What is Alternative Dispute Resolution ('ADR')?  
ADR is a term given to a variety of processes designed as alternatives to issuing Employment Tribunal or Court proceedings.  ADR is voluntary and requires all parties to agree on the type of process.

Types of ADR
There is a range of ADR processes available.  At one end of the spectrum is the process of the parties meeting to try and resolve the dispute.  At the other end is the more formal process of Arbitration.  There are 3 main categories of ADR frequently used in workplace disputes: Mediation; Conciliation and Arbitration.

Mediation involves a neutral third party (the mediator) facilitating discussions and negotiations between the parties within a relatively structured but flexible process.  The mediator helps the parties identify the issues in dispute, find common ground and explore options for potential settlement.  The discussions during the mediation are confidential and without prejudice.  Parties may attend with or without any legal representation, as they prefer.  Usually each party will have their own room where they can meet privately with the mediator.    

In workplace mediations and employment mediations the cost of the mediation will usually be met by the employer.  Accordingly the employee may consider that he or she has little to lose by taking part.  

Advantages of Mediation: 
  • Mediation can improve the relationship between the parties
  • Mediation is cost efficient
  • Mediation is quick
  • Mediation is confidential
  • Mediation is flexible and informal
  • Mediation allows the parties to maintain control
  • Mediation allows a wide range of settlement options
Disadvantages of Mediation:
  • There is no guarantee of reaching a settlement

Judicial Mediation
The Employment Tribunals Judicial Mediation Scheme is offered for suitable cases where Employment Tribunal Proceedings have been issued.  Cases which are suitable for Judicial Mediation are selected by the Employment Judge at the Case Management Discussion.  If all parties agree, the Regional Employment Judge will, having regard to the issues in the case and the Tribunal's resources, decide whether the case should be referred for Judicial Mediation.  An Employment Judge will be the mediator.  If the case does not settle, the Employment Judge who acts as the mediator can not take any further part in the case.  Unlike Mediation the parties do not choose the Mediator.  Judicial Mediation is not an alternative to ACAS Conciliation and both processes can be used in the same case.

Conciliation is perhaps best known as the process undertaken by ACAS in workplace disputes.  Conciliation is different to Mediation in that the conciliator, unlike a mediator, will usually only speak to the parties on an individual basis.  From 6th May 2014 it has become compulsory for Claimants in the majority of employment cases to contact ACAS about an intended employment tribunal claim.  There is then a fixed period during which ACAS can explore early conciliation.

Advantages of ACAS Conciliation:
  • It is a free service
  • If a settlement is reached, the ACAS conciliator can draw-up a binding agreement (known as a COT3 form)
Disadvantages of ACAS Conciliation:
  • The parties can not choose the ACAS conciliator
  • The parties can not generally choose how the process is managed
  • There is no guarantee of reaching a settlement
  • By the time conciliation starts a dispute is generally already under way

Arbitration involves an impartial arbitrator or tribunal considering both sides of the dispute and making a decision on the issues raised by the parties.  There needs to be an agreement to proceed to Arbitration.  Sometimes (typically in construction disputes) the agreement will be in place before the dispute has arisen.  In other cases, the agreement to proceed to Arbitration will be reached after the dispute has arisen.  In the context of workplace disputes, the agreement to arbitrate will usually be reached after the dispute arises, and will most often be reached after the working relationship between the parties has ended.

The Arbitration can either be ad hoc, with the parties agreeing the Arbitration procedure to be adopted, or institutional, with the Arbitration following the rules of the Arbitration institution which the parties have appointed.  The process is quasi-judicial, with evidence prepared and presented to the arbitrator during a formal hearing.  The arbitrator will consider the evidence and decide in favour of one of the parties, and if appropriate, the amount of compensation to be paid by one party to the other.  

The parties will usually be legally represented, and accordingly, costs of Arbitration can be as much, and sometimes more, than if the case had proceeded to an Employment Tribunal.

Advantages of Arbitration:
  • Unlike most Employment Tribunal hearings, it is private
  • It allows full consideration of every issue in dispute
  • There is the certainty of an outcome
Disadvantages of Arbitration:
  • It can be costly
  • It can be slow
  • There will be a winner and a loser