Extreme levels of conflict, particularly when you as manager are involved, will provoke extreme defences from employees.  Any given set of facts can be interpreted in vastly different ways by stakeholders, to the point where each believes the other is lying.  Sometimes, blatant lying is employed as a strategy.  Surprisingly, it is extremely difficult to prove lies, many of which incorporate a foundation of fact.

As manager, you must document issues and interactions objectively, accurately and promptly, after the event.  Do not try and interpret the behaviour and perceptions of the employee, but record what can be seen, heard and measured (including feedback from others).  Make sure that
the documentation is dated, for future reference.

Every organisation has its own processes for managing underperformance or misconduct.  The documentation prepared by managers is critical to those processes working effectively and to determining the level of sanctions if and when applied.  Bear in mind the Manager’s documentation may be used in industrial courts or commissions.  This is why objectivity and accuracy are paramount.

In Conclusion

Interpersonal conflict is your problem!  But handled well you will meet your accountability requirements and ensure the continued effectiveness of the team contribution to the organisation’s business.  Be brave!  Be fair!