Page 233 - DMGT406_HUMAN_RESOURCE_MANAGEMENT

Human Resource Management

Notes Advantages of Arbitration

Following are the arguments for arbitration:
1. Since it is established by the parties themselves, arbitration has the particular advantages
of bringing the dispute settlement procedure down to the level of the parties to the
dispute. Workers and management tend to have greater faith and confidence in settlement
machinery which is in effect of their own.

2. Since arbitration is established by agreement, it is more flexible than other procedures
and can be adjusted to the views, desires and experience of the parties and to the
circumstances obtaining in the undertaking or industry.
3. This procedure, operation at the level closet to the parties to the disputes, has the advantage
of enabling the arbitrators to acquire a much greater familiarity with the characteristics of
the particular industry or undertaking than most courts or tribunals.

4. The procedure is relatively expeditious when compared to that in ordinary courts or
labour tribunals. It cuts down delay and results in a prompt settlement of differences.

Evils of Arbitration

Following are the arguments against arbitration:

1. It deprives of its right to go on a strike, for there is often a provision in the agreement that
the trade unions and workers will refrain from a strike during the continuance of the
agreements.
2. Judgment is often arbitrary and ill-advised as the arbitrators are not well-versed in the
economic and technical aspects of industry.
3. Arbitrators are often biased against labour and their award is, therefore, usually not in its
favour.
4. Delay often occurs in arriving at the award and settlement of disputes. This leads to a
breakdown in the morale of members.

13.8.3 Adjudication

The ultimate legal remedy for the settlement of an unresolved industrial dispute is its reference
to adjudication by the government. Adjudication involves intervention in the dispute by a third
party appointed by the government for the purpose of deciding the nature of final settlement.
On getting a report of the failure of conciliation, the government has to decide whether it would
be appropriate to refer the dispute to adjudication. The rationale behind this is that developing
countries can ill-afford to suffer loss of production flowing from long-drawn strikes and lockouts.
Further, the trade-union movement is yet not strong and mature enough to adopt and rely only
on collective bargaining or the protection of the interest of the workers. Therefore, the need of
intervention by the government is felt.

Types of Adjudication

When the government gets a report of the failure of conciliation proceedings, it has to decide
whether it would be appropriate to refer the dispute to arbitration. The reference of dispute to
adjudication is at the discretion of the government.

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