Mediation in labor relations will be presented through this paper. This thesis aims to achieve a better understanding of the mediation process, providing valuable insights, recommendations and guidelines for all participants in the process of resolving labor disputes. The paper provides an in-depth analysis of the impact of mediation on organizations and working relationships, exploring factors such as speed, costs, relationship preservation. Through research, the paper identifies the best practices in the application of mediation in labor disputes, as well as the challenges that organizations may face when implementing this method. Based on analysis and research, the paper provides advisory guidance for organizations and professionals dealing with labor disputes, helping them make informed decisions and successfully apply mediation. Through research, ethical standards in the practice of mediation are promoted to ensure professional and responsible behavior during the mediation process. Through this work, we will touch upon the comparison of the use of the mediation procedure with the countries of the European Union and the Republic of Croatia. Mediators, their roles and way of working were also analyzed. Furthermore, the paper also contains a historical overview of mediation in the Republic of Croatia, but also in the world. Through the work, we will also touch on collective and individual labor disputes. Finally, primary research was carried out in the paper. An anonymous survey was conducted, the data obtained based on the results of a sample of 100 respondents were interpreted, and graphs were created that show how people perceive mediation as an alternative way to resolve disputes. In addition to the research, judicial practice is also listed. The author's opinion is stated as the conclusion of the paper, and together with the data obtained from the survey and court practice, the entire paper is rounded off.