Voluntary Arbitration

The Article is written by Matiha Khan, School of Legal Studies, Central University of Kashmir.

[1] ABSTRACT:

This paper mainly deals with the concept of Voluntary Arbitration of Industrial Disputes along with forms. The paper also discusses the need and importance of referring industrial disputes to arbitration and has expressed provisions for voluntary arbitration. It considers the importance of the various principles in relation to voluntary arbitration embodied under international law as well as the municipal laws of India. It elucidates the methods of opting for voluntary arbitration and its scope.

Keywords: voluntary arbitration, disputes, employer, employee, equitable, resolve.

[2] INTRODUCTION:

Voluntary arbitration is an alternative dispute resolution mechanism that allows two parties to settle their disagreement without going to court. This procedure is particularly helpful in avoiding the time and cost associated with traditional litigation, as it often results in a faster resolution. To initiate voluntary arbitration, both parties must agree to the terms of the process, including the selection of an arbitrator who will hear the case and the rules that will govern the proceedings. The arbitrator’s decision is binding, meaning that both parties are obligated to comply with the outcome of the process. Voluntary arbitration can be an effective and equitable method for resolving disputes promptly and efficiently.

[3] CONCEPT OF VOLUNTARY ARBITRATION:

Voluntary arbitration is a widely accepted conflict resolution mechanism in the industrial world. It is an alternative to taking disputes to the courts, which is usually considered confrontational, time-consuming, and expensive. In voluntary arbitration, both parties in a dispute agree to present their case to a neutral third party, who acts as an arbitrator. The arbitrator listens to both parties and considers the evidence presented before rendering a decision. The arbitration tribunal’s decision is binding, which means that both parties must comply with it. This process is known for its effectiveness in resolving disputes in a timely, efficient manner, with minimal disruption to the workplace. Many organisations have found voluntary arbitration to be an effective and valuable tool for managing conflicts in the workplace, and it is increasingly becoming a preferred method of dispute resolution.

In the realm of industrial disputes, voluntary arbitration comes in various forms[1]:

1. INTEREST ARBITRATION: When employers and employees are unable to reach a resolution on certain issues, interest arbitration comes into play. This process employs a neutral third party who listens to both parties’ arguments and then makes a final decision based on the evidence presented. Interest arbitration can be employed in various settings, such as labour disputes, contract negotiations, and other scenarios where both parties are unable to come to an agreement. This approach is highly effective in resolving disputes because it ensures that both parties have a chance to voice their opinions and guarantees that the decision is impartial and fair.
2. GRIEVANCE ARBITRATION[2]: The process of grievance arbitration involves calling upon an unbiased third party to intervene and settle disputes between an employer and an employee. It is commonly utilised when employees feel that they have been subjected to unjust treatment or their rights have been violated in some form. The arbitrator carefully considers the arguments presented by both parties before making a decision based on the facts. This decision is typically considered final and binding, requiring both parties to adhere to it. Grievance arbitration serves as an effective and equitable mechanism for resolving conflicts in the workplace.
3. FINAL-OFFER ARBITRATION: Final offer arbitration, which is also referred to as “last offer” arbitration, is a method of resolving disputes where both parties involved in a negotiation present their final offers to a neutral third party. The third party, in turn, chooses one of the offers as the final decision, which both parties must accept. This approach is commonly utilised in labour disputes or collective bargaining agreements. It is regarded as a constructive way to motivate both parties to provide reasonable offers and to avoid prolonged negotiations or legal

It is important to mention that each type of voluntary arbitration carries its own set of advantages as well as disadvantages, and the choice to utilise different methods will ultimately depend on the unique circumstances of the situation at hand.

[4] LEGAL PROVISIONS FOR VOLUNTARY ARBITRATION:

When it comes to resolving industrial disputes, voluntary arbitration can be a viable option. Various provisions have been put in place to ensure that this process is fair and beneficial for all parties involved, whereby both the employer and employee have the right to agree to arbitration[3] as a means of settling their dispute. This can be done either before or after the dispute arises. The arbitrator is typically an independent third party[4] who is chosen by both parties and has the authority to make a binding decision[5]. The decision reached by the arbitrator is final and cannot be appealed. Overall, the use of voluntary arbitration can help to resolve industrial disputes in a timely and cost-effective manner while also promoting a spirit of cooperation between the parties involved.

