Mediation Agreements

Problems in the employment relationship often lead to the employer and employee attending mediation at the Department of Labour. If the issues are resolved the parties will sign a “record of settlement.” Agreements reached privately can also be signed off by a mediator which then gives them the same legal status as a settlement reached at mediation.

These settlements are legally binding. Almost always they contain provisions regarding confidentiality and for the payment of money by the employer to the employee. In the recent case of Joumaa v Pita Doctors Ltd the employer failed to make payment on the due date because it was experiencing serious financial difficulties. The Employment Relations Authority punished the employer’s failure by ordering that it pay a further $300 to Mr. Joumaa. Had it not been for the fact that the employer was experiencing financial hardship; the penalty would probably have been much greater. In our experience, most employers take their obligations under these agreements seriously, and it is rare that there are difficulties once an agreement has been reached, however, if there are difficulties something can be done about it.