Companies with an enterprise agreement in place will have a dispute resolution process within the agreement, as required by the Fair Work Act.

Such a dispute resolution clause will:

• set out a procedure that requires or allows either the Fair Work Commission or some other independent person to settle the dispute;
• allow for the representation of employees covered by the agreement when there is a dispute (for example by another employee or a union).

If there is no enterprise agreement in place but workers in the business are covered under the modern awards system mandated by the Fair Work Act, employers need to be aware that all modern awards include a term which sets out a procedure for resolving disputes between employers and employees about any matter arising under the modern award and the National Employment Standards (NES).

This will provide for a process with stages which usually include:

• employee/s meet with their direct supervisor to discuss the grievance;
• failing resolution, the matter is discussed further with more senior management;
• failing resolution of the matter, the employer refers the dispute to a more senior level of management or more senior national officer within the organisation;
• where the dispute remains unresolved, the parties may jointly or individually refer the matter to the Fair Work Commission;
• the employer and/or employee may appoint another person, organisation or association to represent them during this process.

Where a workplace is not covered by either an enterprise agreement or the modern award system, a ‘best practice’ approach to addressing grievances is strongly advised.  This would include detailing a dispute resolution clause, detailed in employees’ contracts of employment or in company policy documents.

Some key principles of dispute resolution should characterise any company policy dealing with grievances and their resolution. These include:

• that issues be resolved quickly, preventing escalation through inaction;
• that negotiation and conciliation is fair, with all relevant parties consulted so that all sides of the story are taken into account, and that all parties are free from victimisation;
• that issues are handled sensitively, with the details treated in a confidential manner in order to minimise impact on employees not affected by the dispute; and
• that the resolution process is transparent, with the procedure or process made known to every employee.

The Fair Work Commission only deals with disputes if an application has been made to the Commission by one of the parties to the dispute, and the parties to the dispute have progressed through the required preliminary steps under the enterprise agreement or award.

If a dispute resolution clause in an award, an enterprise agreement, a contract of employment or other written agreement refers a dispute to the Fair Work Commission it may:

• depending on the terms of the clause, settle a dispute via mediation, conciliation, or by making a recommendation or expressing an opinion, except in the circumstances where the parties have agreed to limit the powers of the Fair Work Commission; and/or
• where agreed by the parties deal with the matter by arbitration and make a binding decision regarding the dispute.

Employers should be aware that the Commission cannot deal with a dispute if it is about whether an employer had reasonable business grounds to refuse a request by an employee for flexible working arrangements, or an extension of unpaid parental leave beyond 12 months.

How the mediation process works
If it is decided to try and resolve the dispute through utilising a mediator, you should understand that the mediator is there to manage the process of conflict resolution, and not to evaluate or determine the dispute. An effective mediator creates the structure within which the parties to the dispute can self-determine a resolution.

Preferably mediation will be conducted offsite to provide privacy for all parties and reinforce the independence of the process. It’s also important that all parties are aware at the outset how the mediator proposes to conduct the mediation and that this is approved by the parties. If a resolution is achieved at the conclusion of the mediation process, the terms of such an agreement should be put in writing and signed by all the parties to the mediation.

At every stage from the airing of the grievance through to mediation and resolution, it’s important that proper procedures are followed to minimise the possibility of more costly legal action at a later date.