Types of Labor Arbitration


Employment disputes are increasingly common even with collective agreements in place. Arbitration is an alternative method of dispute resolution in which both parties submit their labor relation issues to an arbitrator. It is the last step in dispute resolution between employers and labor unions representing their employees.

The union arbitration process starts with the filing of a case and selection of an impartial arbitrator. The arbitrator is typically an attorney well-versed in employment laws. Furthermore, there are different forms of labor arbitration depending on your dispute.

1. Grievance Arbitration or Rights Arbitration

This deals with a dispute involving interpretation and application of a specific existing agreement. It involves a collective bargaining agreement or labor contract.

A neutral arbitrator (agreed upon by both employees and the union board) and the management resolves the dispute. The decision of the arbitrator is binding.

2. Interest Arbitration or Contract Arbitration

This involves negotiation of the conditions and terms of employment for union employees before signing a new employment contract or renewing an existing one.

The arbitration process aims to come up with fair terms for both the management and employee. The decision by the neutral arbitrator is binding to both sides.

3. Arbitration of Statutory Disputes

This form of arbitration is typically reserved for non-union contract agreements. Some companies provide this arbitration as the formal dispute resolution method for any complaints regarding employment to avoid costly court litigation.

Job discrimination is the frequent row settled by arbitration of statutory disputes. The agreements reached in this arbitration are binding to both parties.

4. Tripartite Arbitration

This involves three arbitrators. The employer and union each select one arbitrator, while the two arbitrators or the employees choose the third.

Arbitration, compared with litigation, is more efficient, private and less costly. In most cases, the parties involved still have a good working relationship after the process, unlike in court litigation.