The article below was produced for the Lexis Nexis Employment Law Bulletin, Issue 2, March 2006.

There is no one dispute resolution process that would fit all disputes. Certainly in the more entrenched disputes, two or three processes may have to be gone through before a resolution is found. There are a number of options which may be considered, ranging from informal to formal, self controlled to control by outside agencies. The choice of process should be guided by the needs of the parties.

Negotiation is the most common form of dispute resolution, so common that it is often not even considered to be the first step. It happens, mostly, quite naturally. There are no formal rules, although there are culturally acceptable approaches. Negotiation is, simply, talking to persuade or “a process of mutual discussion or bargaining, involving putting forward and debating proposal and counter-proposal, persisting, conceding, persuading, threatening, all with the objective of reaching what will probably be a compromise that the parties are able to accept and live with.”i It should always be the first step in a dispute.

In assisted negotiation, the parties are helped by a third party who coaches or represents them in the negotiations without a formalised structure. Lawyers, accountants, trusted friends or other technical or professional advisors are often called upon to fulfill this role.

It is becoming increasingly common to use facilitation as an early or preventative step when contentious issues are on the horizon. With the help of a facilitator, the parties (usually a group), identify problems to be solved, tasks to be accomplished or disputed issues to be resolved. Facilitation may conclude there, or it may proceed, like mediation, to endeavour to reach agreement. The potential for application of facilitation is enormous, witnessed by a surge in the number of people offering facilitation services.

Mediation has been the primary dispute resolution mechanism in employment since the Employment Relations Act 2000 changed the emphasis in employment relationships from a system which focused on contracts to one that focuses on relationshipsii and prompt resolution by the parties themselves. The mediator, a neutral third person, helps to “systematically isolate disputed issues in order to develop options, consider alternatives and reach a consensual settlement that will accommodate their needs”iii. The Act provides for publicly funded mediation as well as the ability to choose a private mediator. Private mediators can be preferred in cases involving senior managers as companies and managers want to place a distance between the mediation service it uses for rank and file employees and its senior team, and also where parties want a greater choice of mediator.

Conciliation is a term used to refer to a number of different processes. It is similar to mediation, but is usually regulated by statute, with the parties being compelled to attend. The conciliator often has a relatively “interventionist” role with responsibility laid down by a statute or agency, and in which a tribunal will resolve the matter should the conciliation not reach a settlement. The conciliator may act as a conduit transferring offers of settlement between the parties, make suggestions for resolution, give expert advice on likely settlement terms and actively encourage resolution, all within the framework of relevant legislation. Conciliation used to be a feature of employment legislation but has now all but disappeared in the field as mediation takes over.

Independent case appraisal or early neutral evaluation. Often it can be helpful to have an independent expert appointed by the parties to investigate and provide an opinion on the issues in dispute. The opinion may be used as the basis for a solution or simply to clarify the issues. In some cases, the parties agree to be bound by the opinion, which is often submitted to them in draft form before being finalised. The process may then become a type of mediation on the draft opinion putting responsibility for a solution back into the hands of the parties. Expert appraisals can be used in conjunction with mediation or litigation.

Adjudication is increasingly being used in certain industries, particularly the building industry where parties are looking for a quick binding decision in order to move on. Unlike the situations discussed above, an adjudicator has authority to make binding decisions. Arguments and evidence are presented to an adjudicator who is chosen on the basis of a specialist qualification or experience on the subject matter of the dispute who makes a determination by which the parties are bound. The provisions under the Construction Contracts Act 2002 Part 3 are one such example. In the employment field, the Employment Relations Authority provides an adjudicative role.

For nearly 100 years, conciliation and arbitration provided by the state dominated as the method of dispute resolution in employment. Now there are very few, if any, employment arbitrations. Strangely, employment is not covered by the Arbitration Act 1996 but is provided for by s 155 of the Employment Relations Act 2000. This provision is unsatisfactory and confusing, and as a result very few employment arbitrations are now carried out.Arbitration involves the submission of a dispute to an arbitrator who resolves it by making a decision, usually binding, after hearing arguments from the parties. The “award” can be enforced by the courts, in the case of employment matters, by the Employment Court. With variations as to the degree of formality in presentation of evidence (amongst other things) it provides greater flexibility and more party control than the formal court system.

Litigation is often seen as the last step or is come to when other options have been exhausted. The legal framing, analysis and argument, together with the traditional adversarial nature of the process means that the system has little scope for reconciling or accommodating the parties’ interests. It does, however, produce a binding answer and when there is an issue of rights, a question of law or legal interpretation. Litigation may be precisely the process which best suits the parties’ needs.

This is a “horses for courses” array of options, which is entirely appropriate for the nature of employment disputes. The best option will depend on the dispute and the needs of the parties.

 

 

 

 

i Capital Coast Health Ltd v NZ medical Laboratory Workers Union Inc [1996] 1 NZLR 7, Hardie Boys J.

ii Rasmussen, E and Felicity Lamm “An Introduction to Employment Relations in New Zealand” Auckland, Pearson education, 2002.

iii Folberg & Taylor “Mediation – A Comprehensive Guide to Resolving Disputes Without Litigation”, San Fransisco, Jossey-Bass, 1984, p 7.