Human behaviour is the biggest barrier

Most disputes can be settled through mediation

Mediation has become an integral part of the litigation process in labour and employment law disputes. Whether the dispute involves an alleged human-rights violation, wrongful dismissal or a grievance under a collective agreement, more and more mediation, and not litigation, is the way such disputes are ultimately resolved.

There are a number of factors that seem to have little or no effect on determining whether or not a specific mediation will succeed or fail. The amount of money in dispute seems to have little or no effect on the likelihood of a successful mediation. Cases involving large amounts of money are neither easier nor harder to settle than cases involving smaller amounts of money.

The degree to which there are differences in the facts is usually a small factor in determining whether or not mediation will succeed. Dealing with disputed facts in a mediation simply becomes another risk factor to be taken into account in assessing whether or not it makes more sense to settle the matter than proceed to court or arbitration.

Even if there is a disagreement over the facts, a discussion about how each party would prove those facts in court or arbitration often leads to some rude awakenings. For instance, if an employee was terminated because he was apparently rude to customers, and the only admissible evidence would have to come from the customers themselves, few businesses would want to involve clients in a lawsuit.

The degree to which there are disputes on legal issues is generally not a significant barrier to settlement. Again, after thoroughly analyzing the legal risks, competent and reasonable parties simply factor into the settlement equation the risk of winning or losing on the legal issue.

What is the biggest barrier to settlement? The human behaviour of the participants to the dispute.

Employer and employee behaviour

One can start with the premise that all of the participants in an employment or labour mediation are human beings, with the usual baggage of wants and fears everyone possesses to various degrees. Everyone views his role in a certain way and conducts himself with a view to how he believes others view him.

A dismissed employee is obviously going to be upset about losing his job, but why do some take it in stride and others seem to fall apart? To a person who views his primary identity as coming from his work, loss of the job will be much more than a loss of income. To a person who is unable to accept criticism, the issuance of a letter of reprimand will be seen as an act of constructive dismissal. For people like this it is extremely difficult for them to accept that their pain and anguish is trying to be “bought off” with an offer of reasonable notice.

On the company side, one must always remember that unless the decision maker is paying the settlement out of his own pocket, then the real issue will usually be, “How does this settlement affect my own job?” If settling the case will jeopardize the career path of company officials more than going to trial and losing, then it will be extremely difficult to convince the vice-president of HR or the chief financial officer that accepting the settlement is best decision he can make.

The employee’s role

The employee is often the person who has the least direct contact with all the other participants in the mediation itself. Sometimes this lack of participation is due to an over-controlling lawyer, but more often than not it is the client’s choice to not actively participate.

As a key participant in the mediation process, the relationship the employee establishes with the other parties is very important. Some key issues include:

•Honesty in expressing feelings may well be a virtue, but choosing when to express that opinion requires tactical and strategic planning. For example, telling the vice-president of HR that being required to clean out a desk in front of co-workers was an utterly humiliating experience is a good way of letting everyone in the room assess how sympathetic the story will appear in court. On the other hand, telling a former boss that she’s not respected as a supervisor or as a human being is not likely to encourage her to open the corporate checkbook.

•Nobody likes an exaggerator or someone who accepts no responsibility at all for any faults. Therefore the employee who proclaims he is in no way responsible for any of the bad things that happened at the company, but claims credit for all the success, quickly loses the usual sympathy that flows to a dismissed employee.

•The key issue for the employee to keep in mind is that the emotional pain of the termination will not be wiped out by going to court or in a settlement. The employee may still be unemployed after the resolution of the case or their retirement plans may well have been permanently altered by the dismissal. However by settling the case the employee can at least start rebuilding. The ability to move on usually provides the push at the end of the mediation to close the deal

The employer’s role

•The single most important thing the employer can do is to bring the real decision makers to the mediation. This is rarely an HR person. Having authority to reach a deal means the deal can be approved immediately if the employer thinks it is acceptable. It does not mean that participants have simply spoken to the decision maker before the mediation to get an upper limit. Lack of authority at the table leads to more failed mediations than any other single factor.

•The employer representative who attends the mediation is going to be the focal point of the employee’s anger. Responding in kind is counter-productive, especially in the joint session. Trying to justify or rationalize inexcusable employer behaviour is also counter-productive. It’s better to apologize to the employee where something was handled poorly.

•Recognizing that the company has legal exposure because of a poorly drafted employment contract or an illegal overtime policy should lead the employer to change those practices to avoid future liability, as opposed to worrying about the floodgate effect of settling one case. If the case isn’t settled, there will be a public judicial finding of the company’s poor practice, instead of a confidential settlement in which the employer admits to no liability. The “floodgate” argument or “it is a matter of principle” arguments are often used by people who are simply afraid to make difficult decisions.

A powerful tool

Mediation has been proven to be a powerful and effective tool in resolving employment and labour disputes. The likelihood of a successful mediation is primarily dependent on the behaviour of the participants and only secondarily related to the actual dispute in question. Reasonable people can solve very complex problems together, whereas unreasonable people cannot solve the simplest problems.

Tips for employers

•Breaking up is hard to do. Employment cases often involve the termination of long-standing and intense relationships. It always involves emotions, usually on both sides of the table.

•Closure and a clean break are often what both sides need and want. Therefore settlements that involve a high degree of future involvement (salary continuance, consulting contracts) often do not satisfy this mutual interest. Most employers will pay a little more and most employees will take a little less to ensure that neither ever has to deal with the other again.

•Keep your eye on the prize. Focus on getting a settlement that is as good as or better than the alternative.

•The last five per cent of most negotiations is pure ego. No lawyer can predict with that degree of precision what a court outcome might be. No one will remember six months from now who “caved in” at the end, but they sure will remember who couldn't close the deal that led to the trial.

•Principled negotiations usually work better than simple positional bargaining. Settling a legal dispute is not like buying a fridge. In a pure market economy there is no final judge of the price other than what a seller and buyer can agree upon. In a legal dispute, the parties are negotiating within the framework that if they do not agree on a settlement, a judge or jury will decide the issue.

•Having extolled the virtues of principled negotiations, also recognize that at the end, if the parties are close enough, most cases settle by “splitting the baby in half.”

This in-depth look at mediation was provided by Barry Fisher, a barrister, mediator and arbitrator practising in Toronto. He can be reached at (416) 585-2330 or [email protected].

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