Mediation clauses in employment contracts: A path to peaceful conflict resolution

• Corporate, Company Law
• Employment Law
• Litigation/Mediation
• Private Clients
• SME

Conflicts are unavoidable in the world of work. Disagreements between employers and employees or between different employees can arise for a variety of reasons – be it due to misunderstandings, communication problems or differing expectations. In Switzerland, more and more companies are using mediation clauses in employment contracts to resolve such conflicts efficiently and peacefully. But what exactly is behind a mediation clause and what advantages does it offer?

What is a mediation clause?

A mediation clause is a contractual agreement that provides for conflicts between the contracting parties to be resolved through mediation before legal action can be taken. Mediation is a voluntary, out-of-court procedure in which a neutral third party, the mediator, assists the parties in finding an amicable solution. In contrast to court proceedings or arbitration, the mediator does not make any decisions but helps the parties to work out a solution themselves.

Advantages of a mediation clause

• Cost efficiency: Court proceedings can be lengthy and expensive, depending on the circumstances. Mediation is usually faster and more cost-effective as it can be finalised in just a few sessions.
• Confidentiality: Mediation is confidential, which means that the details of the conflict are not made public. This protects the reputation of both parties and allows them to speak openly and honestly about their concerns.
• Preserving the working relationship: A court case can permanently damage or even destroy the employment relationship. Mediation, on the other hand, aims to find a solution that is acceptable to both sides and to preserve or even strengthen the relationship between employer and employee.
• Self-determination: In mediation, the parties themselves decide on the outcome, which often leads to more sustainable and satisfactory solutions than a court-imposed decision.

The legal status of mediation

In Switzerland, there is no legal obligation to include a mediation clause in employment contracts. Nevertheless, more and more companies are recognising the advantages of such a clause and integrating it into their contracts. The clause should be clearly formulated and regulate both the process and the consequences if one party refuses to participate in mediation.

It is important to emphasise that mediation does not restrict access to the courts. If mediation fails or one party does not honour the agreements, the path to court proceedings remains open.

Conclusion

A mediation clause in employment contracts can be a valuable tool for resolving labour disputes efficiently, cost-effectively and in the best interests of both parties. Companies that use this method not only signal their willingness to co-operate and resolve conflicts, but also contribute to a positive working atmosphere. Employees, in turn, benefit from a process that protects their rights while respecting their working relationship. At a time when labour markets are becoming increasingly dynamic, mediation can be a key to stable and fair working relationships.