Conciliation Agreement Definition
Conciliation agreements are legally binding agreements made between the HSE (or other enforcing authorities) and a business or individual. They establish a consensus that is arrived at through conciliation, in which inspectors apply their specialist knowledge and authoritative understanding of the law in an effort to reach a mutually acceptable agreement – one that leads to a successful resolution of the matter and promotes a sense of ownership of the issue, so that it is less likely to arise again.
The purpose of conciliation is to settle an investigation or some other legal action (such as a criminal prosecution), by obtaining a legally binding assurance from the duty holder that the offence will be remedied and that it will not happen again. They provide a means of achieving swift compliance with the law.
Conciliation agreements have the status of a court order and so can be enforced by the enforcing authority, or by another enforcing authority which has been involved in the case . Because they are binding, they cannot be varied at a later date without the other party’s consent.
Under the HSE (and Environmental Agency) Enforcement Policy, conciliation will only be considered where regulated entities, individuals and enforcing authorities have exhausted all reasonable methods of resolving differences and in the absence of evidence of serious or wilful breaches. In other words, the use of conciliation must be rare and very much the exception rather than the rule. In particular, special factors which may cause the HSE to consider conciliation would include instances where the business under investigation is accused of an offence that would not normally be prosecuted, where the breach is trivial or minor in nature, or because there may be little or no public benefit in pursuing the case further. It is a voluntary process and can be declined by any party if it considers it is not appropriate to choose conciliation in the circumstances.
Conciliation Agreement Key Features
A conciliation agreement is a legally binding contract that can take various forms for settlement. It is a vehicle for promoting amicable resolution of disputes through the voluntary, supervised application of the conciliation process.
A well-drafted conciliation agreement will typically contain:
Any one or more of these elements may be relevant to a particular case, with the exact formulation of a conciliation agreement being a highly flexible exercise.
The obligations undertaken in a conciliation agreement should be clearly expressed to make them enforceable. A conciliation agreement may provide for the enforcement of an arbitration award in the substantive terms of the agreement. Enforcement can, however, prove problematic if the scope of any obligations is not well-understood or is subject to interpretation.
Conciliation agreements can salvage what would be a costly and time-consuming escalatory process with the filing of a mediation statement soon followed by recourse to arbitration in the teeth of a business breakdown after the parties have embarked on the journey of amicable resolution.
Conciliation Agreement Process
The process of reaching a conciliation agreement varies depending on the parties’ needs and circumstances. However, the process generally follows a basic sequence. First, the conciliator may meet separately with the parties to clarify the issues at hand. The conciliator will then normally bring the parties together and direct the discussion of each party’s problems and desired outcomes. The conciliator will then facilitate discussion of various solutions to the presented problems and how each solution would help the parties meet their needs. The conciliator will then help the parties analyze each solution and identify potential negative consequences. As the parties discuss their priorities and values, the conciliator clarifies their proposed solutions and helps to separate the emotional issues from the long-term economic effects and practical problems. Once the parties and conciliator have worked together to brainstorm solutions, they will evaluate and rank these solutions according to the resolution of the most difficult and personally important unresolved problems as well as the ease of implementation. The ultimate goal is to leave the parties in control of their situation so that they can reach a solution. A Conciliation Agreement generally is a written document listing the terms of the agreement between the parties. This agreement may be referred to a court for approval and, once approved by the court, it is enforceable as any other court order.
Conciliation vs. Litigation: The Pros and Cons
A conciliation agreement is a fair and logical approach in dealing with employment issues that arise in a business. From an employer’s perspective, it is generally a good idea to choose a conciliation agreement as opposed to litigation for a number of reasons. First, the approach is cost efficient. For example, if there is a dispute between a supervisor and its subordinate, an employer may desire to have the supervisor resign from his job in order to eliminate the potential issue. Litigation, of course, would be an expensive and time consuming endeavor. On the other hand, by utilizing a conciliation agreement, an employer might be able to spend a fraction of what it could’ve spent in litigation, including attorneys’ fees and court costs.
Second, litigation could permanently destroy the relationship between the employer and the employee. In certain situations, an employee’s salary is tied to a perception of whether he or she works well with supervisors or peers. An adversarial approach would likely hinder that perception, and would also show the employee that the employer is not vested in the employee. On the other hand, a conciliation approach by the employer would put the employee into that circle of protection that the employer has created and strives to maintain.
Third, the employer will likely preserve or recreate goodwill expressed during the course of an employment, if the employer chooses a conciliation agreement rather than pursuing litigation. Employees generally respect their employer if they feel that a job opportunity was made available to them, despite any transgressions they may have made. For example, an employee that arrives at work five minutes late every day may ignore the strict attendance policy simply because he can see the supervisor turning a blind eye. However, if the employer, in his desire to maintain a productive workforce, places the employee on an improvement plan, this may alert the employee of the employer’s expectations. If the employee’s productivity improves but then declines again, the employer would likely be able to terminate the employee without worrying about a retaliation claim, should the employer have provided the employee with a severance package or a neutral reference.
