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November 2007: Using Mediation in Redundancy Situations

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Using Mediation in Redundancy Situations

With the spectre of redundancy hanging over the banking sector as a result of the sub-prime crisis and other sectors like engineering complaining about the failures in other forms of dispute resolution maybe now is an opportunity for lawyers and human resource professionals to consider the use of mediation in redundancy scenarios.

A redundancy scenario involves difficult choices for organisations. The fact that a redundancy is happening means that the organisation may be struggling or the market is just difficult. For larger organisations trade unions can get involved and for all firms it can be a lengthy process with employers and employees under pressure. In many cases a company needs it’s senior managers to stay around and control the redundancy process – but the same senior manager might want to leave sooner than is healthy for the business.

In our experience, lawyers are generally called in for advice straight-away to make sure the company stays on the right side of the law – but in a situation like this it’s just as important to consider staff morale. Sometimes redundancy can be a protracted process over many months and you need to keep staff motivated and performing.

For HR managers and in-house council mediation is an appealing option to consider in a redundancy scenario.

Maintaining the Relationship – If used early in a redundancy situation theoretically at least the relationship between employer and employee is not fractured so this would give a mediator an opportunity to propose options which can involve some form of continuing relationship between the parties. This can involve re-deployment of the individual within the firm in another department, providing consultancy or just simply looking to negotiate the terms of any agreement. If you use mediation later the relationship may be too fractured to repair as time has moved on, but mediation may still be a better option to try than allowing any disputes to escalate and reach tribunal stage.

Controlling Legal Costs– An advantage of using mediation within a redundancy scenario is that any potential dispute is at an early stage and one can settle prior to legal costs having built up. This saves money for the client.

Getting A Resolution – Mediation has a strong settlement rate (80%). If you can use a method of resolving dispute which has a 4 in 5 chance of settling think of the cost and time savings. Statically mediation works and can save the stress of any legal action.

Of course there are situations where you should not use mediation in a redundancy environment. If it is not clear that there is a genuine redundancy dispute or the issues are not defined. Whilst there are advantages in using mediation at an early stage, it is important that all the parties know precisely what the dispute is about and have a clear understanding of the issues. If you mediate too early the parties may not precisely appreciate what the dispute is about resulting in the parties not having a full understanding of the legal issues.

“My vision is of a greatly increased role for mediation… Encouraged by signs of success in the context of employment disputes elsewhere in the world, I commend increased use of mediation to employers, employees and practitioners in Great Britain.”
Michael Gibbons, author of A Review of Dispute Resolution in Great Britain

To find out more about using mediation to resolve workplace disputes contact Justin Patten of Human Law Mediation.

Curve   Curve

Less Fighting Talk
Conflict is part of British business life. It can stimulate innovation and healthy competition, but it can also destroy individuals and companies if it develops into open hostility.
But calling in the lawyers at the first sign of a problem is becoming a thing of the past, as directors, in growing numbers, embrace the concept of mediation. Read more in Less Fighting Talk published in Director (Magazine of the Institute of Directors November 2007).

The End of Lawyers
Technology and standardisation will make lawyers increasingly less important, so argues Richard Susskind in his new book, The End of Lawyers. Without a firm grasp of mediation it’s the Human Law view that he could be right!

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