In this article, we’ll dive into a compelling case study that illustrates how mediation can create a psychologically safe environment and lead to successful outcomes for all parties involved. Please note that the names of the people and the company in this case study have been changed to maintain confidentiality.
Mediation is more than just a conflict resolution tool. It’s a strategic approach that can yield significant benefits:
These outcomes are relevant in situations involving employee exits, where emotions can run high, and misunderstandings may arise.
Vicky had been a dedicated developer at Bank Delta for over ten years. She joined the company in 2014 and quickly became known as a high performer within her team of five developers. Bank Delta is a large organisation with around 1,000 employees spread across Australia.
In 2022, during tough economic times, Bank Delta decided to restructure Vicky's department from four employees down to one. This decision aimed to cut costs while relying on high-performing individuals like Vicky to maintain productivity. However, this restructuring placed immense pressure on her. The increased workload and lack of support began to take a toll on Vicky's mental and physical health.
This situation is not unique, with data from industry and government organisations highlighting the significant risks associated with poor management of psychosocial hazards.
“Poor organisational change management can lead to psychological injuries, other adverse health outcomes, and reduced productivity. ”
Model Code of Practice: Managing psychosocial hazards at work (Safe Work Australia)
Comcare has referred to Safe Work Australia’s Model Code of Practice: Managing psychosocial hazards at work stating that poor organisational change management can lead to psychological injuries, other adverse health outcomes, and reduced productivity.
Despite her stellar performance, Vicky found herself drowning in an overwhelming workload. She requested to be included in the redundancy list, but her request was denied due to her perceived value as an indispensable employee.
These are the factors that contributed to Vicky’s dilemma:
According to SafeWork Australia, high job demands become psychological hazards when they are severe, prolonged, or frequent—exactly what Vicky was experiencing.
After six months of working overtime without adequate support, Vicky realised she could no longer cope with her workload. Despite reaching out for help multiple times, her requests were ignored. This neglect triggered psychological hazards such as stress and burnout.
Data from Mental Health First Aid Australia reveals that 61% of Australian workers report experiencing burnout—significantly higher than the global average of 48%. Furthermore, WorkSafe ACT data shows that mental stress accounts for 8% of serious claims leading to extended absences from work.
Mental stress accounts for 8% of serious claims leading to extended absences from work.
Source: WorkSafe ACT
After six months of treatment and discussions with health and safety representatives, mediation was proposed as a way forward. Mediation involves an independent mediator who facilitates discussions between parties while maintaining confidentiality and neutrality.
The Australian Mediation Association reports that mediation successfully resolves over 85% of initiated disputes. With this statistic in mind, Vicky and Sally (HR Business Partner) agreed to participate in mediation to facilitate Vicky’s return to work as soon as possible.
Trust is the name of the game in mediation; it gives employees like Vicky the comfort to air their concerns without holding back. According to Ernst & Young, trust is the only currency that will convince employees to return to work feeling secure.
During mediation:
The final option involved discussing a severance package confidentially. Sally approached this with empathy and respect, considering Vicky’s wellbeing and future career prospects.
The mediation concluded with an agreement that included:
This approach not only supported Vicky's transition but also safeguarded Bank Delta from potential litigation related to psychological harm.
Non-disclosure agreements are crucial in maintaining confidentiality during sensitive transitions. As Thomson Reuters Legal points out, NDAs help maintain comfort and trust between parties involved in any agreement.
Both parties left the mediation session feeling satisfied with the outcome. Vicky received:
On the other hand, Sally successfully facilitated an exit with dignity while protecting the organisation’s brand through a release agreement.
Mediation serves as a helpful tool for organisations facing employee disputes or exits. By prioritising psychosocial safety and open communication, organisations can mitigate risks associated with workplace conflicts while supporting their employees' wellbeing throughout challenging transitions.
“Mediation statistically settles over 85% of initiated disputes.”
Australian Mediation Association
According to the Australian Mediation Association, “Mediation statistically settles over 85% of initiated disputes.” This success rate shows the effectiveness of mediation in resolving conflicts and enhancing workplace harmony.
To wrap it up, adding mediation to your conflict resolution strategy plays a key role in creating a positive workplace environment and supporting the integrity of your organisation. By choosing this approach, you can facilitate smoother transitions that consider both employee needs and organisational objectives.
This article was written by Bruno Zadeh, an Accredited Mediator of the Australian Mediator and Dispute Resolution Accreditation System (AMDRAS) at PeopleSense by Altius.
If you would like to know more about mediation solutions, please submit your inquiry here. Our Accredited AMDRAS experts will contact you.