The Mediation Act 2017

The Mediation Bill which has been around since 2012 was signed into law on the 2 October this year as the Mediation Act 2017 and is expected to be commenced shortly. While the Act expressly excludes from its ambit disputes being investigated or mediated by the Workplace Relations Commission, it puts mediation at the centre of almost every other dispute resolution process.

In this month’s article, Jacqui Kelly, Senior Associate in the Employment Department at A&L Goodbody and a CEDR accredited mediator, and Ciarán Ahern, Associate with A&L Goodbody's Employment Law Group offer comprehensive advice on the new Mediation Act and answer a number of key queries about the enforceability of mediated agreements and other compromise agreements, including:

• Why are people talking about mediation?
• What is the purpose of the legislation?
• What does it mean for employment lawyers?
• Should employers consider putting mediation clauses into the employment contract?
• Can a party refuse to mediate?
• When will all of this take effect?
• Will mediators be regulated?
• What about mediated agreements with employees?
• What are the other options for settlement of employment disputes?
• Are compromise agreements enforceable? 

Why are people talking about mediation?

The Mediation Bill which has been around since 2012 was signed into law on the 2 October this year as the Mediation Act 2017 (the Act) and is expected to be commenced shortly.

What is the purpose of the legislation?

The purpose of the Act is to actively promote mediation as an alternative to court proceedings. 

How does it do this?

It requires lawyers to advise their clients to consider mediation as an alternative to litigation. Under the Act a solicitor must advise their client to consider mediation before issuing proceedings. In addition, a solicitor must provide information in respect of mediation services and advise of the benefits and advantages of mediation including the confidential nature of the process and the legal effect of any resulting settlement agreement. As if to copper fasten things, at the time of issuing formal court proceedings a solicitor will be required to make a statutory declaration confirming that s/he has complied with these obligations.

What does this mean for employment lawyers?

While the Act expressly excludes the Workplace Relations Commission (WRC) from its ambit, presumably because the WRC already provides for mediation, it will apply to all other employment claims such as bullying/stress claims. This means that, before commencing non-WRC claims, employment practitioners not only need to be aware of the provisions of the Act but also have details to hand, such as the names and addresses of mediation services and a working understanding of the process.

Should employers consider putting mediation clauses into the employment contract?

Yes, because section 19 of the Act allows a party, any time after an appearance has been entered and before delivering any pleadings to ask the court to adjourn the proceedings to allow for mediation where a pre-existing mediation agreement is in place.  Therefore including a mediation clause in an employment contract could be very useful in situations where an employee commences High Court proceedings and in particular in circumstances where they are seeking an injunction.

Can a party refuse to mediate?

Yes and no. The nature of mediation is that it is a voluntary process but section 21 of the Act allows the court to have regard to the unreasonable failure of a party to refuse to consider or attend mediation when awarding costs.

Will mediators be regulated?

Yes.  The Act provides for a code of practice which will set out standards for the conduct of mediators, including professional development training requirements.  It will provide guidance on ethical standards; the confidentiality of the mediation; the fees and costs of a mediation and other matters relevant to a mediation.  In addition, a mediator will be required, prior to the commencement of a mediation, to furnish the parties with their qualifications and experience.

When will all of this take effect?

The Act will come into effect once the Minister signs the necessary commencement order which is expected to happen shortly.

What about mediated agreements with employees?

As we mentioned above, the Act does not apply to WRC disputes. The WRC already provides a separate mediation service for disputes between employees and employers which, in keeping with the overall spirit of mediation, is voluntary. The WRC can choose particular disputes that it may think are more suited to mediation and suggest to the parties that they enter mediation. It's not entirely clear what the criteria are for selecting particular cases, but if mediation is to proceed at all the employee must initially have indicated on their WRC complaint form that they would be willing to avail of the WRC's mediation service.

In such cases when a complaint is received by the WRC, prior to assigning an Adjudication Officer and arranging a hearing date, the WRC will write to both parties and suggest that mediation may be an option. The letter will be followed up with a phone call from the WRC and parties may themselves contact the WRC to express their interest.

If the parties agree to enter mediation, it may take the form of telephone diplomacy led by a WRC Mediation Officer, or face-to-face meetings or other means may be used as appropriate. Given the voluntary nature of the process either party may terminate the mediation at any time and for any reason. The WRC would then proceed to assign an Adjudication Officer in the ordinary course. Attempting mediation will not prejudice any potential future hearing of the matter and any documents circulated or conversations held at mediation are private and will not be provided to an Adjudication Officer who may later be assigned to the case.

In the event that a mediated settlement is reached the WRC Mediator will prepare a Mediation Agreement outlining the terms of settlement, which will be binding on both sides and actionable in any court of competent jurisdiction.

What are the other options for settlement of employment disputes?

Mediation is not the last opportunity to settle a dispute and all too often settlement negotiations between solicitors happen on the steps of the court, or in the canteen at the WRC as the case may be. Of course, generally the earlier a settlement occurs the better, from a costs point of view, and the WRC mediation attempts to facilitate early resolution before time and money is spent preparing submissions and/or engaging counsel.

However, for various reasons, settlements still frequently occur on the day of a hearing and in cases where the employer may be making a payment (however small) to an employee, we would always recommend that a compromise waiver agreement be signed by both parties.

Are compromise agreements enforceable?

The short answer here is yes, with a but. Compromise Agreements are used frequently, but depending on the conduct of the parties they may or may not actually be enforceable.

There have been some relatively recent cases^[1] on the enforceability or otherwise of Compromise Agreements, all of which uphold the general principle that the employee waiving his/her rights must do so with their informed consent. It's not necessarily enough to advise employees that they can take legal advice should they wish to do so and to note this in the Compromise Agreement.

This means that employers should attempt to ensure that employees receive independent advice from a solicitor or Trade Union official regarding their rights and entitlements prior to signing anything. In an effort to ensure such legal advice is taken employers in these situations frequently provide a contribution towards the cost of any related legal fees. Arguably this can be a small price to pay for peace of mind that the compromise agreement will be enforceable if required.