Mediation can be conducted both before and during legal proceedings. It is primarily distinguished from negotiations by the fact that it is conducted by a mediator. The mediator is impartial, is not involved in the dispute, and is supposed to support the parties in reaching an agreement. The mediator cannot settle the conflict between the employer and the employee, but the goal is to resolve the conflict through a settlement between the parties. The mediator conducts the mediation using a variety of methods aimed at amicably resolving the dispute, including assisting in formulating settlement proposals or may (at the unanimous request of the employer and employee) indicate possible and non-binding options for resolving the dispute.

A characteristic feature of mediation is its confidentiality. Both the mediator, the parties and other persons participating in the mediation proceedings are obliged to keep confidential facts they find out about during the mediation. Invoking settlement proposals, proposals for mutual concessions or other statements made in mediation proceedings during court proceedings is ineffective. Thus, neither party may invoke, e.g. significant concessions of the opposing party declared during the mediation to strengthen its argument and litigation position.

The court has referred the case to mediation - what next?

In practice, cases are most often referred to mediation when the court makes an order to that effect. This is preceded by a preliminary assessment of the case, in which, if the court deems it necessary, the parties may be summoned to appear in person at a closed session.

A case may be referred to mediation:

• Even before the defendant is obliged to respond to allegations in a lawsuit (this is an increasingly common solution in practice),
• After filing a response to a lawsuit,
• At a later stage of the proceedings - particularly if the parties so wish.

The court appoints a mediator and specifies the duration of the mediation in the court order. Generally, the maximum mediation period is three months. Importantly, this period (including the maximum, i.e., three months) can be extended at the parties’ agreed request or for other important reasons, provided that it promotes an amicable resolution of the case.

The order also includes information on the opportunity for a party to file an objection to the referral to mediation (this can be filed within a week). However, a party may decline mediation even if not filing an objection within the deadline. This can be both before the mediation begins and during the mediation, especially if a party considers that the mediation process to date is not leading to an amicable resolution of the dispute. This results from the voluntary principle in mediation. Importantly, failure to agree to mediation or subsequent withdrawal from it has no negative procedural consequences. The case is then referred to standard court proceedings.

Mediation is much less formalised than a court hearing, making it more accessible to parties, especially those who are not represented by professional attorneys. It usually consists of several meetings, which can be held both in-person and online (especially at the request of the parties or if the parties are from different, distant locations).

As indicated above, during the meetings, the mediator acts as a completely impartial host, and his task is to encourage the parties to make mutual concessions and amicably end the dispute. Importantly, mediation discussions should be focused precisely on those concessions and conditions under which the parties are willing to end the dispute, not arguments relating to the factual and legal background to the case. The exchange of arguments of this type is the domain of court proceedings - putting the parties in a confrontational position during mediation often drives them away from reaching a consensus.

In practice, the way mediators conduct mediation sometimes varies - some limit themselves to passive mediation between the parties, while others take a proactive stance, formulating their own observations and hypotheses to make the parties think. Sometimes mediators adjust the way they conduct mediation according to whether the parties act through professional attorneys or independently (in the latter case, they usually show more initiative).

The case is referred to standard court proceedings if mediation does not lead to an amicable resolution of the dispute. If, on the other hand, mediation is successful and the parties reach an agreement, a mediation settlement is concluded. Such a settlement is included in or attached to the minutes of the mediation meeting. From the employers' perspective, the key element of such a settlement is usually a properly worded waiver clause, covering not only the case already pending before the court, but also any other potential claims of the employee related to the employment relationship.

By signing the settlement agreement, the parties agree that the mediator will apply to the court for its approval. Once approved by the court, the settlement acquires the legal force of a court settlement (and it also constitutes an enforceable title if an enforcement order has been granted). Such a settlement has tax and social security implications. Under certain conditions, damages or compensation received on the basis of such a settlement are exempt from income tax and social security contributions, which in practice means that the gross and net settlement amounts can sometimes also be identical.

