Mediation can be an invaluable tool in resolving workplace conflicts, especially those that revolve around compensation issues such as unpaid overtime. These disputes can quickly turn contentious, erode trust between employees and employers, and lead to legal action if not managed properly.
Workplace relationships are, at their healthiest, collaborative and mutually respectful. But when financial disagreements arise—particularly around wages owed for overtime work—the dynamic can break down, leading to dissatisfaction, low morale, and, in some cases, an employee’s departure or a formal tribunal claim. This is where mediation becomes not just useful, but often essential.
Below, we explore key strategies to manage disputes involving unpaid overtime through mediation, ensuring that both employees and employers feel heard and respected while working towards an equitable resolution.
The Importance of Addressing Disputes Early
One of the critical aspects of managing any conflict in the workplace is timing. Unaddressed complaints about unpaid overtime can foster resentment and escalate needlessly. Mediation works best when it’s introduced early—when conversations are still possible and the damage to working relationships is still reversible.
If an employee raises concerns about not being compensated for hours worked beyond their contract, managers and HR professionals must take it seriously. Minimising or dismissing these concerns often leads to more entrenched positions. Before mediation even formally begins, acknowledging the complaint and showing a willingness to engage is the first step towards a constructive solution.
Understanding the Root Cause
Before entering mediation, it’s important to conduct a thorough internal review to understand the facts. Are there clear records of the hours the employee worked? Is there a discrepancy between the employer’s understanding and the employee’s perception of owed hours? Sometimes, the conflict arises from differences in interpreting overtime eligibility, poor communication about policies, or informal work practices that weren’t correctly recorded.
Understanding the root cause of the dispute helps not only in building a fair resolution but also in avoiding similar issues in the future. An accurate diagnosis of the problem can also help frame the discussions during mediation in a more focused and productive way.
Creating a Neutral and Confidential Environment
Mediation requires a space in which all parties feel safe to speak openly and honestly. Unlike formal disciplinary proceedings or grievance processes, mediation is an informal and confidential intervention designed to help the disputing parties find common ground.
The role of the mediator, who must remain unbiased, is fundamental. This individual must be perceived as neutral by both parties—someone trusted to guide the conversation rather than impose a solution. In many cases, bringing in an external mediator can aid in establishing neutrality, especially if there is a history of mistrust or perceived bias within the organisation.
Confidentiality is vital to the success of mediation. Participants must be assured that what is discussed in the session remains private. Establishing these ground rules at the outset contributes to a more open dialogue.
The Role of Active Listening
Active listening is one of the most potent tools in any mediation process. Both employers and employees often come to the table with strong emotions—frustration, anxiety, anger, or confusion. These feelings need to be acknowledged before any logical discussion about hours or pay can take place.
The mediator facilitates this by allowing each party to speak without interruption, summarising what has been said to affirm understanding, and checking in with the other party to confirm or clarify points. This process does more than just surface the details—it helps rebuild empathy and understanding, which are often casualties in strained workplace relationships.
From the employee’s perspective, recounting their experience of putting in extra hours, missing time with family or incurring additional personal stress without compensation can be emotionally charged. For managers, the challenge may be in acknowledging these realities while contending with budgetary constraints or systemic issues like unclear time-tracking procedures. Mediation makes room for both sides to feel heard and validated.
Clarifying Legal and Policy Frameworks
One of the common sources of confusion that leads to overtime pay disputes is a lack of clarity about expectations from both sides—what constitutes overtime, under what conditions it must be authorised, and how it is calculated and compensated. During mediation, it’s often necessary to bring these elements into the conversation, not to assign blame, but to establish a shared understanding.
Referencing employment contracts, timekeeping records, and applicable employment law can help ensure the conversation is rooted in facts as well as feelings. In the UK, the Working Time Regulations 1998 state that employees should not be required to work more than 48 hours per week on average unless they have opted out, and any overtime policies—paid or unpaid—should be unambiguous.
Employers may also need to review internal guidelines on overtime authorisation, communication protocols, and how work outside usual hours is tracked and verified. If these elements are not well defined, mediation offers an opportunity to acknowledge procedural shortcomings and commit to future improvements.
Generating Creative Solutions
The aim of mediation is not to determine who was right or wrong in the past, but how to find a way forward that both parties can accept. Once emotions have been aired and facts clarified, it’s possible to start exploring possible resolutions. This stage benefits from creative thinking and a willingness to compromise.
For example, if an employee cannot be compensated through payroll because of budget restrictions or a missed deadline, could alternative forms of redress be considered? This might include additional paid time off, a bonus in a future pay period, or adjustments in current work hours to ensure a better work-life balance.
Mediators encourage the disputing parties to generate options collaboratively. This empowers them to take ownership of the resolution and leaves both sides feeling that they had a voice in shaping the outcome—an important step in repairing trust.
Following Up After Agreement
Reaching an agreement in mediation is a significant achievement—but it’s not the endpoint. It’s essential that both parties commit to following through on whatever terms are established and remain in communication to evaluate how well the agreed solutions are working.
Equally important is documenting the agreement in a clear and precise manner. While the content of the mediation remains confidential, the outcomes should be written down and confirmed to avoid future misunderstandings. HR may play a supporting role here, ensuring compliance with internal policies and legal frameworks.
A follow-up meeting scheduled at a future date—perhaps 30 or 60 days later—can help all parties reflect on the progress and make necessary adjustments.
Preventing Future Disputes
Mediation should not just address the immediate conflict but act as a springboard for improving systems and preventing the recurrence of similar disputes. This might mean revisiting overtime policies, offering training to managers on recognising and addressing excessive workloads, or implementing more accurate time-tracking systems.
Good practice also involves communicating proactively with staff about any changes resulting from the mediation outcome. If employees can see that their concerns have led to positive organisational learning, trust in management often increases—even if the resolution was not entirely in their favour.
A culture in which feedback is encouraged, and concerns are addressed promptly and respectfully, significantly reduces the likelihood of formal disputes. Encouraging open communication, regular check-ins, and inclusive management practices can go a long way in fostering a healthier workplace environment.
Final Thoughts
Disputes over unpaid overtime significantly affect employee morale, retention, and workplace harmony. Yet, they also offer a unique opportunity to examine how power, communication, and fairness play out in everyday operations. Managed poorly, such disputes can turn into long-running grievances. But managed through structured mediation, they can result not only in a fair settlement but also in stronger working relationships and improved organisational practices.
Ultimately, mediation is not just a tool for conflict resolution. It’s a process that, when applied thoughtfully and respectfully, reflects a deeper commitment to fairness, dialogue, and mutual growth within the workplace.
