What Employment Mediation Is Designed to Do

Employment mediation is a structured, voluntary and confidential process used to resolve disputes between employers and employees where the primary focus is on settling the dispute itself rather than on repairing the working relationship. It is typically used where the employment relationship has broken down beyond repair, where legal proceedings are threatened or underway, or where both parties have effectively accepted that the employment is likely to end and the question is on what terms.

Employment mediation is distinct from workplace mediation, which is used to repair an ongoing employment relationship. If you are not certain which type of mediation applies to your situation, Chapter 3 provides a detailed framework for making that assessment.

The outcome of successful employment mediation is usually a settlement agreement, which is a legally binding document that resolves the dispute and typically brings to an end any actual or threatened tribunal or court proceedings. Employment mediation often takes place in the shadow of litigation, and the parties’ legal rights and positions will usually be more visible in the room than they would be in a workplace mediation.

When Employment Mediation Is Used

Employment mediation is appropriate in a range of circumstances, including the following.

• Where an employee has resigned or is contemplating resignation and there are live questions about constructive dismissal, exit terms or references.
• Where a formal grievance has been raised and the parties are approaching or at a stage where formal proceedings become likely.
• Where an employment tribunal claim has been lodged and both parties want to explore settlement before a hearing takes place.
• Where ACAS early conciliation has not resulted in a settlement and the parties want to try a more intensive mediation process before the claim proceeds.
• Where a disciplinary process has concluded and the employee is considering an unfair dismissal or discrimination claim.
• Where a redundancy process has generated claims or potential claims relating to the selection criteria used or the adequacy of consultation.
• Where allegations of discrimination, harassment or whistleblowing retaliation have been made and both parties want to resolve the matter without tribunal proceedings.

The Legal Framework Around Employment Mediation

Employment mediation in England and Wales typically takes place on a without prejudice basis, which means that anything said during the mediation and any offers made cannot generally be used as evidence in subsequent tribunal or court proceedings. This protection is fundamental to the process because it allows both parties to speak openly about their positions and to explore settlement options without the risk that their words will be used against them if the mediation fails.

Section 111A of the Employment Rights Act 1996 provides an additional layer of protection for pre-termination negotiations. Where an employer makes an offer to an employee to end their employment on agreed terms, and that offer is made in the context of a without prejudice or protected conversation, it cannot generally be referred to in any subsequent unfair dismissal proceedings. This provision is specifically designed to encourage employers and employees to have frank conversations about exit terms without fear of legal consequences. The legal framework around confidentiality and without prejudice protection is covered in detail in Chapter 12.

Settlement Agreements

The outcome of a successful employment mediation is almost always a settlement agreement. A settlement agreement, previously known as a compromise agreement, is a legally binding contract between an employer and an employee in which the employee agrees to waive their right to bring specific employment claims in exchange for agreed terms.

For a settlement agreement to be legally binding, certain requirements must be met. These include that the agreement must be in writing, must relate to a specific complaint or proceedings, must be signed by the employee and must be signed by the employee’s independent legal adviser, confirming that the adviser has explained the terms and their effect to the employee before they signed. Without independent legal advice, a settlement agreement is not enforceable.

The terms of a settlement agreement will vary significantly depending on the circumstances of the particular dispute. They typically include some or all of the following.

• A financial payment, often comprising a termination payment, notice pay, pay in lieu of accrued holiday and potentially a contribution to the employee’s legal costs.
• The tax treatment of the various elements of the payment, which can be complex and requires specialist advice.
• The terms on which the employment will end, including the termination date and the basis on which it will be characterised, for example as a resignation by mutual agreement rather than a dismissal.
• A reference, either an agreed form of words or a commitment to provide a reference on request.
• Confidentiality provisions, preventing either party from disclosing the fact or terms of the agreement to third parties.
• Non-derogatory clauses, preventing either party from making negative comments about the other.
• The waiver of specific employment claims, including unfair dismissal, discrimination and breach of contract claims as relevant to the particular case.

The Role of Legal Advisers in Employment Mediation

Unlike workplace mediation, employment mediation frequently involves legal advisers on one or both sides. The presence of legal advisers changes the dynamics of the process in some respects. It means the parties are better informed about their legal rights and the risks of their respective positions. It also means there are more people in the room whose interests and communication styles need to be managed effectively.

A skilled employment mediator will work effectively with legal advisers on both sides, using them as a resource for reality-testing and for helping their clients understand the risks of not settling, while ensuring that the legal advisers support rather than obstruct the mediation process.

Where you do not have a legal adviser at the mediation, you should ensure that you have taken legal advice before the mediation about the strength of your legal position, your realistic prospects of success at tribunal and the range of outcomes that might be achieved through settlement. Going into an employment mediation without that foundation puts you at a significant disadvantage.

Preparing for Employment Mediation

Preparation for employment mediation is covered in detail in Chapter 7. In summary, the most important aspects of preparation for employment mediation are knowing your legal position and its strengths and weaknesses, understanding your alternatives if no agreement is reached, having a clear sense of the range of outcomes you would accept, and ensuring that whoever attends on behalf of the employer has genuine authority to agree a settlement on the day.

The 25 tips for winning in employment mediation in Chapter 15b provide a practical checklist of the most important considerations for both employees and employers in the employment mediation context.

Important Disclaimer: This page is provided for general information purposes only and does not constitute legal advice. Nothing on this page should be relied upon in respect of your legal rights or obligations. Before taking or refraining from taking any action in connection with a workplace or employment dispute, you should obtain advice from a qualified solicitor or barrister with relevant expertise. If you would like advice on your specific situation, contact Robin here.