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employment

How mediation works in employment disputes

Key Takeaway

Mediation in New Zealand employment disputes is a confidential process facilitated by an independent mediator from MBIE to help resolve 'employment relationship problems'. Parties engage in good faith to reach a binding settlement agreement. If no agreement is reached, the matter may proceed to the Employment Relations Authority. The process is governed primarily by the Employment Relations Act 2000.

Understanding Mediation in New Zealand Employment Disputes

Mediation is a primary mechanism for resolving 'employment relationship problems' in New Zealand. An 'employment relationship problem' refers to any issue arising from, or relating to, an employment relationship [Source: Employment Relations Act 2000, s 134(1)(b)]. This includes 'personal grievances' – claims by an employee that they have been disadvantaged by an employer's action (e.g., unjustifiable dismissal, discrimination, harassment) [Source: Employment Relations Act 2000, s 103].

The Role of Mediation

The Employment Relations Act 2000 (ERA 2000) encourages the resolution of employment relationship problems at the lowest possible level and in a manner that is speedy, effective, and fair [Source: Employment Relations Act 2000, s 134(1)(a)]. Mediation services are provided by the Ministry of Business, Innovation and Employment (MBIE) through specialist 'mediators', who are independent third parties appointed to help resolve disputes [Source: Employment Relations Act 2000, s 136, s 137].

Initiating Mediation

An employer or employee may apply to the Chief Executive of MBIE for specialist mediation services to help resolve an employment relationship problem [Source: Employment Relations Act 2000, s 136(1)]. The Chief Executive also has the power to require parties to attend a meeting for the purposes of resolving an employment relationship problem [Source: Employment Relations Act 2000, s 140(1)].

Key Principles of Mediation

  1. Good Faith: All parties involved in an employment relationship are obliged to deal with each other in 'good faith' [Source: Employment Relations Act 2000, s 4]. This obligation extends to the mediation process, requiring parties to be active and constructive in their dealings, not to mislead or deceive, and to be responsive and communicative [Source: Employment Relations Act 2000, s 4(1A)].
  2. Confidentiality: Discussions and disclosures made during mediation are generally confidential [Source: Employment Relations Act 2000, s 142(1)]. This means that, unless all parties agree otherwise, the information disclosed in mediation cannot be used as evidence in subsequent proceedings before the 'Employment Relations Authority' or the 'Employment Court' [Source: Employment Relations Act 2000, s 142(2)]. The Employment Relations Authority (ERA) is an investigative body that makes determinations on employment disputes [Source: Employment Relations Act 2000, s 157]. The Employment Court is a specialist court that hears appeals from the ERA and deals with complex employment law matters [Source: Employment Relations Act 2000, s 186].
  3. Without Prejudice: Statements made in mediation are usually 'without prejudice', meaning they cannot be used as an admission against a party in later legal proceedings if the mediation is unsuccessful. This encourages open discussion and settlement attempts.

The Mediation Process

The mediator facilitates discussions between the parties. Their role is to assist the parties to resolve their problem by exploring options and common ground, rather than making decisions for them [Source: Employment Relations Act 2000, s 137(1)]. Parties typically attend with any relevant documentation and may bring a representative, such as a lawyer, advocate, or union official.

Outcomes of Mediation

  1. Mediated Settlement Agreement (MSA): If the parties reach a resolution, they may enter into a 'mediated settlement agreement'. This agreement must be recorded in writing and signed by the parties or their representatives, and by the mediator [Source: Employment Relations Act 2000, s 143(1)]. A signed mediated settlement agreement is final and binding on the parties and is not able to be challenged in the Employment Relations Authority or the Employment Court [Source: Employment Relations Act 2000, s 143(2)].
  2. No Agreement: If the parties cannot reach a full resolution through mediation, the matter may proceed to the Employment Relations Authority for investigation and determination [Source: Employment Relations Act 2000, s 159]. The Authority will then consider the evidence and make a binding decision.

Enforcement of Agreements

If a mediated settlement agreement is reached and a party fails to comply with its terms, the other party may apply to the Employment Relations Authority or the Employment Court for an order to enforce the agreement [Source: Employment Relations Act 2000, s 144].

When to Seek Independent Legal Advice

It is often beneficial for parties involved in an employment dispute to seek independent legal advice to understand their rights, obligations, and the potential outcomes of mediation or other resolution processes. This can involve consulting with a lawyer, an employment advocate, or a union representative. Free legal assistance may be available through organisations such as Community Law Centres.

Key Resources