What is arbitration in the workplace?
Arbitration in the workplace is a method of resolving disputes between employees and employers outside of the court system. In this process, a neutral third party, known as an arbitrator, hears both sides of the dispute and makes a final, binding decision.
The arbitration process in the workplace
The arbitration process in a workplace include the following:
- Agreement to Arbitrate: This is typically outlined in employment contracts or company policies. It states that both the employer and employee agree to resolve disputes through arbitration.
- Selecting an Arbitrator: The parties choose an impartial arbitrator, often someone with expertise in employment law or HR issues.
- Hearing: Both parties present their evidence and arguments to the arbitrator. This process is less formal than a court trial and can be conducted in person, over the phone, or even via written submissions.
- Decision: After reviewing the evidence, the arbitrator makes a decision, known as an award. This decision is usually final and binding, meaning it cannot be appealed in court.
Challenges of Arbitration in the workplace
- Limited Appeal Options: Since arbitration decisions are typically final, there is little room for appeal if one party disagrees with the outcome.
- Perceived Bias: Some critics argue that arbitrators may be biassed, especially if they are selected by the employer or a third party associated with the employer.
- Mandatory Arbitration Clauses: These clauses, which require employees to arbitrate disputes instead of going to court, can be controversial. Critics argue they may limit employees’ rights.
Arbitration is a valuable tool in HR management for resolving disputes efficiently and cost-effectively. While it offers many benefits, such as speed, lower costs, and confidentiality, it also has its challenges. Understanding the arbitration process and its implications can help both employers and employees navigate workplace disputes more effectively.
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