"We will bankrupt you". “You’ll be blacklisted”. "We will destroy your entire career". "You'll never work again". These are what employees are likely to hear in MBIE mediation, under the cloak of confidentiality.
The reason? Often to get as much out of the employer in legal fees as possible.
They're not there to help resolve an employment relationship problem even though that was the original intention of the architects of the Employment Relations Act (2000). They are skilled at getting the HR manager off the hook when legal costs blow out, or possibly the HR managers are being bullied by other managers who instruct the external lawyer. HR managers in the private sector obviously have shareholders' interests to consider, but public sector managers can often just just let the taxpayer pick up the tab.
What is likely to happen in mediation is that the employee is left alone in a separate room for much of it so that he/she is unable to inspect documents such as hard copies of emails and verify their authenticity. Remember that a lot of documents relied on in mediation are the product of bogus workplace investigations. And if the employee agrees to sign a Record of Settlement (RoS) including a non-disclosure clause, it would no longer matter if the documents were incorrect or even faked.
If the employee goes into mediation thinking they can take time to consider signing, it doesn't work like that. Lawyers will often use threats such as in the first paragraph to get the employee to sign before mediation ends.
Of course not all mediations are so scary especially when the employee has relatively portable skills and good references available from previous jobs - a reasonable percentage of employment disputes are resolved peacefully and in a cost effective way. Settlement agreements that come out of mediation are a good way to give employers some certainty that they don't have to deal with a Personal Grievance. But we are seeing that the idea that under s 149 whistleblowers can be silenced and fraud can be covered up is very widespread as discussed in our most recent blog: https://www.leightonassociates.co.nz/post/no-police-no-worksafe-no-media-or-else-by-tristam-price
In 2015 then Chief Judge Colgan said a former employee in the medical industry (both parties anonymised) was gagged under s149 thus:
(Para 3) ...The parties will not disclose to any other person or entity that such an agreement has been reached or any of the circumstances/allegations leading to the Employee’s resignation. The parties agree that neither will take any further action in respect of the employment relationship or termination thereof. This includes, but is not limited to, making a complaint to the Police, the [relevant professional association] or raising a personal grievance. (TGP v TFE, EmpC 60, 2015).
What protection a potential whistleblower might have under the Protected Disclosures Act (2000) is cancelled as soon as they sign a mediated RoS.
Similarly, an employee who signs a RoS no longer has protection from blacklisting or "backdoor references" under the Privacy Act 1993. Any apparently mutual non-disparagement clause is not binding on the person most likely to disparage the departing employee - their manager (assuming the manager is not in the mediation). So even if an employee signs a RoS under threat of blacklisting, they often get blacklisted anyway, ending up unemployed or underemployed even years later.
But lawyering up can prevent that, right? Sure, if you're lucky enough to get a lawyer who is principled enough not to sell out to the other side. We're aware of a current High Court action one former employee brought against three Wellington lawyers who did just that, the first in relation to a bogus employment investigation, the second who allegedly flipped in the mediation, and the third who rolled over on a SLAPP.
Unfortunately, principled lawyers who refuse to betray their clients also get targeted by cliques within the industry. Advocate Allan Halse has been targeted with three SLAPPs, all currently before the Employment Court.
ERA members are mostly lawyers and many return to private practice after their term ends.
Turning up to mediation without a lawyer potentially has three advantages:
- cost saving (no legal fees to be deducted from any payout)
- avoids the risk of being betrayed
- enables the employee to participate in the mediation at all times including inspecting documents.
For those reasons, employees considering mediation should resist pressure from HR to lawyer up, and once in mediation, should be prepared to walk out at the first sign of a threat. Don’t expect the mediator to oversee the settlement agreement; it is not their job to ensure that any contract is fair or even legal. But we don't recommend taking a personal grievance in the ERA without a lawyer or advocate.
We realise that many employees would not be capable of going through the mediation process without a lawyer as workplace investigations especially bogus ones are extremely stressful. But those who have the confidence should read up on employment law and seriously consider representing themselves.
Mediators, lawyers and even judges may claim that mediation is confidential and privileged but that is wrong: under s148 only offers to settle are confidential.