Conflict of interests

Many businesses spend substantial time dealing with grievances, disciplinary processes and dismissals, only then to spend often more time and money on settlement agreements. They do so because this seems a better alternative to engaging in litigation, incurring further financial expense, as well as a risk of reputational damage.

Many businesses spend substantial time dealing with grievances, disciplinary processes and dismissals, only then to spend often more time and money on settlement agreements. They do so because this seems a better alternative to engaging in litigation, incurring further financial expense, as well as a risk of reputational damage. In fact, fighting some carefully chosen cases can send a powerful message that contrived nuisance claims will not be tolerated.

The “follow the process and then settle” approach reveals a misunderstanding as to what the alternatives really are to the expense and reputational risk of litigation. The real alternative in many cases is not simply to avoid litigation or to rely on formal processes to assess who is to blame for alleged misconduct or grievances. The better route may often be to resolve the conflict that leads to problems before it escalates. There is nothing new in this idea and certainly the idea itself is not profound. However, the problem is that most businesses stop listening beyond this mantra and very few are prepared to invest anything like the time and resource into conflict resolution methods that they are in following the “process and settlement” approach. Conflict can be resolved by early intervention, but what does this really involve? It involves having properly trained management and staff, who are able to identify likely triggers for and the early signs of workplace conflict and who are also equipped to intervene effectively and appropriately. But a commitment to conflict resolution also requires that businesses put in place the supporting mechanisms to maximize the effectiveness of such early intervention methods. This will usually mean having in place a neutral, confidential and accessible workplace mediation scheme, with skilled internal or external mediators able to deal with matters considered suitable for this more formal step.

This will all require a commitment of financial resource and that the senior leadership of the business as well as HR, buy into the concept and the value of such an approach in order to drive the development of the necessary training and processes, as well as selling the concept internally in order to maximize its utilisation. When done properly, this approach is not an avoidance strategy, it is designed to be transformational; therefore, it is not designed simply to avoid workplace conflict or its escalation, it is designed to both resolve an existing conflict as early as possible and repair broken or damaged working relationships. However, it also seeks to effect a change in the culture of a workplace in ways that help and encourage preventing conflict escalating and resolving it when escalation does occur. So, how can this cultural shift be effected? It involves training managers and other employees to identify some of the common causes of conflict in the workplace, such as organisational change, competition for recognition, promotion or reward, underperformance and the pressures this puts on employees who are performing.

This does not just mean knowing the situations where conflict is most likely to arise but also to understand why they cause conflict in the workplace and how these causes will typically manifest themselves i.e. how employees commonly view and react to these perceived threats. It also involves equipping managers with the skills to recognise the early signs of workplace conflict and to respond appropriately. This involves fostering the confidence to confront situations that are often simply avoided by managers, as well as the confidence to be able to help employees involved or at risk of becoming involved in workplace conflict to take steps to resolve it. Management confidence and willingness to confront and deal with, rather than avoid workplace conflict is a significant shift in most workplaces. Workplace mediation schemes depend for their success on the nature and advantages of the process being widely understood by the workforce, as well as the management group selling them. Apart from anything else this is because the process must be an entirely voluntary one. The participants must really want or at least be willing to have a go at this alternative way of dealing with situations that would otherwise result in grievances and disciplinary processes. Management commitment will help but ultimately it is the effectiveness of workplace mediation and other conflict resolution schemes that will make the difference to employee engagement. Mediation can be highly effective, once its effectiveness is understood within a business, it is likely soon to receive buy-in from senior management groups, especially when they see that the savings in time and cost go straight to the bottom line. Once its effectiveness is understood by employees, they will be much more willing to participate in an alternative to the traditional more formal and adversarial processes.

In the end, the effectiveness of resolving workplace conflict through the application of management skills and workplace mediation is limited only by the commitment of a business to deploy the time and resources and training needed to shift an organisation’s culture to embrace this approach. Some clients considering implementing a workplace mediation or similar programme express an initial concern that focus on resolving conflicts is to shut the stable door after the horse has bolted. Why not focus instead on avoiding conflict? First, in the real world conflict cannot be avoided. This is because the causes of conflict will always be present. Businesses are in a state of almost constant change, or at least they should be, and change is one of the most common causes of conflict. This is because there will always be those who see change as a threat (and for some it may be a threat) and this in turn leads to behaviours likely to lead employees into positions of conflict. Furthermore, there will always be those in the workplace who feel threatened by new hires, by others’ promotions, by unfamiliar or different management styles. None of these things can be eliminated. Furthermore, in any event, many of the causes of conflict are positive, encouraging drive, better performance and leading positive change within a business. Indeed, some degree of conflict can be positive, leading to debate and the generation and exchange of innovative ideas, many of the key elements for the effective running of an adaptable business containing motivated, clever, capable, hard-working and ambitious people.

The point here is that businesses need to approach the causes of workplace conflict in the same way that they do other positive influences on a business, which contain potential pitfalls – apply and exploit the positives and manage the risks. That is what good lawyers seek to help their clients with when they do their jobs properly; they help manage the risk of events or actions that are commercially necessary or desirable but carry a risk of conflict (re-organisations, acquisitions, redundancies, performance management processes etc). Therefore, if the risk of conflict cannot, and indeed should not, be avoided, the next best thing is to put in place a system that resolves those conflicts quickly and at an early stage. Even better is a system which not only resolves the conflict but enables the parties to that conflict to continue to work effectively together. Most lawyers will tell you that the clients whose businesses are affected least and suffer least because of potential risks, are not those who are not the most cautious and take the fewest risks, they are the ones who manage risk effectively. In the context of workplace conflict, this means recognising when and where the risks of conflict arise, understanding the nature and cause of that risk and then stepping in quickly to resolve the conflict.

The risks arising from conflicts are managed by having an effective and properly resourced conflict resolution system in place. These clients are the ones which have fewer grievances, fewer claims and fewer settlement agreements than others. Does this mean that this type of system is “better”? In one sense, not necessarily, as this depends on the priorities of the business. Some businesses prefer to manage risk at the “back end” by refusing to allocate time and resource to resolving conflicts, taking a robust approach to terminating those who are the cause and letting those employees sue or settling with them. Others prefer to manage at the ”front end” by investing time and money up front to avoid the need to pay off disgruntled employees and to create a more harmonious working culture. So, businesses can choose one approach or the other – or something between the two – but the effects on workplace culture, management time and ultimately the bottom line can be real. The irony here is that it isn’t as though the traditional “process and settlement” approach is particular popular with anyone involved.

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6 December 2023


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