ADR, Employment & Labour, Mediation

A new twist on resolving employment disputes

By Staff

Using an expedited process of mediation and arbitration is trimming time and money from the typically drawn-out process of settling disputes between employers and fired employees, says Toronto mediator and employment lawyer Peter Israel.

“I have been experimenting with a new wrinkle in an established process,” says Israel, founding principal of PI Mediation, which specializes in mediating and arbitrating employment law disputes.

Mediation-arbitration has been used for years in labour and commercial cases to reduce the costs and stress of litigation. If mediation fails, arrangements are made for an arbitration hearing at which documents will be produced, witness testimony heard and legal arguments made.

But for a year and a half, Israel has been trying out a quicker, cheaper method.

“I do it all together. The parties give me jurisdiction to immediately conduct an arbitration if the mediation fails,” he tells “They give me the ability and the right to make a decision based on what I have heard in the mediation.”

In employment cases, mediation is mandatory, Israel points out.

“The whole reason is to get the parties there more quickly, to get closure. So to add to that process listening to witnesses, via testimony, legal arguments and presentation of exhibits simply extends the process and makes it far more expensive. In the vast majority of cases, it really is unnecessary.”

Mindful of the risk that one of the parties may have better optics, a better spin on the issue in dispute or a stronger advocate, Israel does insist on receiving a full affidavit of documents relevant to his cases.

“The risk is that as a mediator I get seduced by their oratorical skills or by their presentation, so it's important for me to review the affidavits. That makes it far easier for me because in the vast majority of cases there are no issues of credibility — only issues of law and facts.

"So you can make the decision based on the mediation and on the documents they present as part of their case,” he says.

Israel says this approach has brought his success rate in resolving employment disputes from the low nineties to 100 per cent.

And the benefit in time-saving is huge, he says, because it removes the temptation of defendants to delay starting the mediation process.

“Many defendants hesitate to go to mediation early because there’s an obligation on the plaintiffs to try to mitigate their damage — so defendants want to wait for a while, because if the person gets another job that reduces the obligation of the defendant to pay.”

In employment law, the court's aim is to protect the fired employee by putting them in the same position as if the employer had given them reasonable notice of termination, Israel says. If that notice period is two years and the firing was only three months ago, defendants don’t want to be on the hook for almost two years’ salary, he adds.

“Obviously defendants don’t want nor are they required to make gifts to people they have fired,” Israel says.

“The great benefit of doing it my way is that by getting the jurisdiction of an arbitrator I can make an award that places a trust on any mitigation income so that there’s a reconciliation at the end of the reasonable notice period. It takes away one of the major reasons that defendants don’t hurry to mediate."

In determining an award as an arbitrator, Israel can make findings of defamation or bad-faith discharge, or award punitive damages or human-rights damages, which helps shelter payments from taxation and employment insurance. He can also award costs.

“So it’s a huge tool because as an arbitrator I have all sorts of rights that I don’t have as a mediator. I can actually say sincerely that I haven’t predetermined things or prejudged, but if we go to arbitration you may have a very difficult time to establish this or that,” he says.

“And that would require testimony from your financial staff — accountants and other witnesses — thus delaying the process and making it very cost-prohibitive. In the majority of cases in that situation, the parties end up agreeing to a consent order, so that you don’t actually have to go through the arbitration process.”

Israel says “panacea” is too strong a word for his method, but it’s “a wonderful, tool that results in far better and more cost-effective outcomes all around.”

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