Arbitration Clauses in the Workplace

With the decision to enter into binding arbitration being welcomed by both sides, this agreement highlights how useful the arbitration process can be.

Thomas Cook pilots had planned eight days of strikes, with a three-day strike from 12 October and a four-day strike from 19 October, in relation to a pay dispute. The proposed 1.5% pay offer had been rejected by the Balpa union as being unreasonable, on account of the rise not being in line with inflation.

Discussions between the two sides have, however, led to the strikes being called off and an agreement being reached that the parties will enter binding arbitration to resolve the dispute.

Best Practice

Arbitration can be an effective way for parties to resolve their disputes outside the courtroom or tribunal. Binding arbitration allows very limited grounds of challenge and hearings take place in private. The decision of the arbitrator is confidential between the parties.

If an employer is entering into a collective agreement with a recognised union, it should consider how disputes will be resolved and whether a binding arbitration clause should be included in the agreement.

ACAS also run an arbitration service for unfair dismissal claims. The aim of this service is to ensure a speedy resolution of disputes in a confidential forum.  However, there are very limited grounds for appeal and no cross examination is allowed.

There are positive and negative aspects of all types of dispute resolution. The Thomas Cook case highlights some of the potential advantages of arbitration when compared to traditional litigation, in particular that a dispute can be resolved relatively quickly and in private.

For more information, please contact Jessica Scott-Dye in our Employment team on 0117 314 5652.