As the volume of employment claims increases, so too do the inevitable delays in resolving those claims. Waiting times of over 70 weeks are not uncommon in the Employment Appeals Tribunal, with delays in the region of two years in the Equality Tribunal. Now, more than ever, employers should consider Alternative Dispute Resolution (ADR) to resolve employment disputes.
ADR is a non-adversarial process whereby an impartial third party actively assists parties in settling a dispute. ADR includes mediation, conciliation and arbitration.
The advantages of ADR over litigation in employment disputes are listed below.
- Less formal
- Can be less costly
- Encourages consensus
- Wider range of solutions e.g. apology, explanation, continued employment.
ADR - When is it Appropriate?
Despite the advantages of ADR, in many cases it may not be possible to reach consensus and so the following issues should be carefully considered by employers before embarking upon ADR.
- The nature of the dispute
- The merits of the case
- The extent to which other settlement methods have been attempted
- Whether the costs of ADR would be disproportionately high
- Whether any delay in setting up and attending the ADR would be prejudicial
- Whether the ADR has a reasonable prospect of success
The aim of mediation is to establish a "zone of potential agreement" which for both parties is preferable to the risks and consequences of other options. Often it may not become clear whether such consensus is on the cards until the process has been explored, but it is important that the process is not wasted trying to resolve disputes where the positions of both parties are so entrenched that litigation is the only realistic course of action.
Two of the most commonly used methods of ADR are mediation under the Employment Equality Acts 1998-2008 (the Employment Equality Acts) and conciliation under the Industrial Relations Acts, 1969 - 1990 (the Industrial Relations Acts).
Mediation under the Employment Equality Acts
The Employment Equality Acts provide for a voluntary mediation process. While parties may formally object to involvement in mediation, it is often a worthwhile process as it provides a neutral and impartial person to facilitate the parties to explore the issues in dispute and, where possible, to assist them in reaching a mutually acceptable agreement.
The mediation process is on average three times quicker than an investigation by an equality officer and has the advantage of being heard in private with no decision published by the Equality Tribunal. The confidentiality of the process is obviously a key consideration in sensitive cases, such as claims of sexual harassment.
When terms are agreed between the parties they are given a cooling-off period before signing the agreement, at which stage it becomes legally binding. If no agreement is reached then the case can be returned to an equality officer for investigation and neither side can use the information disclosed during the mediation process without the consent of the other party. Therefore, unless there are strategic reasons for not engaging in mediation, the parties would not be prejudiced by at least trying to resolve the dispute in this manner at the outset.
The Industrial Relations Acts, 1969 - 1990 provide for a conciliation service which is a voluntary mediation process. The Labour Relations Commission's (LRC) conciliation service provides a professional external conciliator to assist parties to resolve collective disputes.
The process is described by the LRC as a "facilitated search for agreement between disputing parties" and it does this by using chaired negotiation at joint sessions and separate side sessions to coax the parties towards consensus is a less pressured manner.
Approximately 80% of disputes referred to the conciliation service are resolved, which is a testament to the process. Where there is no agreement the parties may agree to refer the dispute to the Labour Court.
ADR Clauses in Employment Contracts
The Law Reform Commission's 2010 report on "Alternative Dispute Resolution: Mediation and Conciliation" indicated that it may be "beneficial for employers to include a contract clause which provides for a mandatory attendance at an information session on ADR prior to the commencement of a legal claim." The purpose of such a session would be to make the parties aware of their options to engage in ADR to try to resolve their dispute.
Employers are becoming increasingly aware of the value of including mediation and conciliation options in their policies and/or employment contracts. By including mediation options in internal grievance and disciplinary processes, employers can often prevent disputes before they become something that requires dispute resolution.
Although the Arbitration Act 2010 failed to remove the exclusion on employment-related disputes, that does not mean that arbitration cannot be used to resolve employment disputes, merely that court supervision and enforcement is not automatically available. While an employee cannot be forced to go to arbitration even where an employment contract includes an arbitration clause compelling the parties to resolve any dispute in this manner, they may become more of a feature in employment contracts for more senior employees. In disputes which might otherwise be litigated in the High Court, it may well be worth exploring this options in the interests of confidentiality, speed and cost for both parties.