Conciliation Agreement Scenarios
Conciliation Agreements are commonly used in a range of disputes. Employment disputes often end with the parties agreeing to resolve the underlying situation and detailing the steps to be taken by both sides. Similarly, commercial disputes often require the parties to examine their relationship and agree to terms going forward in order to avoid further controversy and to preserve the business aspect of the relationship. Moreover, conciliation agreements have been utilized in situations as broad as worker’s compensation disputes to neighborhood relations. Most common situations are those where a continuation of the relationship is desired . For instance, in employment settings often the parties do not want to sever employment. Consequently, their goal is to reach an agreement on the facts as a resolution of the situation. Such factual disputes are often suitable for conciliation. Conciliation when used in employment situations may allow the employee to keep his job and the employer to keep the employee. In the commercial context it is most often a dispute over the sale of goods or provision of service where the business relationship is valuable and both sides want to maintain that relationship while resolving the issue at hand. Clearly a solution is appropriate.
Drafting and Enforcing Conciliation Agreements
The next step in the conciliation process involves drafting a conciliation agreement. This written agreement must be signed by all the parties to the litigation. Moreover, the terms of the conciliation agreement must be enforceable in court. A conciliation agreement that is not enforceable in court is no more useful to the parties than a written transcript of an oral agreement. After resolving the issues in dispute, an attorney should prepare the conciliation agreement for the parties’ signatures. Once the agreement is signed, it becomes binding upon the parties.
A question which arises in almost every case is whether the conciliation agreement should be an on-the-record document. This is not merely a formality. Very few conciliation documents have been submitted to the court for enforcement as the conciliation of a case. Having an on-the-record document may be the deciding factor as to whether a case is acceptable to the court for enforcement. For that reason, I have taken the position that the parties should read their agreement into the record so that there is an on-the-record document available to the court. While this is no guarantee that the conciliation agreement will be enforceable, it might very well be the difference between having an enforceable agreement and a court not being willing to enforce it.
The other consideration in drafting a good conciliation agreement is to avoid "future promises". Future promises are statements or assumptions made in an agreement regarding future action. Most commonly, the future promise is conditional. A classic example of a future promise is where one party agrees to pay the other spouse a percentage of his or her bonus as part of a child support obligation in the future. Future promises should be avoided. The failure to comply with the terms of a conciliation agreement is often deemed by courts to be contempt of court. Courts are generally not willing to hold a party in contempt for failing to perform an act that may or may not occur in the future. If the bonus never materializes, a court would be hard pressed to find a party in contempt for failing to pay a percentage of an expected but undetermined bonus. The question will always be whether the future promise is enforceable now or whether it is merely unenforceable in the future.
Conciliation Agreements: Limitations and Legalities
Conciliation agreements are not always enforceable in every jurisdiction. As discussed above, some jurisdictions require a conciliation agreement to be both signed by the parties and filed with the court if the litigants want the court to retain jurisdiction over the matter. See Klein Law Group, at *4; Meade, 882 N.E.2d 972; In re Marriage of Molloy, 875 N.E.2d 1076. At least one jurisdiction requires that a party must affirmatively ask for and obtain the court’s approval of a conciliation agreement. Pater, 588 N.E.2d 1190, 1195; Williams v. Williams, 706 N.E.2d 953 (Ind.Ct.App.1999).
Other jurisdictions (mainly in California) do not require such formalities for conciliation agreements to be enforceable. See Kingston, 51 Cal.Rptr.2d 908; Pg. 1 Assocs. Joint Venture, 901 P.2d 960; Gill, 252 Cal.Rptr. 947. However, even in jurisdictions where a conciliation agreement does not have to be signed or approved by the court, there are limitations on the enforceability of the agreement. For example, in California, conciliation agreements are void if they fail to comply with certain provisions of the Family Code, generally regarding support awards. Pg. 1 Assocs. Joint Venture, 901 P.2d 960, 962; Marriage of Consola, 121 Cal.App.3d 406, 405, 175 Cal.Rptr. 467, 466; Gill, 252 Cal.Rptr. 947, 952.
Conclusion: The Future of Conciliation Agreements
As alternative dispute resolution procedures gain traction, conciliation agreements are likely to become core to the substantive development of particular areas of dispute. Settlement in particular areas (such as discrimination) may become key to the development of the jurisprudence of that area. For example, an area where conciliation may become increasingly important is the issue of reasonable accommodation / disability discrimination, with many employers choosing to make accommodations rather than dealing with litigation in other areas. Looking forward, we may see a shift from conciliation to mediation, as clear boundaries are established, and those boundaries become as legally enforceable as terms of a contract . Indeed, if some level of sanction were to be attached to breaches, individuals may be less willing to sign them in the first instance, and such breaches would be more likely to be litigated. If individuals are to have confidence in the process, and willingness to enter into conciliation agreements with the knowledge that they will not be abandoned in favour of a more suspect practice of litigation, and if the conciliation process is to retain its popularity in preference to litigation, appropriate safeguards and enforcement mechanisms will inevitably have to be established. Any future developments in this area will need to respect the fine balance between the need for parties to have the incentive and confidentiality to be able to enter into settlement arrangements aimed at resolving their dispute, and the need to reduce recidivist and perpetration behaviour.