Mediation in the Workplace

Conflict within the workplace can be emotionally, commercially and economically damaging for organisations.

ACAS (THE Advisory, Conciliation and Arbitration Service) have reported that workplace conflict in the UK costs organisations around £28.5 billion per year. This is the cost to employers, but the cost to the economy as a whole could be much more.

This figure can be broken down as follows:
• Litigation – £770 million
• Procedures – £2.3 million
• Sickness – £2.3 million
• Dismissals – £10 million
• Resignations – £11 million

Aside from the financial impact, factors that contribute to the cost of workplace conflict also include:
• Wasted Time – Employees may spend time managing disputes instead of working
• Increased employee turnover
• Increased grievances, complaints and employment disputes
• Increased employee sickness and absenteeism.
• Violence within the workplace.
• Poor workplace culture and toxic atmosphere.

The issues and harm that can be caused to companies and employees due to disciplinaries and grievances can be impactful and long lasting.

It is rare that an employee who raises a grievance within an organisation will want to remain in that workplace, the relationship and culture will be damaged and broken.

Early Conciliation

ACAS offer a free service which helps employees and employers resolve disputes without going to an employment tribunal.

ACAS will speak with both the employee and the employer separately and can help them to reach an agreement. This will be formalised as a COT3 (Compromise of Tribunal), which is a legally binding to avoid litigation.

ACAS have advised:
• There were 105,000 early conciliation notifications in 2023
• Of those, only 27% progressed to an Employment Tribunal claim and from those 78% were resolved without a hearing.

There has been a steady rise in cases of 10% from 2023 to 2024 and there has been a push from ACAS to resolution over Employment Tribunal.

There is a tendency for companies to work through the policy and procedure, particularly where this is dictated by the law and guidance provided by ACAS. There is a fear from organisations that if they don’t follow the ACAS procedure to the letter then they will not be covered by insurers and that legislation pushes the strict following of procedure.

There is an issue currently that companies are coming too late to early intervention and are not dealing with the issue at a stage that could reduce costly litigation. In addition, where Trade Unions are present, they are struggling to cope with the volume of cases of conflict.

It is common for employers to want to promote employees within the company, but in some cases, managers have little to no formal line management training and do not have the skills or confidence to manage and resolve staffing issues.

Mediation and Workplace Culture

Organisations need to look inwardly at their organisational culture and how this can be changed for positive outcomes to benefit the business and employees.

A positive change in culture can look at:

• Valuing good management
• Workplace policies that are effective and fit for purpose
• Aim to be equipped to resolve conflict and not allow this to escalate.
• Maintain and support positive employee relationships.
• Take a strategic view of culture and positive employment spaces.
• Preserve and support employment relationships.

Mediation in the workplace is a process where a neutral third party, or mediator, will help within an organisation to resolve conflicts between employees or between employees and management.

The aim is to facilitate communications, see all parties’ points of view and reach a mutual agreement to avoid conflict escalation.
It helps people in a disagreement to reach a mutually acceptable solution. The mediator should be trained to help people communicate and explore solutions without taking sides.

How it works

• Initiation – Once the issue or conflict has been identified and can be voluntary or mandatory depending on if the conflict is impacting the wider team or organisation.
• Selection of Mediator – A neutral third party will be chosen, and they should be trained in conflict resolution.
• Opening Statements – The mediator will facilitate a meeting between the parties who are in conflict. They may meet with each party separately to try and understand each person’s perspective. They will then arrange a joint meeting where both parties can share their views.
• Exploration of the Issue – They help the parties understand each other and helps them find a solution. The aim is to move past emotions and look for practical solutions.
• Generating Solutions – The mediator will encourage positive solutions to be discussed and will aim to reach a resolution where all parties are happy.
• Agreement – If there is a mutual understanding, this can be confirmed by written agreement. The role of the mediator is no longer required once when the resolution is reached.

The use of mediation to resolve conflict in the workplace can have a significant and positive impact. It can preserve internal relationships within organisations and can encourage a cooperative culture.

It can also be quicker and less financially costly than a formal disciplinary.

Positive Impact of Mediation

• Improved Communication – It can encourage open and honest dialogue within a safe environment.
• Conflict Resolution – It provides a structured process where both parties can work towards a mutually agreeable solution.
• Reduced Stress – Where conflict is reduced to enable a healthier work environment and support employee wellbeing.
• Enhanced Collaboration – Mediation can strengthen relationships and promote teamwork. This can encourage a more positive workplace culture.
• Cost Effectiveness – Mediation can be quicker and less costly than legal action or internal investigations.
• Prevention of Future Issues – Can help identify issues that may have contributed to workplace tension, can help to prevent similar conflicts occurring.
• Employee Retention – Employees will be happier as they feel more supported so are more likely to stay with the company so reducing staff turnover and keeping down recruitment costs.
• Boosts Productivity – As they are not dealing with conflict, managers and line reports are able to concentrate on their work.

Mediation is a proactive approach to managing workplace relationships and developing a supportive workplace.

Where Mediation won’t be appropriate

Although mediation is a valuable tool, there are some cases and situations where it would not be appropriate:

• Severe Misconduct – If the conflict is serious and the allegations involve cases of sexual harassment or illegal practices mediation may not be the right route to take. Formal investigations and legal action may be more appropriate.
• Imbalance of Power – If the conflict is between an employee and senior manager or director, the senior employee holding more power may exert power and influence over the proceedings
• Inability to Participate Voluntarily – All parties must be willing to engage and participate voluntarily. If one of the parties have been forced into the process, the outcome is unlikely to be positive.
• Ongoing or Escalating Violence or Threats – The process must be safe, so any threats of violence mean that legal action is preferable.
• When One Party is Unwilling to Compromise – Mediation will only work is all parties engage in mutual understanding and compromise. If this is not the case, they will not come to a resolution, and it could be a waste of time.
• Complex Legal or Financial Issues – Where the conflict occurs that requires legal knowledge or guidance, mediation will not be the best route to take.
• Where Previous Attempts to Resolve the Issue Have Failed – If previous attempts have failed, a formal process such as a grievance or investigation may be more appropriate.

Mediation is most effective where both parties are motivated to come to a positive resolution and where the situation does not involve a complex legal framework.

As a company, you should consider if mediation will be a beneficial tool to support your employees, prevent good employees from leaving and boost wellbeing and a positive workplace culture.