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Why do unions use arbitration in the grievance procedure?

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Arbitration is a form of Alternative Dispute Resolution, ADR. ADR saves money and time by allowing contract negotiations and conflicts to resolve without the costs of traditional courtroom litigation.

Arbitration is similar to mediation, however, the impartial third-party arbiter decides the dispute outcome, and their decision is binding. Research from Harvard professor Arnold Zack and MIT economist Thomas Kochan indicates that offering arbitration as an option over the past 30 years has encouraged contracts to be settled voluntarily. Collective agreements are often drafted so alternative dispute resolution and arbitration, specifically, is designated as the process to solve disputes. The solutions offered in ADR are often creative in a manner traditional litgation does not offer and resolution comes quickly, unlike long waits and postponements associated with the court system.

Arbitration is used, then, as a part of the grievance procedure because it:

  • is cost-saving
  • provides opportunity for creative solutions
  • is timely in comparison to traditional litigation
  • is often specified in contract documents
  • tends to encourage voluntary agreements
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Arbitration provides a method of solving disagreements between management and unions by using the decision of an independent person who does not side with either the company or the union. How does it work? A third party, that is, a person who does not side with either the company or the union, listens to both arguments in the grievance case. The company and the union provide information to support their position. Witnesses may be called and questions asked by company, union and arbitrator. The arbitrator must then make a decision based on the information he/she has been given, including the contract language, past practice, and rights the contract negotiators intended to provide. The arbitrators decision is final and binding in most contracts. Both sides must accept the decision and cannot appeal to any higher step in the grievance procedure. An exception to this rule is noted when one side feels strongly that the arbitrator did more than interpret facts and rights under a contract ...
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