Mediation is a valuable tool for resolving employment disputes without resorting to costly and time-consuming litigation. It provides both employers and employees an opportunity to discuss their concerns in a neutral environment and attempt to reach a mutually acceptable resolution.
Understanding the purpose of employment mediation and how it works can help both parties manage disputes more effectively and avoid legal proceedings.
What is Mediation?
Mediation is a confidential process in which a neutral third party (the mediator) facilitates communication and negotiation to resolve a dispute.
Mediation is held on a “without prejudice” basis, meaning that any matters discussed during mediation cannot be used as evidence in subsequent legal proceedings.This provides for free and frank discussions, in the hopes of resolving a dispute.
Employment mediation can differ from standard mediation in structure and facilitation. In New Zealand, employment mediation is offered as a free service by the Ministry of Business, Innovation and Employment (MBIE) and can be held in person, over videoconference (such as Zoom and Microsoft Teams) or teleconference. Generally, MBIE will set aside three hours for a mediation, however for ongoing employment relationships or more complex matters, an entire day may be set aside.
Whilst attendance at mediation is voluntary, the Employment Relations Authority (Authority) is required to direct parties to attend mediation before progressing through the Authority process. Therefore, parties should attempt to agree to voluntarily attend mediation before filing proceedings in the Authority.
When is Mediation Appropriate?

Mediation can address a wide range of employment disputes, including:
- Personal grievances (e.g., unjustified dismissal or disadvantage).
- Disputes over terms of employment, such as the interpretation of a specific term.
- Employment relationship problems, including performance management issues.
- Issues related to ongoing processes, such as restructuring, or disciplinary investigations.
- Clarifying a worker’s status as an employee or independent contractor.
The Mediation Process
Mediation processes can differ depending on the matter at hand, but the usual process is as follows:
- Initial Meeting: The mediator meets with both parties separately to explain the process for the mediation. The parties are then brought together for introductions, if necessary.
- Opening Statements: Each party presents their position on the dispute. While agreement is unlikely at this stage, understanding the points of disagreement is important to reaching agreement.
- Initial Questioning: Parties may seek further information from each other through questioning. Responding to these questions is voluntary but can often be helpful.
- Private Discussions: The mediator meets with each party separately to understand their perspectives. Messages can be conveyed through the mediator if either party does not wish to directly communicate with the other.
- Negotiation: Parties negotiate, either directly or through the mediator, to find a resolution. Solutions may include financial and non-financial elements, such as references and confidentiality.
- Agreement: If an agreement is reached, the mediator can draft a record of settlement for both parties to sign, resolving the dispute.
If a resolution is not reached, it will be up to the applicant to file or continue proceedings in the Authority or attempt to continue negotiations outside of mediation.
Whether to Have Representation at Mediation

Professional and expert representation at mediation should always be considered by a party. Having good representation at mediation will mean:
- You are well prepared with any relevant and pertinent information to put forward or respond with
- Your strongest points are conveyed to the other side, and the weaknesses in their cases are highlighted
- You are properly advised of your risks if the matter does not settle and likely net benefit or loss of resolving your matter or progressing to the Authority. This includes an assessment of the strength of your case, likely remedies the Authority will order (if any) and costs involved to progress to the Authority
- The record of settlement is thoroughly reviewed before you sign it, and it includes all provisions necessary to protect your interests. This is important as once a record of settlement is signed, it is final, binding and enforceable against the other party and can attract penalties of up to $10,000 for an individual and $20,000 in the case of a company or other corporation for any breaches.
By utilising mediation effectively, both employers and employees can resolve disputes in a constructive manner, preserving relationships and avoiding the financial and emotional toll of litigation.