Toronto Employment and Labour Law Blog: Mediation and Arbitration of Employment Disputes

The combatants in the adversarial system are unequal in resources and time available to pursue their rights. If an employee is terminated for justifiable cause, she is without any severance payment at all and must find the money to sue the corporation or find a law firm that believes in her case and will accept it on a contingency basis. Otherwise, she may be without a remedy. Even those employees terminated without cause may find that, although they may receive a modest amount of severance, they must sue for the balance owing. Frequently, they receive no severance payment until they sign a release in favour of their employer, something they normally would not do until fully satisfied that the severance proposal is a fair one.

In response, during the past decade, an alternative process has emerged aimed at encouraging dispute resolution outside the traditional courtroom. Mediation and arbitration of employment disputes have grown enormously so that the majority of these cases move quickly to a process that summarily resolves the dispute through mutual agreement (mediation) or by way of arbitration when a mutually selected arbitrator makes the final ruling. By streaming employment disputes away from the courts, the playing field between the parties becomes more level and early, mutually acceptable resolution more likely. Mediation and arbitration processes are open and not restricted by the positioning of the parties nor limited by the rules of evidence and thus offer more scope for full explanations at an early stage. Ultimately, they lead to more equitable resolutions made more palatable by the parties’ direct participation in the negotiations.

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