Dispute mediation – the wisdom of Solomon?

Recent changes in federal employment legislation have cast a spotlight on dispute resolution in the workplace. Teresa Russell examines the impact of alternative dispute resolution at work and HR’s responsibilities around conflict

According to US research, managers spend 20 per cent of their time dealing with interpersonal conflicts. UK research has found that each conflict takes up 11 days of a manager’s time. Regardless of whether you are paying staff in dollars or pounds, there is no doubt that workplace conflict can cost organisations considerable sums of money. There is also no doubt that the sooner a conflict is resolved, the better it is for the parties involved and the entire organisation.

Glossary of terms

Penny Webster, an accredited workplace mediator and a member of the Institute of Arbitrators and Mediators Australia (IAMA), says that before entering into any discussion of dispute resolution, it is important to understand some terminology. Webster has offered a glossary of terms (see box).

Common areas of conflict

“Conflicts occur in every area of life,” says Tania Sourdin, professor of law and dispute resolution at La Trobe University. “Larger organisations often don’t manage conflict well. It is easier in smaller organisations to have direct conversations and to manage those conversations better, whereas ‘cheer squads’often form in larger organisations, extending the problem,” she says. Sourdin also believes that email exacerbates conflicts when it is used by staff to defend, justify, criticise and attack.

Webster, who specialises in alternative dispute resolution (ADR) in the service industry, says that most of the disputes she sees are around the relationship between a supervisor and an employee and difficulties with directions and work performance. “Supervisors often think it is their role to control people, rather than to support them to do their work,” she says.

Tim Sullivan, national president of IAMA, works mainly in commercial disputes in partnerships and construction matters. He sees many disputes around demarcation, discrimination, unequal pay and conditions and harassment. “People are now encouraged to bring disputes to the fore, rather than putting up with a situation or leaving. Legislation now allows them to do something about it,” he says. Sullivan also gets involved with workplace agreements that are negotiated to help parties agree on what constitutes productivity gains or when employees want a different company structure.

Adrian Morris, a partner at law firm Blake Dawson Waldron’s industrial relations and employment national practice division, has been working in the area of industrial disputation since 1974. “The Government has pushed terms of employment away from the industry level and down to the enterprise level, so disputes are now seen at an enterprise level,” he says. Morris says the disputes he now sees are about the terms of enterprise agreements and the conflict that arises due to the implementation of organisational change, such as downsizing, restructuring and mergers.

Measuring the cost of conflict

Attempts have been made to measure the costs of conflict, as well as the cost-benefit of using alternative dispute resolution. US research found that assistant US attorneys reported average savings of US$9,837 ($13,316) in litigation costs, 77 hours in case preparation and up to six months in litigation time, when ADR was implemented.

Webster says that the longer a conflict drags on and the wider the circle of people involved, the greater the cost. “A quarter of participants in a conflict will leave within 12 months, as will 20 per cent of the witnesses,” she says.

Tom Altobelli, associate professor of the School of Law at the University of Western Sydney, lists eight factors that need to be accounted for when costing conflict. These include wasted time, reduced decision quality, loss of skilled employees, restructured work flows to separate disputants, deliberate damage, lower motivation, lost work time and impaired health.

Resolving conflict

Conflict is not always unhelpful in itself. It depends on how it is resolved. “Conflict is a mark of a changing and evolving organisation. If conflict is handled respectfully and quickly with either a positive or neutral outcome, there will be more trust in the organisation than if there had been no conflict in the first place,” Webster says.

Of course, some conflicts are easier to resolve than others. Webster says that when each party is able to reach an understanding of the other party’s interests and concerns, they can then change their working relationship and move forward. “If one party is intractable, it becomes difficult. People who adopt this position are generally insecure about either their position in the organisation, their level of workplace competency or their lack of interpersonal skills. These need to be referred on to active management, counselling or arbitration,” Webster says.

Sourdin believes that the more difficult conflicts to resolve often involve an underlying clash of values and require a more structured resolution. In this instance, parties need to work out a plan for how they will communicate for the next three, six and 12 months, as well as agree what they are going to do when they next clash. “Many conflicts can go on for decades in areas where neither party can easily leave the workplace, such as small country towns, partnership disputes, family farms, tenured education at universities and in schools where there is a deep commitment to the students,” she says.

Prevention is better than a cure

There are many strategies that organisations can put in place to prevent conflict from occurring and when it occurs, to prevent it from escalating. Morris says that organisations need to develop a culture that stresses corporate values in relation to the fair treatment of its employees. “It is important also to stress ‘interests’rather than ‘rights’ because intractable disputes usually contain at least one party that becomes fixated on not giving up their rights in any way,” he says.

Webster says that being respectful with staff and each other, using humility, kindness and good manners are all interpersonal skills that should be used to prevent conflict. “People have a desire to be heard and to work positively in their role. You should also acknowledge that they have a life with other stresses outside work that impact on them,” she adds.

New legislation and HR’s responsibilities

Sullivan says that HR professionals need to get up to speed with the new Workplace Relations Act and regulations that impact their workplace by reading Section 3, before and after amendments. “The best thing about the Act is that it points people to a dispute resolution process. It encourages case appraisal and neutral evaluation,” he says. Sullivan cautions HR to take particular notice of the prohibited content of AWAs and to ensure that they understand the whole ADR process.

“The most important thing is to decide what provisions you are going to include in AWAs for the resolution of disputes. If you don’t use efficient and competent dispute resolution providers, conflict can be worse if mediation fails,” says Sullivan.

“HR is becoming a consumer in mediation, so it is important they understand what the different ADR processes are, both the facilitative and advisory ones,”advises Sourdin.

The future

Morris believes that in the coming years, we will see a new willingness to try a variety of forms of ADR. “The Australian Industrial Relations Commission (AIRC) and state IRCs have a strong brand, high credibility and legitimacy and are free of charge,” he says. “Many of the commissioners are very positive about their potentially expanded roles in ADR.”

Glossary of terms

A dispute is just a disagreement about the interpretation of a fact.

An industrial dispute in Australia usually refers to some sort of strike action.

A conflict is a type of dispute that includes negative feelings and has the capacity to stop each party from attaining their goals.

Alternative Dispute Resolution (ADR) is a continuous process that always includes a neutral third party.

Mediation is a type of ADR that uses a dispute resolution practitioner to facilitate a shared understanding of a conflict, encourage options and reach agreement between the parties.

Conciliation has all the characteristics of mediation, but the conciliator also provides an opinion, advice or information about options and consequences.

During arbitration, information is requested from both parties and a binding decision is made based on that information.

Top ten mediation precautions

1. Have a designated HR professional in your organisation who knows about mediation and when it is appropriate.

2. Ensure an assigned qualified mediator is perceived as neutral and may not be used for possible later disciplinary procedures between the parties.

3. Ensure the venue for the mediation is perceived by parties as neutral.

4. Ensure the mediator guides the process without suggesting or advising.

5. If advice is required encourage the parties to seek it or briefly bring in an impartial expert.

6. Ensure parties to a mediation know the process is voluntary.

7. Managers and parties should know that a substantial amount of time is required to successfully achieve informed negotiated outcomes.

8. The confidentiality of the process should be known and adhered to with few exceptions.

9. Cross check with stakeholders before signing off on the negotiated arrangements - managers of the disputing parties often need to decide whether the negotiated arrangements are operationally feasible.

10. Ensure all stakeholders know that the final signed agreement is a legally binding document as far as the law allows.

Source: Steve Gibbeson, training manager for the Australian Commercial Disputes Centre ACDC