms in particular will be dependent on external sources of mediation, and significant investment of public funds through Acas will be needed to support increased uptake. Without such a commitment by the Government, no significant increase in the use of mediation is likely to occur, with the resulting impact on the costs of employment tribunals
- the Government should recognise that many employers use compromise agreements as a means of escaping the straitjacket of statutory enforcement mechanisms and should focus effort on ensuring that employees who sign such agreements do so on the basis of qualified and independent advice.
Interest by employers in mediation is part and parcel of good people management. Its successful use relies on line managers’ ability to identify emerging problems and take effective steps to deal with them. Mediation does not offer a quick fix to stem the flow of applications to employment tribunals. Promoting the wider use of mediation is a long-term process that can most effectively be undertaken in the context of a wider strategy for improving people management practice generally.