Employment Disputes – Negotiation, Mediation or Litigation?

23 Aug 2021

Garvey Hanchard, Employment Partner and Accredited Workplace Mediator at Bloomsbury Square Employment Law, explores the best method of workplace dispute resolution

In May 2021, the Advisory, Conciliation and Arbitration Service (ACAS) published a first of its kind report systematically mapping the incidence of conflict across UK workplaces, titled ‘Estimating the Costs of Workplace Conflict’. It provided some startling statistics about the costs of workplace disputes in the UK, including that:

  • Every year workplace conflict costs UK employers £28.5bn, an average of just over £1,000 for every employee.
  • In one year, close to 10 million people experienced conflict at work, with over 5 million suffering stress, anxiety or depression as a result, and just under 900,000 taking sick leave.
  • Nearly 500,000 resigned and more than 300,000 were dismissed.

These figures represented a snapshot taken before the dramatic upheaval to working lives caused by the coronavirus pandemic. The figures during the pandemic would almost certainly be even higher.

Susan Clews, ACAS Chief Executive, said that as a result of poor conflict management causing stress, anxiety or depression and impacting on workplace productivity, there’s a clear benefit to everyone in handling problems as early as possible.

Many people do not take advantage of free consultations offered by a handful of employment firms of solicitors, and see speaking to a lawyer as an expensive last resort. Consequently, in my daily practice I am often first contacted for advice quite late in a workplace dispute. On many occasions this will be where the employment relationship has already come to an end, either through the employee’s resignation or dismissal, and employment tribunal claims may have already been issued. As there is generally a 3-month time-limit to bring litigation claims in the employment tribunal this can be understandable, albeit as Susan Clews identifies, not ideal from a dispute resolution perspective.

The current problems of employment tribunal litigation

The problems associated with litigation are well documented. While, unlike for many other types of legal disputes, there are no fees for using the employment tribunal system, and the losing party will generally not have to pay the costs of the winner, legal fees can still make litigation expensive. Not to mention that tribunal claims are stressful and time consuming.

Back in March 2020, before the COVID-19 pandemic, there was already a serious backlog of over 35,000 cases within the employment tribunal system waiting for hearings. The pandemic caused an already bad situation to get much worse.

According to the most recent HM Courts and Tribunal Service figures in 2021, the outstanding tribunal caseload is now well over 50,000 cases and rising. And there are only 34 employment tribunal hearing centres in England, Wales and Scotland. The result, according to a recent survey by the Employment Lawyers Association (ELA), is that more than 40% of lawyers are waiting more than a year for their clients’ cases to get to a hearing.

Caspar Glyn QC, chair of the ELA Legislation and Policy Committee, has said that it would seem the pandemic has been the straw that broke the camel’s back and “an already stretched system has been pushed to absolute breaking point. The evidence shows that the failure by the Ministry of Justice to invest resources in, recruit and train staff to the employment tribunals threatens the effectiveness of timely employment justice in Great Britain.”

To many prospective employment tribunal claimants, the time and cost of bringing a claim in the employment tribunal means this is a deeply unattractive option. However, the current long delays within the tribunal system are not necessarily a bad thing for resolving employment disputes.

Companies, which thrive on efficiency and certainty, also do not want to be stuck with a tribunal hearing hanging over their heads for 12-18 months. The result of the current crisis in the tribunal system could be an opportunity to force both employees and employers into considering more effective methods of resolving employment disputes – namely, negotiation or mediation.

What is mediation?

There are two main forms of mediation available to employees – ‘standard’ mediation and judicial mediation.

Standard mediation is a voluntary process where parties to a dispute can resolve their differences in a structured, yet informal, setting, with the guidance of an impartial mediator who does not take sides. The process is confidential, can be arranged very quickly and is typically much cheaper than going to tribunal.

Judicial mediation occurs after an employment tribunal claim has already been issued. It can happen after an employment judge looks at the case and decides it is suitable for mediation. If it is suitable, judicial mediation will be offered as an option, with an employment judge acting as mediator.

Judicial mediation is entirely voluntary and the mediation itself will be similar to a standard mediation. The process is confidential and the judge will not make any ruling – if the parties do not reach a settlement between themselves then the employment tribunal process can continue, without any party being penalised for having failed to reach a settlement agreement.

Mediation as an alternative to litigation

Success rates for both types mediation in employment disputes are very high at around 80-90%.