[4.1] INTERNATIONAL SCENARIO;

Voluntary arbitration is a well-recognized method of resolving industrial disputes in international law. This process allows parties involved in a dispute to choose an arbitrator who will make a decision that both the parties must adhere to. One of the most significant benefits of voluntary arbitration is that it helps to avoid expensive and time-consuming legal battles that may arise from disputes. In addition, it provides a fair and impartial way to resolve conflicts that arise between parties.

Several international conventions and agreements govern voluntary arbitration, including the New York Convention and the International Centre for Settlement of Investment Disputes (ICSID). These agreements ensure that the arbitration process is conducted in a fair and transparent manner and that the decisions made are enforceable in courts around the world. Voluntary arbitration is a crucial tool in maintaining peace and stability in the global economy. It helps ensure that disputes are resolved in a just and equitable manner, which is essential for fostering international trade and investment. Furthermore, it is worth mentioning that voluntary arbitration can be used in a variety of things, including labour disputes, commercial disputes, and investment disputes. In all the cases, the main objective is to provide a fair and efficient way to resolve conflicts that arise between parties. It is an integral part of international law, which provides a mechanism for resolving disputes that is fair, impartial, and cost-effective. Moreover, it contributes to the stability of the global economy by ensuring that disputes are resolved in a just and equitable manner.

[4.2] INDIAN LAW AT A GLANCE:

The Indian law on voluntary arbitration of industrial disputes provides for a crucial legal framework that effectively governs the process of resolving conflicts between employers and employees in India. Section 10A[6] of the Industrial Disputes Act 1947 is a recent amendment that provides for the resolution of disputes relating to individual workmen. This section allows for the establishment of a Grievance Redressal Committee (GRC) in the workplace, which is responsible for addressing grievances raised by individual workmen. The GRC consists of an equal number of representatives from the employer and the employees, as well as a neutral third party as the chairman. The GRC is required to meet within a specified time frame after a grievance is raised and must make an effort to resolve the issue through conciliation. If the grievance is not resolved at the GRC level, the matter can be referred to a voluntary arbitrator. This process is intended to provide a speedy and effective resolution to individual grievances, without the need for legal action or litigation.

This Section is an important provision for protecting the rights of individual workmen and ensuring a harmonious workplace environment. By utilising this process, employers can demonstrate their commitment to fair and equitable treatment of their employees, while employees can have their grievances addressed in a timely and effective manner. It offers a voluntary mechanism for dispute resolution that serves as an alternative to the traditional legal system. The law mandates the parties to choose a neutral and impartial arbitrator who is responsible for carefully listening to both sides of the conflict and making a final and binding decision based on the evidence presented. With several advantages, such as confidentiality, flexibility, and speed, the Indian law on voluntary arbitration of industrial disputes is a powerful tool for employers and employees alike to settle their disputes in a fair and efficient manner without resorting to legal intervention. It is an essential legal tool for resolving conflicts and maintaining harmonious industrial relations in India.

[5] NEED AND IMPORTANCE:

The process of voluntary arbitration is an essential and fundamental aspect of resolving industrial disputes. It serves as a neutral platform that guarantees both parties a fair and just opportunity to present their case and reach a mutually agreeable solution. This approach is particularly useful in situations wherein there is a lack of trust and open communication between the parties involved. Voluntary arbitration provides a mechanism that fosters cooperation and promotes harmony in the workplace while avoiding costly and protracted legal battles that can further damage relationships between the employer and employees.

Furthermore, voluntary arbitration is a highly effective means of ensuring that disputes are resolved in a timely and efficient manner. It paves the way for both parties to work together towards a peaceful and sustainable resolution that benefits everyone involved. This approach provides a level of flexibility that is not always available through traditional legal proceedings, and it can help to preserve the working relationship between the employer and employees. By choosing voluntary arbitration, all parties can come to a resolution that is mutually beneficial without the need for costly and time-consuming litigation. Overall, voluntary arbitration is an excellent tool for promoting workplace harmony and ensuring that disputes are resolved in a just and equitable manner.

The utilisation of voluntary arbitration in industrial disputes is of utmost importance in fostering and sustaining a healthy and productive work environment. The process of arbitration provides a fair and unbiased platform for resolving conflicts that may arise between employers and employees without the need to resort to costly and time-consuming legal battles. By willingly agreeing to the arbitration process, both parties can effectively avoid the negative consequences that may arise from prolonged disputes, including a decline in productivity, damaged relationships, and a decrease in morale.

