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Guideline for employment problems / PREVENTING: 1.5 Applying the Alternative Dispute Resolution mechanisms (ADR) according to the ladder of ADR activities
During the orientation process of the available literature, we identified the following interventions as most plausible for conflicts on discrimination:
What is employment discrimination? According to the U.S. Equal Employment Opportunity Commission [1], to ‘discriminate’ someone means treating that person differently, or less favourably, for whatever reason. Discrimination can occur in the workplace by co-workers, employers, or business owners. Employment discrimination can occur because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older) or genetic information.
Many countries use Alternative Dispute Resolution (ADR) to resolve discrimination claims at work. A narrow definition of ADR encompasses processes outside a formal court hearing in which a third party helps the parties settle the matter. The third party’s role is to help the parties discuss the matter and resolve it themselves through conciliation, mediation, and arbitration.
Conciliation
This is a procedure through which a dispute is examined by a third-party person, before being submitted to the court. The third-party person acts only as a facilitator by maintaining the two-way flow of information between the conflicting parties and encouraging reconciliation between their opposing positions. The conciliator does not pass judgment or propose a solution but works with the employee and the employer to find an acceptable solution. In some cases, this procedure is mandatory, meaning that the court must be certain that attempts were made to resolve the conflict before the hearing begins, referred to as mandatory conciliation.
In Italy, for example, recourse to the judicial authorities for the settlement of a labour dispute must be preceded by a compulsory attempt at conciliation, called administrative conciliation. At the beginning of the judicial procedure, if the court finds that no attempt at conciliation has been made, the proceedings may be suspended and the parties are then required to resort to the conciliation procedure.
In the United Kingdom, any application by an employee to an employment tribunal is systematically referred to a conciliation officer of the Advisory, Conciliation and Arbitration Service (ACAS [2]). In addition, pre-claim conciliation is implemented. In this case, when ACAS is informed of a dispute, including through its helpline, the parties are asked to consider finding a solution before applying to an employment tribunal. In the United Kingdom, ADR covers both the narrow definition of judicial ADR for third-party intervention and the broader definition of non-judicial ADR for encouraging the application of workplace procedures, as per the ACAS guidelines published in 2009. In some countries, the worker must try to solve the problem by using internal grievance and dispute procedures within his/her company and conciliation procedures before going to court.
In Hungary and Germany, conciliation is linked to legal proceedings. In Hungary, some labour court judges even use the first hearing to explore with the parties the possibility of a settlement and the ‘real’ hearing takes place only if it fails. In Germany, each case before the Labour Court begins with a conciliation hearing by the President acting alone. This approach aims to reach an amicable settlement, usually a compromise between the parties, before resorting to a formal hearing.
Mediation
Most mediations take a traditional form, where a third party hears from both parties and seeks to reach an acceptable solution before making a non-binding decision or recommendation. Mediation may be proposed or organized by the courts and/or operated outside the judicial system. Indeed, in the Netherlands, for example, mediation may take place before or during the hearing, referred to as court-annexed mediation. Mediators are private individuals who must only meet specific standards established by the Netherlands Mediation Institute (NMI). In the United Kingdom, recent developments encourage Employment Tribunal judges to offer a form of judicial mediation to bring the parties to a resolution of the dispute before a full court hearing. In practice, this can often correspond to an early neutral assessment, where the judge suggests what might be the results of a formal hearing to influence the views of the parties.
In Slovakia, mediation is established by law. Mediation legislation was adopted in 2004 to ease the burden on civil courts. The legislation regulates the execution of mediation, its basic principles and its organization, as well as the results. Mediation is voluntary and must be paid by the parties. Mediators must be adequately qualified and registered with the Ministry of Justice. Once the request is made, either by the employee or through the trade union, the employer and the employee are required, in a written statement, to confirm their willingness to mediate and must agree on the mediator’s name. At the end of the hearing, the mediator proposes a solution to the dispute. If the solution is accepted by both parties, then their agreement seals the solution and can be accepted as a non-judicial settlement by the courts.
