Thank you, David. I'm very pleased to be here today because in my opinion mediation is an incredibly useful and often undervalued tool in managing litigation in general, and workplace disputes in particular, and one that could save our employers and the wider community a large amount of valuable management time, not to mention legal fees.
Of course, as a lawyer, I should be rather nervous of mediation and its unique ability to resolve problems out of the courts! But, as Shadow Secretary for Trade and Industry, and Shadow Solicitor General, mediation is an area of great interest to me. Indeed, were the Houses of Parliament to adopt more mediation techniques, history could have been very different. Guy Fawkes may not have lost his life; the English Civil War could have taken place around a board table, and Charles Kennedy may still be leader of his party. Perhaps we need a few more HR professionals in the Commons to help us resolve some of our more heated debates!
As David said earlier the interesting thing about mediation is that its potential value is absolutely not limited to the work place. You only have to open a newspaper to hear about neighbourly disputes between quite reasonable people which have escalated to such a level that property is damaged and in some cases destroyed. How many families are ripped apart by long forgotten disputes that simmer away, breeding resentment and anger?
But it is, of course, a serious employment issue. How much money is spent by employers on legal costs, fighting court battles over disputes that have escalated unnecessarily because of failings in processes, or management, or simply lack of awareness that an alternative exists? The reality is that in many employment-related disputes, going down the route of a court battle could be likened to using a sledge hammer to crack a nut.
But what is the alternative? How do we ensure that mediation is seen as a real and viable option in dispute resolution?
In my view, there are three pressing issues that we must tackle.
First of all, employers need to have the right processes in place. Listening to and responding to a problem early on can help ensure that it doesn't snowball into a major dispute. Giving employees the tools to voice any grievances, and creating an environment where they are not afraid to do so, will go a long way in avoiding costly legal disputes.
Secondly, we need to look at the onerous burden of regulation which the present Government has heaped upon companies. Regulations are now so lengthy that, according to the Chartered Institute of Personnel and Development, over half of all employers consider legislation too complex, and employers don't consider the sanctions much of a threat, which can only mean patchy implementation at best. Ben I hope I haven't stolen your thunder.
The fact of the matter is that there are now so many regulations and rules that HR professionals simply don't have time to understand and implement them. And what happens when there are too many regulations to comply with is that some get dropped, or poorly implemented, or introduced as a box-ticking exercise instead of being explored properly as something that can add value to, or improve the business.
When there are so many regulations that companies have to comply with, it becomes difficult to sort the important ones from those that are simply the whims of bureaucrats. Initiatives such as encouraging flexible working, and improving the employment prospects for minority groups, fail because the regulations are either too onerous, too complicated, or simply don't meet the needs of employers or employees.
And often, reams of regulations are introduced for very little benefit. I would hate to think of the number of days the Working Time Directive has taken up - of civil service time in drafting it, HR professionals in trying to understand and implement it, journalists writing articles about it, workers adapting to the new requirements imposed by it. And what has the result been? Well, according to research, the Directive is considered beneficial by only 22% of employers, who complain that they are weighed down by the burden of compiling huge amounts of data on hours worked, adding significantly to their workload. And according to research by the CIPD and law firm Lovells, four fifths of employers report that working time has remained almost entirely the same since its introduction. Four fifths of employers, then, are saying that the regulations have had little or no impact. Which must make us all wonder, was all that time and effort really worth it?
And let's consider paternity leave. This new regulation was introduced without considering the impact it would have on smaller employers. Small companies simply don't have the resource to administer it, or the operational flexibility to cope with the loss of key employees for prolonged periods. It was also introduced without sufficient research into how many fathers would want to take up the offer of leave, and if so, what the right level of pay rate should be. Unsurprisingly, the take up for paternity leave is currently low and the take up rate for additional paternity leave is also expected to be low because the proposed pay rate is only £106 per week. Recently, EOC research showed that only 28% of fathers would take statutory paternity leave at £106 per week, but this would rise to 80% if statutory pay was increased to £200 per week. So whether or not you agree with the politics of these regulations - we should all be concerned by the fact that they simply do not work. Perhaps someone should have asked that question before the regulations were introduced.
In fact, in total, some estimates suggest that between 1997 and 2004, the additional regulations heaped on employers in the UK cost them around £30bn to implement. £30bn. Not a figure to be taken lightly.
Accordingly one important policy review for my Party will be to address this burden of regulation. For instance could changes to the employment tribunal system be made that would discourage frivolous claims and also discourage the culture of employers looking to settle - just to save the wasted time and bureaucracy of the tribunal. Surely this must be part of encouraging the parties to use mediation as an attractive alternative.
Other initiatives, meanwhile, get lost under reams of guidance - the 2005 income Tax - Trading and Other Income Act is made up of over 880 sections, each of which contains detailed guidance and a few formulas thrown in for good measure, and that's without getting to the table of abbreviations that you need to keep to hand in order to interpret the rest of it. Bearing in mind that there has been a 46 per cent increase in the number of new regulations introduced by this Government according to the British Chambers of Commerce, employers are simply being swamped with information. At the same time HR professionals , not to mention finance and other professionals, aren't being allowed to do their jobs properly. Instead of using their professional judgement and devising policies which work for them, they are being forced to spend their time trying to work out how to understand and implement detailed policies that have been imposed upon you.
