CEDR Model Employment Contract Clauses

7/31/2019 CEDR Model Employment Contract Clauses

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20/02/06

Model Employment

ADRcontract clauses

February2006


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Centre for EffectiveDisputeResolution,InternationalDisputeResolutionCentre, 70 FleetStreet,London EC4Y 1EUTel +44 (0) 20 7536 6000 Fax +44 (0) 20 7536 6001 [email protected] w w.cedr.co.uk

Registered in Englandas Centre for EffectiveDisputeResolutionLimitednumber2422813 RegisteredCharitynumber1060369

Model ADRContractClauses

Why you should considerincludi ng an ADR clause in youremp loyment contracts,

policies and procedure s.

As mediation in employmentmattersincreases,organisationsmay wish toinclude clauses, and

incorporatereferenc es tomediation(and otherforms of conflictresolution) in theirkey

policies,procedures and employmentdocumentation. By enteringintoformal ADR/mediation

agreementsand establishingmediationservices or scheme s employers can manage conflict

proactivelyand controlriskfactors in litigation.

CEDRSolvemediationschemes,procedures and policies, will promotebestpractice in

employee relationsand the employmentenvironment.Employers,TradesUnions,groups of

employee representativesand otherstakeholders,may welcome such developments in

modern disputeresolutionand conflictmanagementsystems.

CEDRspreferred and recommended approach in developing mediation in organisations is by

itsconsistentincorporation,throughoutthe employmentenvironment, by means of

mediationpolicies and agreements.Inthisway mediationcan make a sustainableimpactand

contributionand be an integralpart of an organisationsculture.It is however,recognised that

as mediation is a developing field itsintroductiontoorganisationsmay be in

incrementalphases.

Even ifmediationpolicies are notadopted fully in the firstinstance, including contract clauses

and/orstatements of intentwithinyouremploymentprocedures, will encouragepartiesto

att empt tosett lea dispute by some form of ADR. Simply putthis should increase the chances ofsett lingany such disputebefore,thepartiesresorttolitigationorarbitration.

The advantages of insertingADR/Mediationclause/sinclude:

Promptingthepartiestoconsider a process that may notneces sarily occurtothem

Introducinga specificprocess, giving thepartiesa clear framework for exploring

sett lement

Involvinga neutralthirdpartythroughthe mediationprocess trainedtoworkwith

partiestofacilitatecommunicationthat is geared towardsan agreed and lasting

sett lement

Changingthe focus for thepartiesaway from the events of thepasttowardspotential

solutionsand the need s of the future

Keepingand/ormoving the negotiationout of thepublic arena throughthe mediation

process

Providing substantialsavings in legal and managementcosts,freeing up thebusiness for

more productiveendeavoursby achieving an early resolutiontothe dispute

Achievingabinding solution - over70percent of mediationsreach an agreed and

binding solutiondespiteearlierimpasse.

CEDRFebruary 2006 1
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AnADR/Mediationclause may wellpre-emptthepartiesseeking recourse toan

EmploymentTribunal and provide fortheprocess totakeplace on theparties own pre-

agreed terms.

How

For any clause orpolicy statementtobe effectivethe draftspersonneed s tounderstand which

policies and procedures it will impactand how thismay be bestmanaged withintheirown

employmentenvironment.It isbestthat any individual draftingmediationclauses and

policies has a sound understanding on ways, in which mediationcan be used in employment

mattersand in organisations.

The following is - are a few of the issue s a draftspersonmay wish toconsider.

1 Deci sion makers

Do you wanttoidentifythe likely decision makers who may be engaged in the AD Rprocess

e.g. HRDirector,CEO? It is notstrictlynecessary, you can simply refertotheparties,

leaving the decision tothe relevanttime. Inany mediationscenario theparties tothe

disputeare always encouraged tocome with full authoritytofinalise and sett le matters.

2 Stakeholders/PotentialParties to the di spute

For a mediationclause/policy tobe effective in the employmentenvironment(as with

any employment policy) itmustreflectthe interests,rightsand obligations of the

individual employee and of any collectiveorrepresentativegroups e.g.TradesUnions. It

is, of course,advisable that employers inform and consultwiththeiremployees, on the

introductionand development of any mediation policy withinthe organisationas early as

possible.

3 Pre-litigation

Do you wanttoattempt the ADRprocess before any adversarial process begins?The

opportunityforsett lementmay be greaterbefore the lines ofbattle have been drawn

by a hostilestep of commencingproceedings/arbitration. AnEmploymentTribunal may

be requestedtodelay a hearing date toallow partiestohonourtheiragreementto

mediate.