In Portugal, mediation is set up by the social partners, including the government, which encourages recourse to ADR to reduce the burden on the courts, including the labour court. In 2006, a tripartite protocol was signed to create a Labour Mediation Service (SML). In order to have access to mediation, the employee or employer must submit a request to the SML, which must then contact the other party concerned and then appoint a mediator from a list of qualified persons on the SML list. While the SML pays the cost of mediation, each party is required to pay a fee of 50 euros. Mediators receive a fixed fee of 100 euros in the event of failure of the mediation, 120 euros in the event of success and 25 euros in the event of abandonment.
The mediation established by the social workers also includes works councils. In Germany, all employees have the right to have their grievances heard by the works council. In practice, in some cases where a works council exists, an employee may first approach the works council, which seeks to resolve the conflict with management, sometimes through informal mediation. Where no works council exists, the union seeks to reach an amicable agreement with the employer.
Arbitration
Arbitration is when a third party decides on an employee’s application. Arbitration is always used as a last resort; more attention is paid to implementing the early stages of conciliation and mediation. And often, even as a last resort, arbitration is not used. In Cyprus, for example, arbitration is the fourth and final step in a procedure established under the country’s Industrial Relations Code. The first two steps allow for a non-judicial ADR process in the workplace, first at the supervisor level and then, if not resolved, by higher authorities in the workplace. The third step, if necessary, allows the employee to file a request for mediation with the Ministry of Labour and Social Insurance (MLSI). If the dispute is unresolved at this stage, the complaint is referred to arbitration. The MLSI is responsible for appointing an arbitrator and providing administrative support to the arbitrator.
In some countries, recourse to arbitration depends on the decision of the parties involved in the conflict. In Spain, for example, it is up to the employee (or, with permission, the union) and the employer to choose mediation or arbitration. In Sweden, arbitration can be used rather than a full formal hearing if a case goes to the Labour Court – and most are not because of the success of the ADR’s non-judicial process.
In the United Kingdom, ACAS set up in 2001 a special arbitration system for dealing with complaints of unfair dismissal and flexible work as an alternative to applications to the Employment Tribunal. Although the procedure was designed to be informal, the decision of the arbitrators remains legally binding. However, this procedure is rarely used and receives fewer than ten applications per year. This may mean that arbitration remains too inflexible and does not allow for exploring new alternative solutions, contrary to what conciliation and mediation offer before the courts intervene.
Some countries with high ADR levels have low rates of judicial ADR – because the ADR process takes place early enough before the issue is brought before the labour or civil courts. So, for purpose of the PICO question, we compare applying Alternative Dispute Resolution mechanism (ADR) to discrimination with resolving discrimination claims in courts.
For parties to a discrimination dispute, is applying the Alternative Dispute Resolution mechanism (ADR) more effective than resolving discrimination claims in courts for conflict resolution?
The databases used are: HeinOnline, Westlaw, Wiley Online Library, JSTOR, Taylor & Francis, and ResearchGate.
For this PICO question, keywords used in the search strategy are: employment, labour, workplace, disputes, conflicts, discrimination, employee, employer, women, men, resolution, alternative, tribunal
The main sources of evidence used for this particular subject are:
ADR is a long-standing feature of Australian and British anti-discrimination legislation.
There is a ladder of ADR activities [3] from the workplace to the courts, as the following steps show:
In Australia, ADR was introduced in the 1970s by the Racial Discrimination Act in 1975. An employee discriminated against may apply in writing to the Australian Human Rights Commission (AHRC [4]). The application shall be referred to the Chairperson of the Commission. If it is well-founded and within the jurisdiction of the Commission, the Chairperson must consider the request and attempt to reconcile it. In practice, AHRC informs the person against whom the complaint was made that a request has been made against him or her and requests a response.
