Labor arbitration agreement, also known as labor arbitration clause, is a provision in the employment contract that outlines the process of resolving disputes between an employer and employee. Labor arbitration clauses are commonly found in unionized workplaces, but can also be included in standard employment contracts.
The purpose of a labor arbitration agreement is to provide an alternative to resolving disputes in court. In this process, a neutral third party, called an arbitrator, hears both sides of the dispute and makes a binding decision. The labor arbitration agreement specifies the rules and procedures that both parties must follow during the arbitration process.
The labor arbitration agreement often includes the following key elements:
1. Selection of the arbitrator: Usually, the employer and employee jointly choose an arbitrator from a list of approved arbitrators. The arbitrator must be neutral and have extensive knowledge of labor laws.
2. Submission of the dispute: Once a dispute arises, the parties submit a request for arbitration to the arbitrator. The request must include a description of the dispute and any supporting documentation.
3. Hearing: The arbitrator sets a hearing date and location where both parties present their case. The hearing is usually less formal than a court proceeding, but the arbitrator may still require witnesses, evidence, and testimony.
4. Decision: The arbitrator issues a final and binding decision, known as an award. The award may include financial compensation, reinstatement of employment, or other remedies.
There are several benefits to including a labor arbitration agreement in an employment contract. First, it offers a quicker and less expensive resolution to disputes than going to court. Second, it allows the parties to choose an arbitrator with expertise in the relevant field. Third, it is a private process that maintains the confidentiality of the dispute.
However, there are also potential drawbacks to including a labor arbitration agreement. One concern is that some employers may choose arbitrators who consistently favor employers, which could result in unfair outcomes for employees. Additionally, employees may not realize that they are giving up their right to a trial by jury when signing a labor arbitration agreement.
In summary, a labor arbitration agreement is a provision in an employment contract that outlines the process of resolving disputes between an employer and employee. It provides an alternative to resolving disputes in court and involves a neutral third party, the arbitrator, who makes a binding decision. While there are benefits to including a labor arbitration agreement in an employment contract, it is important for employees to understand the potential drawbacks and how it may impact their legal rights.