4 Singularclause orembedded within a Medi ation policy?

Do you wanttouse a singular clause orstatement of intentwithinthe employment

contract,or embed ADRprinciples andpossibly a mediationscheme or service that

ensures the consistentpromotion of the use of ADRprocess es across all policies andprocedures as yourorganisation?Herechoices may include whethertomove straightto

mediationor for example toprovide fordirectnegotiationsfollowedby mediation if the

negotiationsfail.Indeciding resource impactand implications of eithernee d

consideration.

CEDRFebruary 2006 2
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5 Time limits / time spa n

Whattimeframe do you want? Youmay wish toprovide for a clear process andtimetable illustratingstages ofprocedure where mediationmightbe most

appropriatelyused. Inthe employmentcontext, do you wanttodifferentiate how

mediationmightbe used in certainpost-employmentsituations? Youmay also wish to

clarify whetheryou wantthe mediationtotakeplace before or during an

adversarial orwhetheryou wanttoleaveyouroptionsopen.

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Model clauses

1 Coremedi ation clause foran employment cont ract

Corewording - fora dispute or

disagreementduringemployment

Ifany dispute,complaint ordisagreementarises

in connectionwiththisemploymentcontract,the

parties will firstattempttosett leit by mediation

in accordance withtheCEDR ModelMediation

Procedure.

Unlessotherwiseagreedbetweentheparties,themediatorwillbe nominated by CEDR.Mediation

willbe enteredintobothvoluntarilyand in good

faithand neitherparty, by enteringinto such a

process will waive theirrespectivestatutory or

contractualemploymentrights.

Notes forthe draftsperson

Indrafting such clauses it is importantthat a clear

process for mediationand itstriggermechanisms

are properly described.ReferencestoCEDR

and/ortheCEDRModelMediationprocedure may

be appropriate iftheorganisationhas a scheme or

intendstouse CEDRsservices.

Organisationsmay also wish toidentifya

custodian oftheprocess i.e.naming the

individual responsible for setting up themediation

process and underwhatauthority? E.g.Inrelation

toa senior contract -Would thisbe theHR

Director,Chairman oftheRemuneration

Committee ortheCompanySecretary?

Options on when themediation should takeplace

should be leftopen orclarified e gbefore or

during an adversarial procedure (such as an

EmploymentTribunal)

As in Notespages 4-6 references totiming,

notificationand legal orTribunal proceedings may

be equally appropriate.

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2 Coremedi ation clause wherethere is a medi ationpolicy orcollective agreement

in place

Corewording - fora d ispute or

disagreementduringemployment

Inany claim ordisputearising outof, or related

tothisagreement or toany aspect ofthe

employmentrelationship including statutory

claims,themattermay be dealtwith by

mediationundertheterms oftheCompanys

agreed ADR/Mediationpolicy/scheme.

This will include withoutlimitation,all mattersrelatingtothecontractsformation,and validity,

binding effect,interpretation,performance,

breach ortermination.

The mediatorwillbe nominated by CEDR in

accordance withthe(agreed) Mediation policy and

scheme.

and /or

Undertheterms ofa CompanyagreedADR

policy,mediation is a voluntaryprocess, which is

only conductedwiththeagreement oftheparties

in dispute.Either,or,anyparty in a dispute is

encouraged tosuggestmediationas a way of

resolving a difference ordispute.Parties in any

disagreement ordisputeare requestedto fully

consider,resolving theirdifferences through

mediation,before takingany legal action.


Organisationsmay draw up theirown A DR/

Mediationpolicies and refer tothese in their

employmentcontracts.Incases,where a CEDR

Mediationemploymentscheme orservice exists

theymay wish toinclude some reference tothis.

Where such a service ispart ofa Works Council

agreement orwherepolicy which has been agreed

withany Trade Union or employee representativegroups,this should also be stated.

Someorganisationsmay use internalmediators

in thefirstinstance.A scheme should be clearon

when and in whatinstancesan externalmediator

from CEDRmightbe appointed.

A Mediation Policy mightgive examples ofthe

types ofdisputes, which would be mostsuitable

for mediation.Itmightreserveitsposition on the

voluntarynature ofmediation,butemphasise the

appropriateness ofmediation prior toany form of

externallitigation.

Payment for mediationalso needs tobe clarified.

Iftheemployersuggeststhat itmightpay all the

costs ofmediation,does thisneed tobe

monitored in some way? Ispayment ofcosts

necessary toencourage partiestomediateand

resolve theirdifferences ormightthesebe

perceivedas putt ingapartyunder duress to

mediate?

Employersare also advised tomake a clear

distinctionbetweenmediationcostsand coststo

theemployee oftheirown advisors costs so that

thereare no misunderstandings.

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3 Coremedi ation clause within a disciplinaryand capabilityproce dur e andpolicy

Corewording

The mostappropriatecourse ofcomplaint

regarding any actiontakenwithinthisprocedure

will normally be throughtheAppealsProcedure.