If the reaction alone does not resolve the problem then attempts are made to facilitate a settlement between the parties where the Commission resolves complaints through conciliation. The process is confidential, as are the terms of settlement. If the application cannot be resolved, the applicant can apply to federal courts. The application can then be referred to as assisted dispute resolution by the Federal Court. The court uses mediation conducted by a court clerk and an accredited mediator. The Court states that mediation is a routine way that facilitates quick, inexpensive and efficient resolution of disputes [5]. But the vast majority of discrimination complaints are resolved through the ADR (either by AHRC or the federal courts).
In the United Kingdom, the Advisory, Conciliation and Arbitration Service (ACAS) was established in 1974 to provide independent conciliation of labour disputes. ADR, particularly mediation, has been seen as an effective alternative to facilitate the early settlement of disputes. It is considered to complement the work of the employment tribunals (ET), which are independent judicial bodies intended to provide a less formalized framework, more efficient and less costly means to settle employment applications than judicial proceedings [6].
Therefore, The ETs were initially seen as an alternative form of employment dispute resolution. However, the courts found that they were too costly and complex with an excessive focus on procedure[7]. Thus, before submitting a claim to an ET for unlawful treatment (wrongful dismissal, discrimination or unjust withholding of remuneration), the applicant must inform ACAS of his/her intention to submit a claim to the court. ACAS then offers the claimant to settle the dispute without recourse to the courts, using it’s free rapid conciliation service. Before submitting a discrimination complaint to an ET, the worker is first invited to raise the issue informally with his or her line manager or to present a formal grievance to the employer. This is not mandatory before a claim before an ET claim, but it can help the parties resolve the dispute informally so that they no longer need to make a claim.
If the employee wants to make a claim to an ET, he/she must inform ACAS. At this stage, ACAS offers early conciliation which consists of talking about the dispute to both parties, the employee and the employer/claimant and respondent. It gives them the opportunity to come to an agreement without having to go to court. If early conciliation does not work, ACAS will send an early conciliation certificate, which is used by the employee at the time of their application to the court. ACAS conciliation is also possible after a complaint has been filed in court, until a judgment is rendered.
These statistics[8] suggest that early and post-application conciliation avoids the vast majority of applications to the court system; about 3% of notifications are subject to an SE determination. Few claims are, therefore, settled formally. Thus, overall, early reconciliation appears to reduce demands on the UK justice system.
This becomes problematic if the courts use the ADR solely as a case management technique to prevent too many claims from flooding an already overwhelmed court system. Attention is focused on finding a resolution rather than on the quality of the resolution; effectiveness is measured by the number of complaints resolved. As Dickens [9] argues, the pressure for ADR as an alternative to the court system has focused primarily on reducing claims to ETs and minimizing the cost of dispute resolution. Thus, the success of the ADR is measured by the number of claims diverted from the justice system. This design of the ADR and its success undermines, in practice, the potential use of this process to bring justice to workers in effective labor rights and to ensure fairness in the workplace.
One of the things about the ADR is that it’s a much faster way to get a result than litigation. This is indeed the case for complaints of discrimination. AHRC stated its goal was to finalize 80% of complaints within 12 months of receipt. In 2014-15, 99% of complaints were resolved within 12 months and the average time between filing and finalization was approximately 3.7 months. In contrast, the most recent Australian Superior Court decision on employment discrimination took 11 years to resolve between the time the complaint was filed with the statutory equal opportunity agency and the time it was heard by the High Court [10].
The ACAS applicants spent an average of 27 hours in the dispute and the median time was 6 hours. These figures should be read in the light of those observed on requests made to ETs: an average of 30 days was recorded for requests made to ETs and a median of six days. For respondents, the average time spent on conciliation issues was 15 hours, with a median of 5 hours, compared to an average of 13 working days and a median of 5 working days for ET requests [11]. Thus, conciliation can take less time than litigation and resolve cases more quickly.
The time and cost of litigation are significant factors in resolving disputes before the courts. There is no cost to use ADR unless the claimant wishes to use counsel. Many claimants prefer and even feel it necessary to seek advice or assistance in the ADR/conciliation process [12]. Despite this, the ADR will not cost as much as the litigation, even for claimants who use legal counsel. This is because the cost of representing the applicant in the ADR will be much less than for a hearing, given the shorter time typically spent on non-judicial processes.