In addition to the high success rates and lower costs, mediation also has other important benefits compared to litigation:

  • It is solution rather than blame focussed, which can help the parties maintain or mend relationships. This is particularly beneficial where the employment relationship is continuing.
  • The outcome of a mediation is within each party’s control. It is agreed upon. In an employment tribunal the outcome is imposed by a judge and therefore out of a party’s control.
  • It is conducted on a ‘without prejudice’ (not admissible in court) basis which allows the parties to speak freely without fear that their words will be used against them later. No party will suffer from negative publicity or the ignominy of losing.
  • It is risk-free. A mediation will not be ‘lost’ if something goes wrong, compared to in an employment tribunal where even the best prepared case can unravel if, for example, a witness falls apart under questioning.
  • It allows for a wider range of solutions. Employment tribunals are generally limited to awarding compensation, reinstatement or re-engagement. Settlements concluded at mediation can include elements that an employment tribunal has no jurisdiction to order, such as apologies, agreed references and agreed statements.

Resistance to mediation

Given the above compelling reasons to mediate, it is a somewhat strange fact that mediation is rarely used to resolve workplace disputes.

In practice, it is employers rather than employees that are most resistant to attempting mediation. Unfamiliarity undoubtedly plays a part in that. Research has shown that once employers have used mediation and understand how it works and how it can reduce the cost of workplace disputes, they go on to use it again.

Employers are also mindful of the risk that an unsuccessful mediation just adds yet another step to a long dispute process, that may have already involved drawn-out grievance or disciplinary proceedings, with a whole tribunal process to come. Employers can be instinctively wary of employees that try to string out HR and statutory processes in the hope of achieving high ‘nuisance-value’ settlements.

Further, there may be lack of trust at play. Employers are used to their HR departments handling difficult staff issues within structures which they control. It takes a recalibration of thinking to trust an unknown mediator to provide a ‘safe’, genuinely neutral setting to explore a different way of resolving problems.

Employees tend to be more open than employers to mediation. When employees show resistance, it is normally due to emotive factors. Such as scepticism over whether the mediator will truly be independent of HR. Or (if the employee is unrepresented) the fear of participation in an alien process in which they will have to raise and discuss often sensitive, personal matters, without the shield of a representative, can be stressful.

In practice however, a good mediator is very skilled at building rapport with both sides in a dispute and can quickly alleviate any concerns held by any of the parties about their impartiality and the process.

A final barrier to mediation might also be the legal representatives themselves. Anecdotally, it does not seem that many lawyers actively encourage clients to consider mediation as an alternative to litigation. Or if they are providing that encouragement, not very successfully – evidenced by employment tribunal claims far exceeding the relatively low levels of mediations that take place each year.

This is surprising as it would seem to be inescapable, on the figures alone, that the interests of a client might be best served by taking part in a process which is 80-90% effective, rather than a more expensive litigation process which perhaps has a 50-60% chance of succeeding. So surely lawyers should be playing a big role in promoting mediation?

A plausible reason why they may not be is that lawyers are trained in and favour outcomes based on their client’s ‘rights’, rather than informal processes that are less interested in rights but on solutions and the restoration of relationships. The lawyer’s role is naturally diminished where their knowledge of the law and their client’s rights are less important to the outcome.

Lawyers also have less experience with mediation than litigation, because mediation is often entered into at an early stage in a dispute when lawyers may not be involved.

Perhaps, with the current unprecedented delays within the employment tribunal system, mediation could start to play a more prominent role in resolving workplace disputes in the future.


Negotiation as a means of settling an employment dispute will always potentially be the best option for two willing parties with open lines of communication. The benefits of early discussion and negotiation include:

  • Simplicity – it can be informal and does not require legal representation (although many employees do choose to engage an experienced solicitor to act for them and there can be many benefits in doing so).
  • Speed – depending on the willingness and availability of the parties, a negotiation can be concluded in mere minutes or hours.
  • Confidentiality – like a mediation, a negotiation will be held on a without prejudice basis, and a settlement agreement can include non-disclosure provisions.
  • Effectiveness – employees and employers both generally want to avoid employment tribunal proceedings and settle disputes. Most employment disputes do end up settling.
  • Flexibility – also like a mediation, a settlement agreement can include options for apologies, agreed references and agreed statements.

So, Negotiation, Mediation or Litigation?

The answer is very clear. If you are involved in an employment dispute, resolving it at an early stage through discussion/negotiation, can be the cleanest, quickest and best option for most people and businesses.

If early discussions/negotiations fail, then mediation – particularly given the current problems with the employment tribunal system – is a far superior option to litigation.

If you have an employment dispute, Bloomsbury Square Employment Law offers a no-obligation, free consultation with an experienced employment partner to discuss your options.