Additionally, the use of arbitration can help to maintain the good reputation of an organisation by demonstrating a commitment to handling conflicts in a responsible and professional manner. This approach is a reliable and valuable tool for promoting cooperation, trust, and mutual respect within the workplace. It is, therefore, an essential component of any effective conflict resolution strategy. In conclusion, voluntary arbitration is a critical element in fostering a harmonious and productive work environment and should be embraced by all organisations committed to success through collaboration and compromise.

[6] CONCLUSION:

To summarise, opting for voluntary arbitration as a means of resolving industrial disputes is a just and efficient approach that enables both employers and employees to voice their opinions. This process often results in a mutually favourable settlement. Additionally, electing to engage in voluntary arbitration eliminates the expense and protracted legal proceedings that come with going to court. In light of these benefits, voluntary arbitration should be contemplated in any dispute within the industrial sector.

[7] REFERENCES;

1. Riya Sehgal, Settlement of Industrial Dispute through Arbitration and Conciliation, Settlement of Industrial dispute through Arbitration and Conciliation | VIA Mediation Centre.
2. Sahibnoor Singh Sidhu, Voluntary Arbitration of Industrial Disputes and the Curious Case of Class-Action Arbitration | International Journal of Law Management & Humanities, Vol. 4 (2021), Voluntary-Arbitration-of-Industrial-Disputes-and-the-Curious-Case-of-Class-Action-Arbitration.pdf (ijlmh.com).
3. Debi S. Saini, Arbitration of Industrial Disputes: Shadows of Compulsory Adjudication | Punjab University Law Review, Dec Issue pp. 1-17, (1992), (PDF) “Arbitration of Industrial Disputes: Shadows of Compulsory Adjudication,” Punjab University Law Review, December issue, pp.1-17. (researchgate.net).
4. Marvin F. Hill, Jr & Emily DecLacenserie, Interest Criteria in Fact-Finding and Arbitration: Evidentiary and Substantive Considerations, (1997), Interest Criteria in Fact-Finding and Arbitration: Evidentiary and Substantive Considerations (core.ac.uk).
5. Arjun P. Aggarwal, Arbitration under Section 10A of the Industrial Disputes Act, 1947 and Articles 136, 226 and 227 of the Constitution of India |Journal of the Indian Law Institute, Jan.-Mar., 1963, Vol. 5, No. 1 (Jan.-Mar., 1963), pp. 138-144, Arbitration under Section 10A of the Industrial Disputes Act, 1947 and Articles 136, 226 and 227 of the Constitution of India (knimbus.com).
6. Suresh C. Srivastava, VOLUNTARY LABOUR ARBITRATION: LAW AND POLICY | Journal of the Indian Law Institute, July-September 1981, Vol. 23, No. 3 (JulySeptember 1981), pp. 349-399, VOLUNTARY LABOUR ARBITRATION: LAW AND POLICY (knimbus.com).
7. Philip G. Phillips, The Function of Arbitration in the Settlement of Industrial Disputes | Columbia Law Review, Dec. 1933, Vol. 33, No. 8 (Dec. 1933), pp. 1366-1391, The Function of Arbitration in the Settlement of Industrial Disputes (knimbus.com).

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[1] Marvin F. Hill, Jr & Emily DecLacenserie, Interest Criteria in Fact-Finding and Arbitration: Evidentiary and Substantive Considerations, (1997), available at Interest Criteria in Fact-Finding and Arbitration: Evidentiary and Substantive Considerations (core.ac.uk), last seen 28/05/2023.

[2] The acceptance of grievance arbitration is due to the recognition by both unions and companies that individual grievances which affect one or a relatively small number of workers and involve disputes over the application and interpretation of existing contractual provisions are not worth the cost of striking or taking a strike

[3] Philip G. Phillips, The Function of Arbitration in the Settlement of Industrial Disputes | Columbia Law Review, Dec. 1933, Vol. 33, No. 8 (Dec. 1933), pp. 1366-1391, available at The Function of Arbitration in the Settlement of Industrial Disputes (knimbus.com), last seen on 27/05/2023.

[4] At one time, arbitration means the appointment by each party as an impartial third party, whose decision would obviously be the decision of the parties.

[5] Raza Textile Labour Union v. Mohan, (1964) 2 L.L.J. 65 (All.); Rohtas Industries Ltd. v. Workmen; Sindhu-Hochtief v. Pratap Dialdasy (1968) 2 L.L.J. 515 (Bombay).

[6] The provision is similar to section 10 (2), where the parties can request the appropriate government to refer the dispute to an appropriate authority for adjudication. The government must do so if satisfied that the persons applying represent the majority.