What Is Arbitration and How Does It Work?

A company or organization, whether big or small, should work both ways to be successful. On the one hand, the company provides jobs for its employees and ensure that benefits are given to them. In return, employees should ensure quality work to their respective companies and help the company. However, there are a lot of cases of employer-employee disputes that end up in court.

This is why union arbitration decisions are important to settle any conflicts between employers and employees. It may take some time, but any issues should be settled immediately. Otherwise, it can affect business operations and even compromise not only the employee’s future but also the company’s as well.

What is arbitration?

Arbitration becomes more common in a lot of businesses. That is why it is important to know more about how this works and how important it is in the world of business. Arbitration helps in resolving issues between employers and employees and comes up with solutions. Likewise, it helps to avoid issues from escalating and compromising the future of the business and its employees.

Arbitration is commonly used as an alternative to litigation to avoid spending time and money in going to court. Arbitration is usually headed by an arbitrator who serves as a witness who seeks evidence and helps in coming up with solutions to solve the case. It is also different from mediation, which is less formal than the former.

Having that said, arbitration allows both parties to settle issues without having to spend a lot of time and money to settle their issues. You may have also encountered an arbitration clause in your employment or business contract. Usually, the clause would state that any issues that arise between both parties should be settled through arbitration. Any decisions made out of the arbitration will bind both parties.

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The arbitration process

The general procedure usually involves case filing, selecting an arbitrator, and undergoing several hearings before coming up with a decision. First, one of the parties will submit a Demand for Arbitration and wait for the other party’s response before the set deadline. Once both parties agree with the arbitration, an arbitrator will be selected to handle the case.

One or more hearings will commence having enough time to gather evidence and other matters that can help the case. Once there are enough evidence, testimonies, and various information presented, the arbitrator will come up with a decision that will close and settle the case.

Both parties may get their respective lawyers, although not really required in an arbitration case. On a side note, a lawyer can help provide legal advice outside the arbitration setting. But it won’t serve the arbitration’s main purpose, which is to avoid exorbitant costs of settling in court and hiring a lawyer.

A win-win situation

An arbitration settlement should benefit both employer and employees. For one thing, it is a cost-effective and less time-consuming way of settling disputes that can compromise business operations. At the end of the day, both employers and employees should work together to ensure the business’ profitability while keeping employees happy and satisfied in their respective jobs.

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