Mediation in the workplace: calling in a professional gets better results for a more predictable cost

Last year, one of Australia’s largest-ever financial penalties was awarded against an employer after a judge found an employee had been subjected to bullying from the CEO that “effectively destroyed” her life – bullying which was calculated to force the employee out of her position by creating an unbearable work situation.

After it was found that Hawkesbury Race Club Marketing Manager Vivienne Leggett was bullied out of her job by CEO Greg Rudolph, Federal Court Justice Steven Rares awarded a $2.8 million payout to Ms Leggett to compensate for years of breaches of her employment rights, including bullying, humiliation, being denied annual leave, long-service leave and commission payments. The Federal Court heard Mr Rudolph’s conduct caused Ms Leggett to develop a significant depressive disorder with anxiety that left her unemployable for six years. 

After Ms Leggett was forced to quit, an initial $120,000 award, under the Workers Compensation Act, rose to $2.8m when Ms Leggett became entitled to recover work injury damages for the Club’s negligence in failing to protect her from the risk of psychiatric injury, and compensation for its multiple contraventions of the Fair Work Act.  

It’s safe to say that Hawkesbury Racing Club would have saved its reputation and millions of dollars if it had invested in mediation when Ms Leggett first raised her concerns.  

If a mediator isn’t professionally trained, the consequences can be expensive 

When organisations and their HR managers adopt an investigative approach to workplace conflict in an attempt to understand ‘why’ a relationship breakdown has occurred, it’s typical and common for an amateur mediator to attempt mediation by simply having a high level discussion between the parties. While keeping it in-house may save some money, the problem is inevitably these interventions are highly adversarial and place an emphasis on what has occurred in the past. They’re also probably not guided by the objectivity and legal training of a qualified mediator and cause additional problems for business.  

Mediation: cost-effective, cost-saving, and reputation-saving 

Professionally delivered workplace mediation is future focused and aimed at achieving a mutually agreed win-win outcome for all parties. 

But what if I feel my employee doesn’t have legitimate concerns?  How can I be sure mediation is the best option?  

The question of whether mediation is appropriate in cases involving workplace bullying and harassment requires careful consideration of factors including the length of time and recency of the inappropriate behaviours or conduct; the seriousness of the alleged behaviour, escalation, negative consequences experienced, perceived power imbalance and more.  

Mediation is generally suitable: 

• In the early stages of conflict where each party agrees to participate. 
• If there are little to no apparent negative consequences present (such as risks to health and safety).  
• The behaviours or conduct described is recent.  

Note that mediation is not suitable when sexual harassment is alleged.  

At the end of the day, mediation may cost a few thousand dollars but could save the company in the long run – here is why  

This year, a client approached Citation Legal on a Friday afternoon with an urgent requirement for advice on conducting a mediation the following Monday. 

• The client’s HR Manager intended to act as the mediator in this matter. 
• The parties were both senior employees – one was a senior marketing manager and the other the chief operating officer. 

The conflict and issues 

• The issues involved serious allegations of bullying and harassment, conflict arising from systemic policy and procedure and general interpersonal conflict 
• The mediation idea came about when the conflict came to a head with the marketing manager submitting a formal complaint to the CEO. 

The client’s mediation plan 

• The HR manager had been given a copy of the complaint and spoken with each of the parties to suggest a mediation 

The HR manager sought advice from Citation Legal on her drafted mediation plan. The unguided, unadvised mediation plan contained the following: 

1. Talking through each issue. 

1. The mediator proposing solutions to the parties in respect of the issues. 

1. The parties agreeing on predetermined resolution outcomes (determined by the HR manager). 

1. The parties entering into a formal written mediation agreement (to be kept on their file). 

Sadly, because the business was focused on ‘predetermined resolution outcomes’, there was no point to the mediation as the outcomes had already been determined by the HR manager. What’s worse is that the parties’ input during the mediation had not yet been considered, nor had the issues even been explored. 

Citation Legal had the following advice instead:  

• Initially, Citation Legal advised the client that given the allegations involved bullying and harassment claims, an investigation would be more appropriate prior to engaging in mediation particularly given the health and safety concerns arising from the bullying and harassment complaint. 
• Unfortunately, the client could not be persuaded to conduct an investigation or to engage Citation Legal to conduct the mediation at this stage because they had already committed to the parties that the mediation would occur on the Monday and wanted to facilitate it themselves. 
• We advised the business on the eight stages of facilitative mediation recommended as part of the National Mediation Accreditation Standards (NMAS).  
• We elaborated on each of the stages briefly for the benefit of the client. 

Unfortunately, because the client didn’t embrace our guidance on how to conduct an effective mediation, the mediation went ahead but did not result in any agreement or positive actions being taken by the parties. 

• The complainant (the marketing manager) was further aggrieved by the process.
• The complainant further escalated the matter to the Board and the matter (and risk associated with the issues) further escalated significantly. 

What can be learned from this imperfect mediation 

• The client could have taken the time to investigate the complaint properly to determine if mediation was appropriate in the circumstances – and mitigated health and safety risks by doing so. 
• The client could have engaged the accredited mediators at Citation Legal to conduct a proper mediation and would have had significantly greater chance of resolving the matter within 2-3 weeks of their initial contact. 
• Instead, the client required legal advice in respect of the matter at a cost of nearly $20,000 and the matter was not resolved for a number of months. 
• Ultimately the marketing manager resigned. This is not what the client wanted because she was a long serving (knowledgeable) and very talented marketing professional who understood their industry intricately. 
• The client was left having to replace the marketing manager and this took quite some time and incurred further costs associated with recruitment, training and development before they achieved a return on investment in the new incumbent. 

About our author

Amanda Curatore is a qualified Senior Associate at Citation Legal and Citation HR. Amanda is highly experienced in providing workplace relations advice and assistance to clients in a wide range of matters including employment contracts, modern award interpretation, managing performance, bullying and harassment, terminations and managing risk. Amanda is also a Nationally Accredited Mediator through the Australian Mediation Association.