The confidentiality of the ADR process itself and its results is both an advantage and a disadvantage of this process. Because the process and outcomes are confidential, it is difficult to assess whether the discrimination law is achieving its purpose, both by addressing the individual situation and by achieving broader objectives. In other words, achieving systemic outcomes is the ability of ADR to influence legal standards and their development [13].
Confidentiality also masks the extent to which discrimination remains a problem in society. Because discrimination is considered private and should be dealt with in private, very few cases are brought before the courts, which seriously hampers the role and educational function of the discrimination law. This reduces the dissemination of best practices, usually from public hearings, and thus, the ability to combat structural or systemic discrimination. Sexual harassment complaints were the most common types of claims resolved through a systemic remedy. However, this was usually training or an obligation for the employer to review its policies and practices.
Conciliation to resolve complaints of sexual harassment also reinforces gender-related power imbalances and can lead to uneven outcomes if the conciliator does not address them properly [14]. Disparities in power can indeed be exploited in the context of reconciliation to obtain less desirable results for complainants: employers have a power derived from structural ideologies that support their power (and their access to information, documents and witnesses) and the applicant’s attributes may also contribute to power imbalances, including gender, sexual orientation, race, age, language skills and disability [15].
Thornton [16] cites the example of a claimant for discrimination based on pregnancy, who first claimed 1,000 dollars in compensation (the equivalent of two months’ salary) but accepted a letter of apology for settlement. Thus, for Dickens [17], there seems to be a conflict between the search for a compromise, which is at the heart of conciliation and the pursuit of rights: conciliation risks transforming injustice into a simple form of disagreement between private parties, and may aggravate illegal behaviour.
While there are still strong reasons to support the use of the ADR to resolve workplace discrimination complaints rather than the courts, litigation outcomes also remain critical to establishing case law. The absence of case law may compromise the potential of the discrimination law to effect social change. In other words, if the facts of a case are new or raise questions that would call into question accepted legal principles, it will not be tested and the law will not be affected. Therefore, the lack of case law is a problem for potential applicants and their advisors because they have no guidance on how the tribunal will interpret certain aspects of the law.
A lack of case law also poses challenges for employers and their advisors, who may not know what compliance is. This could discourage both parties from taking their case to court for fear of losing it. Clarke and Davies argue that allegations of discrimination are an area where mediation may not be appropriate because “without public scrutiny and awareness, there will be no attempt to reform…entrenched discrimination [18].” Thus, community interests in the fight against discrimination may outweigh individual interests in the regulation [19].
Quality of evidence and research gap
According to our research method, we grade the evidence comparing applying the Alternative Dispute Resolution (ADR) mechanism with resolving discrimination claims in courts for an employment discrimination dispute resolution, as moderate. Most sources are high quality and consist of recent medium/large-sized empirical research that contains quantitative and qualitative evidence on employment discrimination disputes in European countries, mainly.
Applying the Alternative Dispute Resolution mechanism (ADR) according to the ladder of ADR | Resolving discrimination claims in courts |
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ADR is less expensive than going to court. It costs the parties nothing to go to ADR and legal representation is not required during this process.
ADR is much faster than going to court. This is particularly important in employment disputes because relationships can be preserved if issues are dealt with quickly. | Litigation before the courts is essential to law enforcement1 and is part of this framework. So sometimes it is necessary to move away from the current use of the ADR and remove barriers to claims before the courts to establish jurisprudence [23].
|
Lack of formality makes ADR less stressful and adversarial than litigation. Parties do not need to give evidence or be cross-examined and they control the process and not a judge [20].