Is mediation expensive

Mediation conducted as a result of an employment court referral is generally remunerable, but the costs involved are not high. Generally, mediation costs include the mediator's fee and reimbursement of expenses.

If the mediator agrees to mediate without remuneration, then the parties are only required to reimburse the expenses of the mediation (in practice, however, such situations are rare).

For example, thus:

• In a case for compensation in the sum of PLN 30,000 for unjustified or unlawful termination of an employment contract, the mediator's fee will be PLN 300,
• In a case for rectification of a labour certificate, in which two mediation sessions were held, the mediator's fee will be PLN 250.

Documented and necessary expenses of the mediator incurred in connection with the mediation are reimbursed. These are expenses to cover:

• Rental of premises required for the mediation meeting (maximum PLN 70 per meeting),
• Correspondence (maximum PLN 30),
• Travel expenses (in the amount and under the rules applicable to business travel in a public sector or local government entity).

If the mediator is a VAT payer, his fees and expenses are increased by the applicable VAT rate.

But who bears these costs? If the parties fail to reach an agreement during the mediation, the costs of the mediation conducted as a result of a court referral (within the limits described above) are generally borne by the party that loses the litigation.

There are exceptions to this. If, for example, a party has failed to appear at a mediation session without justification during the proceedings, although it previously agreed to mediation, the court may, regardless of the outcome of the case, oblige that party to reimburse costs in part higher than the outcome of the case would have dictated, or even to reimburse costs in full.

Parties who reach an agreement usually bear the costs of mediation in equal shares.

What are the chances of a mediation settlement?

Statistics on mediation of labour law cases in district courts from 2006 to 2024[1] show that the number of cases referred to mediation by the courts is increasing. There were 33 cases in 2006, and in 2024 more than 100 times that number (3,829 cases).

The number of successful mediations is also growing. The courts discontinued only 5 labour proceedings as a result of approving a mediated settlement in 2006. In 2024, this was 1,017 cases, and in the record year of 2021, 1,136 proceedings were discontinued as a result of mediation settlement approval.

However, given the number of disputes handled by labour courts, the number of mediations and mediation settlements still appears to be relatively low. In practice, labour courts are increasingly referring parties to mediation at the beginning of litigation. However, of course, the outcome of this referral depends on the will of the parties and the mediator conducting the proceedings.

At the beginning of litigation, when the emotions of the conflict are still relatively fresh, it can be difficult for the parties to reach an agreement. Hence, the participation of professional attorneys may prove useful already at the mediation stage. However, the mediator undoubtedly plays the most important role during mediation proceedings. When he or she has the right soft skills and is committed to supporting the parties in reaching an agreement, then the chances of a settlement even by highly conflicted parties are significantly higher.

Is it worth it?

To the question of whether mediation is worthwhile, the answer is a definite yes, at least in most cases. Mediation can be an effective alternative to court proceedings, which in Polish conditions are often characterised by protractedness and, as a result, high costs for the parties.

Mediation makes it possible to end a dispute in a mutually prepared manner (and thus at least partially satisfactory to both parties) and to settle the matter much more quickly than by obtaining a final court judgment. Its formula is intended to extinguish the conflict, rather than aggravating it, which often occurs when conflicting versions of events clash in the courtroom. It is also important that, unlike a court hearing, which as a rule is open to the public (so that it can be followed by those not involved, such as other employees or the media), mediation takes place in an informal manner - with the participation of the mediator, the parties and possibly their attorneys only. In addition, the principle of secrecy of mediation (confidentiality) is maintained, which can be crucial for the parties, including for image reasons.

On the other hand, due to the voluntary nature of mediation, reaching an agreement ultimately depends on the will of the parties. If they are deeply conflicted and mutually negative, the chances of successful mediation may be lower.

Joanna Dudek, Aleksandra Wójcik

[1] Summary compiled by the Ministry of Justice - Mediation cases in labour law cases in district courts from 2006 to 2024.