This does notpreventeitherparty ortheiradviser

suggestingan attempttoresolve thedifference by

mediation.Ifthis is acceptable,tobothparties,an

independentmediatorwillbe nominated by CEDR,

as detailed in theCompanysagreed Mediation

policy and scheme

Ifmediation is agreedthedisciplinary process may

be suspended at theabsolutediscretion ofthe

Company.Intheeventthat themediationdoes not

resolve thedisputethedisciplinary and appeal

process shall immediatelybe reinstatedat the

conclusion ofthemediation.


Ifdisciplinary and capabilityprocedures are

operatingeffectivelyand applied fairly and

consistently,thenit is anticipatedthat the

majority ofemployers may notalways consider it

appropriate for disciplinary matterstobe

mediated.There willbe situations in the

implementation ofthesepolicies, which are

definitely non- negotiableand instanceswhere an

independentsintervention is notappropriate.In

thiscontextorganisationsmay,however, wish to

refertomediationand toitsvoluntarynature,

particularly iftheyhave mediationpolicies.

Itmay also be appropriatetoadvise and remind

partiestoconsidermediation prior toany legal

action.

Companiesand employees musttakecare to

observe thestatutorydisciplinary procedures and

toensure that any mediationprocess isplaced

intothisprocedure in a way that does not

compromise rights

norrendereither

part

yvulnerable topenalties.

Suggested Op tional Clauses

Atany stage oftheprocess,thedesignatedsenior

managerorDirectorresponsible forpeople and

employmentmatters(theHRDirector)may

interveneand suggestmediation oran independent

evaluation ofthecaseby a CEDRmediator.

Ifthe policy and appeals procedures have been

exhausted,theemployermay, in appropriatecasesagreetomeetthewhole orgreaterpart ofthe

cost ofthemediationbutnotthecost of legal

representation, in an attempttoreach a

sett lement prior toany Tribunal or legal

proceedings.

Otherissues,as above,are costsand timingand

whethera status quo should be applied,whilst

mattersare being resolved. Forexample is

therea Mediationagreement or policy that costs

ofmediationare split ormet by theemployer?

Arethereinternalmediatorswithinthe

organisationsscheme, who could be used?

Ifmediation is tobe incorporatedintodisciplinaryand capabilityprocedures and processes oreven

be available alongside,it is also emphasised again

that thecustodians of such employmentpolicies

have a sound understanding ofwhen mediation is

mostappropriatelyused.Withoutthistheprocess

may be devalued.


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4 Coremedi ation clause forfai rness at workpolicies and procedure s

Corewording applied consistentlyacross

grievance,diversity,anti-bullying /

harass ment and w hist le blowing policies

Anemployee and his or her managershould

endeavourtoresolve thegrievance (matterof

difference) betweenthem in thefirstinstance

underthenormal terms ofthispolicy.

The Companyoperatesan (agreed) Mediation

policy and procedure.Disputesand differences

arebestresolved at theearlieststagepossible.If

eithertheemployee ormanager considers that

themattermightbebestresolved through

mediationthey should referitto(as stated in the

policy).

Anemployee participating in a mediationto

resolve an issue underthis policy will not

subsequentlybe debarred from either

commencing or taking such procedures further,

including thestatutorygrievance procedure ifthe

matteris notresolvedby mediation.


Some oftheissues above on Disciplinaryand

Capabilitypolicies will also apply totheseFairness

at Workpolicies.

Companies/employers should also ensure that the

statutorydismissal and disciplinary procedures are

observed.

Differentorganisations will have large variety of

channels and approaches for employees toraise

concern on work relatedissues.Fairnessat Work

policies willbe an expanding liste.g.sex

discrimination,age discriminationand many of

thesekey issues will have theirown separate

policies and procedures.

Mediation will workparticularlywell at different

stages of such policies andprocedures,as it

encourages bothpartiestotakejointownership

and responsibility for resolving such problems.

It ispreferable,however,that theorganisation

also has properly developed DisputeResolution/

MediationPolicies andprocedures, which putan

emphasis on early disputeresolution

Insummary,organisations should considerthe

stagesat which mediation should be offered in

theseprocedures,thesort ofresources and costs

involved as well as thefollowing:

Shouldmanagers endeavourtoresolvesuch disputes in thefirstinstance?

Shouldtherebe a gateway?

Is thereapolicy custodian?

Arethereinternallytrainedmediators

todeal with such issues?


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When should an externalCEDR Solve

mediatorbe appointed?

Mostpolicies will have theirown Appeals

processes.Manyorganisations willprefer

mediationto run alongside these,ratherthan

replace them.

It would almostalways be appropriateto

encourage theuse ofmediation, prior toany legal

action.


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Documents

CEDR Model Employment Contract Clauses