white black legal international law journal ISSN: 2581-8503

Peer-Reviewed Journal | Indexed at Manupatra, HeinOnline, Google Scholar & ROAD




Authored By - Chandrika Joshi




In North America, the mediation in labour disputes are most commonly used because instead of going to labour courts they prefer this mode that saves time and cost for both company and parties.


By going for litigations in the labour disputes the reputation and goodwill of companies affected negatively. So, the companies tried to resolve the conflict within the organization either by appointing a third neutral party, a mediator or the appointed manager of negotiations.


“In the United states, mediation has been the tradition in labour relations since 1898, when the Erdman Act created a settlement system for dispute between railway carriers and workers for salaries, working time or other working conditions.”


In the case of “Glimer v. Interstate/Johnson Lane Corporation - 500 U.S. 20, 111 S. act. 1647 (1991)”, the issue arose can an Age Discrimination in Employment Act of 1967, (ADEA) claim be subjected to compulsory arbitration? Then the answer given in this case was yes. The Supreme Court held that claims under the ADEA were subject to resolution by actions of the Equal Employment Opportunity Commission (EEOC) aside from judicial resolution. These types of labour conflict are resolved through ADR and mediation is one of the best modes used.


“The famous Dunlop Report, chaired by the former Secretary of Labour John T. Dunlop (Dunlop Commission) in 1993, which has strongly advocated a larger role of mediation in collective and individual labour law.”


Only mediation is a non-conflict dispute settlement instrument, where the parties are looking for quick and amicable resolutions.


“In the 20th century mediation was used in collective disputes, individual disputes and conflicts within the companies. Among all ADR procedures, mediation is the preferred method in the US business world.” The biggest US Companies rely on the mediation and appoint the third party to be a mediator for resolving disputes amicably.



In Germany, there was an exclusion of arbitration modes in labour law, according to their Labour Procedure Code. They believe that mediation process or any ADR modes are less legal binding and provided with an inferior legal training, independence of mediator affects the decision as well.

They have more trust on Labour courts, as there was a proper courtroom system and binding judgments, rather than any of the ADR modes.


The culture and economy of each country is different from others, their legal system and rules. Like European countries and United States countries have different legal procedures and rules where one believes opt mediation is the good option for companies where others don’t believe this.



Mediation is the voluntary process which helps the parties to come up with an amicable solution. Labour disputes or conflicts may arise at any time or at any stage like between top level and middle level organization or middle level and lower level and sometimes lower level and top level organization. The consequences of labour conflicts arise like strikes, shutdown of work, suddenly leaving the organizations or any other ways.


Instead of going to court or litigations, companies should opt for ADR mechanisms for resolving the disputes within companies.


Why mediation? :-

  1. It helps the parties to talk to each other in such a way that it clears the misunderstanding, issues or conflict.


  1. It helps to establish working and healthy relations among parties.


  1. It helps the parties to identify their interest and needs and according to their needs provide best solutions.


  1. It saves time and cost as well for both the parties and organization.


  1. Discussions are always related to present as well as future goals or emotions on which they both work equally.


  1. At any stage of conflict they would refer to mediation with the aim of improving relations and maintaining a healthy environment in companies.


  1. During the process, the mediator will maintain the confidentiality of all the information and facts disclosed by parties.


  1. Mediation process is a simple and trustworthy mode of approach for resolving labour conflicts within the organization.


  1. The most essential element of mediation is that the reputation of companies or organizations will be protected during and after the process.


  1. Parties are required to enter into an agreement and sign on the agreed terms and conditions that reduces the conflict in future.


From the above points, it can be said that mediation is a much better option for companies than the litigation or judiciary option.




The conflict that arises between employees or employers adversely affects relations. The primary goal of a company or organization is to provide friendly relationships among all the employers as well as employees at all the levels and if conflicts arise among them it would lower the goodwill in the market. Internal factors are also affecting the growth of the company and the labour disputes are one of those internal factors.



So, the company always tries to maintain friendly relations among laborers by providing different perks like incentives, bonuses, leaves, holiday packages, organizing different camps or competitions for encouraging them,etc. But sometimes even after providing these facilities conflicts and disputes arise and then the mediator comes into the role.


Mediator assists, does not decide! They facilitate them and provide a platform for better understanding of problems and focusing on possible solutions. Mediators give each party equal opportunity for disclosing the facts and their point of view. After listening to their point of view, the mediator framed facts in the issue, preparing short notes on each party’s statements, recording every small detail of it, etc.


Mediators have full control over the process, and act as a neutral, impartial, and independent third party in the process. He/she will articulate and identify the needs, interests, and priorities of each party.


After finding all the information, he/she will try to give best options for their problems but the ultimate decision to choose the options is upto parties. The whole process is party centric.

Mediators make the environment free among parties. Should not apply pressure on the weaker party or not push the party to settle where they don’t have interest.




“This section is the mandatory provision,where the central government shall maintain a panel of experts to be called as the Mediation and Conciliation panel”.  Generally, the disputes arising under companies are filed in National Company Law Tribunal (NCLT), or appellate filed in National Company Law Appellate Tribunal (NCLAT). But these litigations are time consuming, expensive process and affects the goodwill of company as well, due to increasing number of pendency cases, “central government commenced the process for constitution of the panel, and initiated the Companies (Mediation and Conciliation) Rules, 2016 on September 9, 2016 (''rules”) in such regard.”


It must be ensured that the mediation/ conciliation process under the CA 2013 remains voluntary.



Firstly, the mediator and parties met in a room where both the parties are facing each other and the mediator sits in the middle. Then the first session started with the opening statement of the mediator. In which he/she explains the whole process, duration, rules and regulations followed during the process. Respecting each other as well as mediators. The 1st meeting is the important stage of the process to set and create the environment calm and friendly for both the parties. To ensure that they can easily share their feelings and emotions with the mediator.


Before the 1st meeting they organize a pre-mediation meeting for identifying the people involved and their intentions.


There are two types of sessions: private session and joint session.


PRIVATE SESSION :- In this session, mediator and one party have one tone conversation and all the information shared among them not to be disclosed to the other party until and otherwise agreed by the other party. Those information are kept confidential and mediators point out the facts in the issue and try to negotiate on those points. Private sessions are very useful for both parties as they don’t have to face the other party and get comfortable with the mediator. Generally, the first session is the private session and that gives a chance to both the parties to trust the mediator.


JOINT SESSION:- This session is conducted after the private session and when both the parties have agreed to see and communicate with each other. This session helps both the parties to reach a settlement and agree on the best alternative options for both of them. In this, parties play an important role and decisions were taken by them. Mediators support both of them and facilitate platforms to reach a settlement.


REASONS WHY MEDIATION IS NOT SUITABLE:- For every labour dispute mediation may not be the suitable option. There are some demerits of mediation:-


  1. Sometimes before going for mediation they tried to talk to their manager because they know them very well and are easy to trust.


  1. Maybe sometimes instead of an independent mediator, the manager tries to resolve the disputes that will reduce their managerial responsibilities and cost as well.


  1. In the case of criminal liability, mediation may not be the good option because in that case one should be right or the other should be wrong and the mediation is the win-win process.


  1. Sometimes parties are not able to reach an agreement or settle the issues that cause the failure of mediation.


  1. We may say that mediation provides unrealistic expectations of a positive outcome.


In the labour disputes it may take some time for resolving the conflict and for reaching an agreement. It might increase the cost and time.













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