In cases of discrimination, ADR is a confidential process that allows the parties to negotiate freely, knowing that what is said cannot be used by the other party or later, if the case goes to court. This creates a safe space for parties to express their emotions and communicate their true interests, which could be lost at a court hearing [21]. | Allegations of discrimination before the courts allow the law to play its educational role and address structural or systemic discrimination [24]2. It allows discrimination case law to raise new issues that will be tested, impact the development of discrimination law, and let the community know that discrimination still exists, in whatever form, frequency, or how it is treated. |
ADR is more flexible in terms of both the process used and the negotiated outcome, allowing it to be adapted to the individual situation of the parties involved [22].
|
Applying the Alternative Dispute Resolution mechanism (ADR) according to the ladder of ADR | Resolving discrimination claims in courts |
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ADR can reinforce the power imbalance between the employee and the employer [25]. The process has been designed to mitigate any power imbalance between the parties through the intervention of a third party, a facilitator who is supposed to ensure that the process is fair. But ADR facilitators are still not competent or trained on certain issues and may not have the capacity to moderate or improve the balance of power. Power imbalances in the ADR will be even more apparent if the employer appoints a lawyer who engages in adversarial behavior and particularly if the employee is unrepresented [26].
| Litigation is more expensive than the ADR process. The claimant has to consider the costs associated with filing fees, expert witnesses, legal fees, and possibly the costs of the other party.
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In addition, some vulnerable claimants may be confused or intimidated by the presence of an impartial conciliator, which may lead to a sense of helplessness or a sense of bias towards the employer. This feeling may be exacerbated by the increased use of ADR over the telephone where ADR facilitators have less opportunity to communicate with the parties in a meaningful way, an ADR that results in a switch where non-verbal cues are missed or eliminated.
| Litigation is longer than ADR process. It can be a long, drawn-out process. There is usually a time lag between when the case is filed and heard by the court. During this process, the employment relationship is rarely preserved [28].
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Moreover, the fact that disputes are resolved in a context separate from the workplace means that there is a limited broader impact on the organization concerned.
| The formality of court means it is a more adversarial process than ADR. The focus is more on winning than on negotiating an acceptable outcome, so relationships can remain intact.
|
ADR does not allow the development of the law because it deprives the court of the opportunity to interpret it [27]. While difficult cases are more subject to arbitration than negotiation, they can be dealt with incidentally. This reduces the impact of the ADR on interest litigation aimed at eliminating discrimination through systemic remedies and advocating for systemic change and law reform. So the resolution of claims by ADR denies the law an educational role, as claims are not public and regulations are confidential. This may mean that applicants are not informed of what is illegal and the associated penalties. |
Taken together, the available research suggests that applying the Alternative Dispute Resolution (ADR) is a less expensive and much faster and flexible process than going to court. Above all, ADR allows confidentiality of the claim nature and the settlement process and outcome, creating a safe space for parties. Moreover, ADR mechanism can be applicable to other employment disputes cases. For example, for unfair dismissals. Besides, the first step of ADR ladder was the subject of a previous recommandation related to unfair dismissal – about the application of grievances procedures, but this does not imply any redundancy with this intervention. On the contrary, it is just one step among others that was worth developing as a first informal and internal process to resolve dismissal (and thus discrimination) disputes.
However, it has been shown that ADR, as an informal process helped by a third party to resolve an employment conflict on discrimination, has a limited impact on the organization concerned. This is because the dispute resolution takes place outside the workplace and often by phone, which could also be confusing for parties or intimidating, given the presence of a facilitator. In addition, facilitators are not well prepared or trained to deal with all employment disputes issues, especially discrimination. So, if facilitators are not competent, he/she would not be able to address the power imbalances that the ADR process is supposed to do. On the contrary, in this situation, ADR will reinforce the power imbalance, especially those based on gender.
Discrimination claims are seen as individual/private issues. So, it has been shown that ADR denies the educational role of the law and its role in the development of the law for systemic remedies and changes. So, this makes litigation essential for law enforcement and development. The more case law there is, the more the law is tested, developed, and reformed to fight against discrimination. However, it was also found that litigation is a longer and more expensive process for the claimant than ADR process. In addition, the formality of the court means it is a more adversarial process than the ADR process, that is to say, that the focus is more on winning but not on negotiating an acceptable outcome, so relationships cannot remain intact.
Therefore, applying the Alternative Dispute Resolution (ADR) mechanism is preferred.