And thirdly, we need to look at how the Government can help employers to improve mediation, and to encourage them to use it. Not with threats, sanctions and very detailed rules, as the current Government has done, but by creating a real dialogue with employers. By asking them how mediation can help them, and making sure that they have all the information and support that they need.
By considering mediation, we also need to look at the wider context of dispute resolution. It will mean reviewing the cases that currently come to court and looking for ways that disputes can be settled earlier. It might mean reviewing employment tribunal systems, and bringing in not a 'tick the box' mediation requirement, but real services to bring parties together and to try to resolve issues before they reach the court.
So where are we now on mediation? Perhaps a quick recap might be of use. The Employment Act, 2002, introduced statutory dispute resolution procedures including 'three step' minimum dismissal, disciplinary and grievance standards to be incorporated into all contracts of employment as an implied term. It made dismissals without the use of the minimum procedures automatically unfair, and made claims to tribunals without the use of the minimum grievance procedures largely inadmissible. The idea behind the legislation was, according to the DTI, to encourage employers and employees to discuss problems first, before resorting to tribunals.
But has this legislation worked? Let's look at the figures. In 1997, just under 80,000 Employment Tribunal applications were received. By 2004, two years after this legislation had been passed, this number had leapt to well over 110,000 applications. The fact of the matter is that in too many cases, employers have taken a 'tick the box' approach to these regulations, because they are simply not designed with employers in mind. Holding a statutory meeting is simply not going to create a dialogue between two unhappy parties unless they both really trust the process and both have an opportunity to present their case.
And this is where the current Government so often falls down. It may sometimes have laudable aims, but it is too often so preoccupied with the detail - producing reams and reams of very detailed guidance and intricate rules that must be followed - that it misses the real issue. In the case of mediation, the real issue is to persuade employers and employees that mediation is of benefit to both parties. And for that to happen, there need to be real benefits, and real outcomes. If mediation is simply seen as yet another step in the bureaucratic employment process, neither party will take it seriously. If, as has been demonstrated, these new requirements for mediation do not reduce the number of employment tribunals and court cases, employers will, quite rightly, wonder why they are bothering.
So how can mediation be made to work? Well, firstly, imposing a solution on employers, and expecting employers of all sizes to conform to one way of doing things is obviously ridiculous. Demanding a whole ream of detailed rules to be followed during mediation, which leads to employers worrying more about how the notes are taken than what is actually achieved, is also obviously another nail in the coffin for successful mediation.
Rather, I would like to see mediation discussed with employers, large and small. I would like to hear the input of you, the HR professionals who will be largely responsible for running the process. I would like to see mediation seen as a positive dialogue, rather than simply dispute resolution, and that means working with employers and not against them, introducing policies that work instead of imposing policies that don't.
If mediation was viewed more positively and was more readily available, how many good performers might actually raise an issue that they currently resign over, losing your employers valuable staff? How much lost revenue might be saved? According to the CIPD, the average employer has around 30 formal disciplinary cases and 9 formal grievance cases each year. Managing conflict at work costs the average employer nearly 450 days of management time a year. And a recent report suggests that bullying alone costs employers in the UK £2bn of lost revenue each year.
Employers need a solution, they need processes that include mediation but that also provide innovative and considered ways for employees to highlight and address their grievances. And it is this that I would like to see considered, not a list of stringent rules that encourage employers to see mediation as yet another burden instead of a strategy that could improve morale, boost performance and save them valuable resources. Might good mediation not in turn help your managers become better at their jobs? Might we create a culture not of blame but of open dialogue and continual improvement?
The point is, that any dispute by nature has at least two interested parties. And for dispute resolution to work effectively, mediation needs to be of value to both parties. There is considerable will to make mediation work across the business community, but employers feel let down by the Government, and under attack with the ever increasing burden of regulation whether cutting the amount of service for unfair dismissal or increasing the maximum claim rates or union recognition rights to name a few. Only by reducing that burden, only by focusing on the things that matter instead of trying to micro manage every detail of every employment practice, can the Government really support employers and employees.
The fact of the matter is that if people can't see a way forward in resolving a dispute, if they don't have confidence that their grievance will be listened to and that their point of view will be considered, then they will resort to extreme ways of ensuring that their voice is heard. We see this in politics all the time, from the Suffragettes chaining themselves to railings to rallies outside the Houses of Parliament - yet another opportunity to air a grievance that has, incidentally, been taken away by the current government.
And it's important to understand that good mediation does not try to impose a one-size-fits-all approach. People with disputes need to know that there are a range of services, options and sources of advice open to them, which are easily accessible and understood. But it means changing the way we do things quite considerably. It means taking responsibility for disputes instead of expecting the courts to sort it out. It means listening to another point of view.
That is what I would like to see. And that is what a Conservative Government would work towards. At which point, I would like to thank you, Ladies and Gentlemen, for listening to my point of view, and to thank the organisers of this important event for inviting me to talk to you.
Thank you.