It has been revealed that both Manchester and Cambridge will trial the scheme for a full year before the Government looks at implementing it nationwide.
The scheme will involve volunteers from local businesses who will trial the scheme after receiving training as mediators to sort out workplace disputes at the earliest possible stage.
Promoted as a means to reduce the number of cases taken to an Employment Tribunal, the project now has over 20 accredited members ready to take on disputes.
The Federation of Small Businesses (FSB) released figures that showed in 2011 there were 218,000 tribunal cases in the UK, a 44% rise from 2008/09, with each business footing an average £4,000 spend on defence against claims.
A spokesperson from BIS said this cost takes approximately £1,900 from the taxpayer per case.
Norman Lamb, Employment Relations Minister, commented:
“We know that sometimes workplace disputes are unavoidable, and that those involved see no alternative except an Employment Tribunal.
“We want to promote alternative resolution options and we’re committed to encouraging parties to find other ways of resolving their problems.”
“The use of mediation is one such way and this is why we’ve launched the BIS regional mediation initiative.
“This scheme will offer small businesses in Manchester the opportunity to experience mediation and discover the financial and psychological benefits.”
It has been reported that the new network of 20 organisations will work to reduce the burden of Employment Tribunals, and create a support system to help businesses undergoing dispute cases.
Holly Bonfield, FSB Regional Vice-Chairman, and one of the newly trained mediators, said:
“This pilot has the potential to save small firms a great deal of money and time by introducing mediation before things reach the Employment Tribunal stage.
“The training was challenging, thorough and highly practical. We are now ready to start supporting each other’s businesses in this tricky area.”