Taking into account the balance of outcomes, the benefits for parties to employment discrimination dispute and the quality and consistency of the evidence, we make the following recommendation: applying the Alternative Dispute Resolution (ADR) mechanism.
[1] Acas | Making working life better for everyone in Britain
[2] Home | U.S. Equal Employment Opportunity Commission (eeoc.gov)
[3] European foundation for the improvement of living and working conditions, “Individual disputes at the workplace: alternative disputes resolution”, 2010.
[4] It is an independent statutory organization, established by an act of Federal Parliament that protect and promote human rights in Australia and internationally (About | Australian Human Rights Commission); it was established under Australian Human Rights Commission Act in 1986: The Australian Human Rights Commission Act articulates the Australian Human Rights Commission role and responsibilities. (Australian Human Rights Commission Act 1986 (legislation.gov.au)).
[5] Federal Court of Australia, Annual Report 2014–2015, Federal Court of Australia, 2015, at 31.
[6] ACAS, Employment Tribunals, at Making a claim to an employment tribunal – ACAS.
[7] M Gibbons, Better Dispute Resolution: A Review of Employment Dispute Resolution in Great Britain, Department of Trade and Industry, 2007, at 8.
[8] Acas, Early Conciliation Update 7: April 2015 – March 2016, Acas, 23 May 2016, at (accessed 11 September 2017), at 7: http://www.acas.org.uk/index.aspx?articleid=5741>
[9] Dickens, Op.cit
[10] New South Wales v Amery (2006) 230 CLR 174; 226 ALR 196; [2006] HCA 14.
[11] New South Wales v Amery (2006) 230 CLR 174; 226 ALR 196; [2006] HCA 14.
[12] Australian Human Rights Commission, ‘Annual Report 2014-2015’, above n 49, at 137.
[13] Owen Fiss, “Against Settlement” (1984) 93 Yale LJ 1073.
[14] J Davis and A Markman, Behind Closed Doors: Approaches to Resolving Complaints of Sexual Harassment in Employment, Australian Human Rights Commission, 2004, at Behind closed doors: Approaches to resolving complaints of sexual harassment in employment | Australian Human Rights Commission.
[15] M Thornton, ‘Equivocations of Conciliation: The Resolution of Discrimination Complaints in Australia’ (1989) 52 MLR 733.
[16] Thornton, Op.cit.
[17] L Dickens, ‘Employment Tribunals and Alternative Dispute Resolution’ in L Dickens (Ed), Making Employment Rights Effective: Issues of Enforcement and Compliance, Hart Publishing, Oxford, 2012.
[18] G R Clarke and I T Davies, ‘Mediation — When Is It Not an Appropriate Dispute Resolution Process?’ (1992) 3 ADRJ 70.
[19] G R Clarke and I T Davies, Op.Cit.
[20] D Allen, ‘Behind the Conciliation Doors: Settling Discrimination Complaints in Victoria’ (2009) 18 GLR 778 at 786.
[21] G R Clarke and I T Davies, ‘Mediation — When Is It Not an Appropriate Dispute Resolution Process?’ (1992) 3 ADRJ 70 at 74.
[22] ACAS (2008). Why use ADR- Pros and cons. URL: https://asauk.org.uk/wp-content/uploads/2013/08/Why-use-ADR.pdf
[23] European foundation for the improvement of living and working conditions, “Individual disputes at the workplace: alternative disputes resolution”, 2010.
[24] European foundation for the improvement of living and working conditions, “Individual disputes at the workplace: alternative disputes resolution”, 2010.
[25] ACAS (2008). Why use ADR- Pros and cons. URL: https://asauk.org.uk/wp-content/uploads/2013/08/Why-use-ADR.pdf
[26] D Allen, ‘Against Settlement? Owen Fiss, ADR and Australian Discrimination Law’ (2009) 10 IJDL 191 at 199–200.
[27] A Ardagh and G Cumes, “Lawyers and Mediation: Beyond the Adversarial System?” (1998) 9 ADRJ 72 at 73.
[28] Dickens, Op.cit.
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