Independent third party mediation - alternative approach for managing reorganisation

Posted in : HR Updates on 11 September 2017
Steve Tweed
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The second article in this series on mediation reflects on a case study in which independent third party mediation is employed as a successful and timely alternative to traditional approaches used in managing reorganisation. This case study demonstrates how mediation can be used to avoid a potentially costly and damaging dispute.

A major all island company had arrived at the end of the road in negotiations with the recognised trade unions having failed to conclude an agreement for a reduction in staff numbers, redeployment of staff, and restructuring of activities to protect the future of the business. Both the employer and trade unions were gearing up for a potentially long and ultimately costly dispute.

Imposition of the changes could damage employee/industrial relations, and lead to a dispute in the short term, with the potential costs and loss of income as well as reputation damage for the company. Due to the financial pressures on the company, time was rapidly running out and the imposition of the changes was becoming a reality; contingency plans were being drawn up in an attempt to mitigate the impact of a dispute.

In a last effort to avoid a dispute it was jointly agreed that independent mediation should be explored to support effective ‘solution-finding’ and agreement.

However, with the time constraints on the parties a period of hand holding and the usual ping-pong mediation between the parties was not an option.

Once the “What sort of mediation do you want?” question was asked (see previous article) and it was determined that “Something a little bit more directive” was preferred, the serious work of shaping what that direction looked like could begin.

A trusted third party with extensive experience and expertise, across many years in the industrial and employee relations arena, will draw on their knowledge, seek to avoid potential pitfalls as well as securing outcomes, critically providing skilled guidance with a little direction to the parties which generally assists in yielding a successful outcome. Adopting a ‘textbook’ or overly formulaic approach can be unhelpful, providing little in the way of alternatives being suggested to the parties.

In difficult circumstances, mediation is not just about ‘holding hands’ with the parties - even if time allows for it. The process is about understanding and grasping the issues promptly, the circumstances, the options, and a direction towards an agreed solution which is sustainable and robust. When parties have already failed to find common ground, a pragmatic and direct approach by an experienced mediator will contribute to finding new pathways and securing an agreement.

There comes a time when the parties have to be offered guidance that some outcomes they are seeking will just not happen. However, simply stating that an outcome (or outcomes) will not materialise is of no use to anyone. Getting the parties to think of alternatives, edging them to consider a different approach to achieve their objectives, to compromise and to be innovative in solving the problems before them can elicit results and conclude a mutually acceptable agreement.

For the company mentioned earlier, a significant programme of change was envisaged and, with the support of an experienced mediator, resulted in a number of critical changes being agreed:

  • Redundancies – a reduction of approximately 10% of the workforce. With a voluntary approach being the preferred option, there was a recognition that the best severance terms affordable should be offered. Unfavourable terms do not attract volunteers, and a lack of volunteers inevitably results in compulsory severance and the prospect of a potentially damaging dispute. There’s a delicate balance to be achieved by the mediator, with gentle direction, to steer all parties to consider proposals that edge them towards the overlap in objectives where an agreement is achievable.

An inevitable follow on from many redundancy programmes is the issue of redeployment, selection procedures and an appeals mechanism. To maintain independence the appeals process can also be managed by the agreed third party.

  • Head office restructuring and the closure of office locations – the same re-deployment criteria and appeals process can be utilised, and for predictability and security a relocation policy and procedure can be built into the process. This has the effect of increasing confidence into the entire programme.

The case outlined resulted in an agreement that implemented significant change in the workplace on a voluntary basis and with the agreement and support of employees and their representatives. The company is still trading and has returned to profit.

Mediation/conciliation facilitated by an experienced mediator and encompassing a little prompting and direction had the effect of moving all parties from a stalemate to an agreement in the relatively short time available. 

This article is correct at 11/09/2017

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Steve Tweed

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