Employment Mediation vs Tribunal: Which Route is Best?

Employment mediation is an increasingly attractive option for resolving workplace disputes, offering businesses and employees a more flexible alternative to formal tribunal proceedings.

Whether you’re navigating a conflict between colleagues, addressing claims of unfair treatment, or managing a breakdown in communication, mediation can deliver practical solutions that preserve working relationships and protect reputations.

In this article, we explore how employment mediation works, when it’s most effective, and what employers should consider when deciding on the best path to take following a dispute.

What is employment mediation and how does it differ from a formal employment tribunal process?

Mediation is a flexible, voluntary and confidential form of resolution to workplace disputes. Often parties will meet in a neutral space, either with their legal representatives or not, in an attempt to discuss their issues and objectives in order to reach a settlement.

Mediation is facilitated by an independent, impartial mediator who manages the process, structuring negotiations to encourage parties to explore a variety of options.  

Unlike an employment tribunal, mediation is voluntary. Therefore, it cannot go ahead if one or more of the parties refuses to participate. This is a stark comparison to the tribunal process in which parties are required to engage. Mediation is also not binding upon the parties unless an agreement is reached and documented, and as such the process can be terminated at any time if any of the parties are dissatisfied.

How does the role of an independent mediator compare to that of a judge in a tribunal? 

The mediator will control the process, ensuring a fair structure to the mediation is implemented. Mediators will often play the ‘devil’s advocate’ guiding dialogue, but will not pressurise the parties into settling the dispute. 

This is in contrast to a judge in a tribunal, who hears the evidence and applies the relevant legal principles. Fundamentally, a mediator does not advise the parties as to what their rights are.

When is workplace mediation most effective? 

Mediation would be the ideal route where the parties have continued to maintain a working relationship as it encourages parties to resolve their differences by finding a common solution as opposed to apportioning blame. 

It can also be more effective where the applicant wishes to receive a non-financial resolution, whether that be a formal letter or an apology, as tribunals do not have the ability to order such a remedy.   

How do the costs of pursuing employment mediation compare with taking a dispute to tribunal?

Ordinarily, mediation is a much quicker process and therefore less time and therefore money needs to be spent on dealing with the dispute. Parties usually agree to share the costs of the mediator’s fees and reasonable expenses such as travel. Typically, parties will agree to bear their own legal costs in relation to the mediation, although this decision is ultimately down to those involved.

What is the typical timescale for mediation versus a tribunal claim? 

Whilst the optimum timeframe for a tribunal claim is between six to twelve months, it can take over a year to complete the process. The length of an employment tribunal and how quickly the matter progresses is entirely dependent upon the facts of the case.  

Mediation however, can be set up quickly. It can be arranged within a matter of days if necessary. Generally, mediations can be completed within one day.

How might the disruption to business operations differ between the two routes? 

Employment tribunals can cause significant disruption to business operations, whether that be because of the financial loss from legal fees or the time and resources required to manage the process.

As tribunal proceedings are a matter of public record, businesses can also suffer from reputational damage and/or negative publicity. This can potentially affect the hiring of new staff ultimately inhibiting the growth of the business.  

Whilst mediation can also withdraw resources from the wider business, and of course legal fees may still be incurred, the process as a whole can be less disruptive than a tribunal given its confidential nature. 

Why can employment mediation be a more constructive approach to preserving ongoing working relationships? 

The tribunal process can create or increase feelings of hostility between the parties as the nature of proceedings is essentially to apportion blame. As there is always a ‘winner’ and a ‘loser’ of the tribunal, stress and levels of tension can be extremely high.

Engaging with the tribunal process should be considered as a last resort for parties who want to preserve their working relationship. As mediation promotes discussion, parties can work together to find solutions that everyone is satisfied with. It allows parties to focus on their future needs whilst maintaining clear lines of communication.  

What impact can mediation or tribunal outcomes have on wider workforce morale? 

Reaching a settlement in a mediation can send a positive message to the workforce. It can increase employee morale, as they may feel valued that their issues have been heard and resolved appropriately. As channels of communication remain open, mediation can help maintain a healthy work environment for all employees, increasing loyalty, satisfaction and retention rates.  

Alternatively, it may be necessary for employers to take a hardline approach. Tribunal outcomes can send a message to employees that employers follow correct procedures and won’t engage with unmeritorious claims.

What are the potential risks for employers in choosing mediation over tribunal, and vice versa?

Crucially, mediation is only effective when all parties engage with the process. If one party is unwilling to compromise on their position it is likely that mediation will not be successful. This can be contrasted with the tribunal process where parties are required to engage, and the remedy is awarded by the judge.  

Tribunal processes can be long, uncertain and costly to the business. The process is often emotionally heightened and can cause stress amongst the workforce.  

Importantly though, mediation and tribunal proceedings are not mutually exclusive, and many employers often engage in a combination of both processes.  

How legally binding are the outcomes of mediation compared to tribunal judgments? 

The outcome of a mediation and its terms are not in themselves legally binding. Once an agreement is reached between the parties, the terms of the agreement must be set out in a document such as a settlement agreement in order for it to become binding upon the parties. Without such documentation the parties have no obligation to comply with their proposals.  

Tribunal proceeds on the other hand, and specifically the decision passed down by the judge are legally binding.

How can businesses prepare to protect their interests, regardless of which route is taken? 

Businesses should ensure that policies remain relevant and up to date and encourage compliance with such procedures. In addition to this, businesses should remain informed about developments to legislation. Similarly, records should be maintained, ensuring accurate ones are always available.

Adequate training of all employees is also paramount. This shouldn’t just be role specific but should also include wider topics and skills such as diversity and inclusion, leadership and communication.

How do you choose between employment mediation and a tribunal? 

Employers should consider whether they wish for the employee relationship to continue. The tribunal process can frustrate any remaining trust between the parties, as compared to mediation in which the parties hope to find a constructive way forward.  

Control over how the process is managed is an influential factor when deciding between the two routes. Mediation allows employers to maintain control over negotiations and any potential settlements, in contrast with a tribunal where decisions are imposed by a judge.  

It’s important to highlight that mediation should not be used as a way for employers to waive line management discussions.  

How can the nature of the dispute influence which path is more appropriate? 

In certain circumstances where there is, for example, allegations of discrimination or abuse, the case might be better suited to the tribunal process.

Similarly, mediation may not be appropriate where a party is vulnerable or there is an imbalance of power, this would be especially relevant in cases of sexual harassment or assault. 

However, often it’s a case of timing rather than appropriateness. If a client’s position could be strengthened by issuing proceedings, it could potentially be more advantageous to the client to wait before proposing mediation and vice versa. It must be noted that mediation can be entered into at any point during the course of the dispute and can be revisited multiple times throughout proceedings.  

In some instances, parties may have a duty (as per their contract of employment) to engage in mediation before commencing any tribunal proceedings.  

How can seeking early legal advice help a business choose the best route and manage risks effectively? 

Addressing the situation in its early stages can prevent the dispute from escalating. We can provide you with clear advice relating to your rights as an employer and your options going forward. We can also advise you on preventative measures, ensuring internal policies and procedures are both effective and up to date.