What is Labour Arbitration?

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A  dispute resolution mechanism that involves the union, the employer and a neutral, third-party decision maker agreed to by the parties or appointed by a Labour Relations Board; the Arbitrator. The setting for the arbitration hearing is usually an informal setting in hotel boardroom during which each party will have the opportunity to present evidence and argument. The Arbitrator will make a binding and enforceable decision on the matter, which may be subject to review by the labour relations board or the court on an application for judicial review. In Weber v Ontario Hydro and New Brunswick v O’Leary, the Supreme Court of Canada has held that labour arbitration is the exclusive jurisdiction model of dispute resolution for unionized employees where the essential character of the dispute arises from the interpretation, application, administration or violation of the collective agreement. The Arbitration process is the final step of the grievance process in the collective agreement.

Benefits of Arbitration

Labour  arbitration has several advantages that make it an attractive option for resolving conflicts in the workplace. Arbitration is known for its efficiency, often resulting in faster and more streamlined resolutions compared to traditional court litigation. Additionally, arbitrators, typically experts in labour relations, ensure that disputes are addressed by knowledgeable individuals. Arbitration hearings are private and not open to the public. However, the resulting arbitration award may be published and thus become part of the public record. Parties also enjoy greater flexibility in the process, from selecting the arbitrator to customizing rules and scheduling hearings. While there are associated costs, the union and the employer pay for the costs of their own legal counsel and they equally share the cost of the Arbitrator and the arbitration hearing. The cost of a labour arbitration is less than that  incurred in lengthy court proceedings. Furthermore, arbitration decisions tend to be final and binding, offering a high degree of certainty in the outcome.

Labour Arbitrators have broader range of remedies than the courts. For example, an Arbitrator can reinstate a wrongfully dismissed employee and order the employer to make the employee whole; whereas, a non-unionized employee who sues their former employer is only entitled to monetary damages in lieu of reasonable notice. Furthermore, a Labour Arbitrator can reduce the disciplinary penalty imposed by the employer.

Furthermore, a Labour Arbitrator has jurisdiction to consider and provide remedies with respect to grievances alleging discrimination contrary to human rights legislation, whereas the courts do not have jurisdiction with respect to human rights matters.

Drawbacks of Arbitration

Typically, the union has “carriage” of the grievance during the later and final stages of the grievance procedure; the employee does not have control or a final say in whether the grievance is referred to arbitration or how it is dealt with during the arbitration hearing. As long as the union puts its mind to the issue in dispute and reaches a reasoned decision, the union may decide to settle the grievance on terms it considers reasonable or it may withdraw the grievance entirely.

Additionally, arbitration decisions are “final and binding,” leaving limited opportunities for appeal unless the decision is determined to be “unreasonable.”

If you have questions about the labour arbitration process, speak to one of our experienced labour lawyers at Labour Rights Law. Sebastien Anderson, our Managing Partner, argued his first labour arbitration case in 1987 and had more than 20 reported labour arbitration awards before going to law school. If you are a trade union looking to retain competent, experienced legal counsel, we welcome the opportunity to assist you!

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