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Mediation the best course in employment disputes

There can be little worse, in the employment context, than a dispute between an employer and employee.

Formerly on friendly terms, an employer and employee often find themselves at odds about rates of pay, the lack of a pay increase, or a job appraisal during which one party has delivered some bad news.

In the latter case, the dispute will normally arise over a performance issue where the employer gives a warning about future performance and there is the likelihood that the employee will be fired if there is no demonstrable improvement in such performance.

The employee is often disgruntled and would otherwise wish to challenge such a threat to his livelihood but is afraid to make a fuss because he fears losing his job.

So, the employee plans to leave his position and the employer loses a valuable employee who has simply had a blip in performance but who otherwise has been a good employee with a tremendous knowledge of the employer's business and customer base.

The key, for both parties, is to determine how the end of their relationship can be prevented.

Any employer is obliged, when giving a written performance warning, to outline precisely what performance is being complained of. At the same time, the employer must outline what must be done to put the poor performance right e.g. how the employee can demonstrate to the employer that he is performing well.

A prudent employer will put in place regular reviews and assessments of progress in addressing the performance issues. The purpose is two-fold providing feedback and, if there is no demonstrable improvement, bringing the employment relationship to an end.

An employee in this situation should welcome these reviews so that he can assure the employer of a continuing improvement of performance or highlight those areas where he requires help.

Sometimes, one suspects that an employee is being set up to fail because the written warning or the review process is contrived, or so far beyond the scope of what the actual problem is that the inevitable consequence is termination of employment.

The employee can complain formally to the Employment Inspector with a claim for constructive dismissal if he believes that the warning is unjustified and it is therefore unreasonable for him to remain with his employer.

But matters should never reach this stage if there is a fair and proper grievance/ disciplinary procedure within the employer's organisation. Such a policy is crucial unionised employees have the benefit of such provisions in their respective collective bargaining agreements, and non-union employees in all industrial and commercial sectors should have the same provisions.

Any such grievance/disciplinary procedure will usually end with a reference of the dispute to the most senior manager in the organisation. Should this step not resolve the dispute, adding the prospect of mediation into the formal grievance procedure will give the parties the opportunity of reaching a settlement before an independent and impartial facilitator/mediator.

Having a mediation step in the formal grievance procedure can be most helpful as research shows that such a step brings about a settlement in more than 90 percent of cases.

Should mediation fail to resolve the matter, then the employee can make a complaint to the Employment Inspector, who cannot entertain a complaint (other than with the consent of the parties) until a company's grievance/disciplinary procedures have been exhausted.

The Employment Act requires the Employment Inspector to investigate a complaint. The Inspector has an obligation to conciliate between the parties, and also has the power to refer a complaint to a tribunal for resolution of the matter.

Some may take the position that the mediation step in the employer-employee grievance procedure is no different than the Employment Inspector referring a matter to mediation but the important difference is that the mediator appointed under the grievance procedure is often a third party agreed upon by the parties to the dispute.

Taking a matter to mediation during the grievance procedure is a genuine step to resolve a grievance before it escalates to a formal statutory procedure. Putting a complaint before the Employment Inspector can erode the employer-employee relationship, and cause delay and uncertainty in the resolution process.

The Employment Inspector is, perhaps understandably, overworked at present with the tightening economic situation, increased redundancies and more employers being aware of the need to properly record poor performance issues.

Creating a mediation step in a grievance procedure can assist the Inspectorate by restricting the matters before it to those that are unresolved despite the best efforts of the parties concerned.

Attorney E Kelvin Hastings-Smith, FCIArb, is Counsel and Manager of the Litigation Practice Group at Appleby (Bermuda) Limited. A copy of Mr Hastings-Smith's column can be obtained on the Appleby website at

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.

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Published February 20, 2012 at 7:00 am (Updated February 19, 2012 at 10:42 am)

Mediation the best course in employment disputes

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