Employment Claim Arbitration Can be a Less Costly Choice for Employees

In one of its rulings, the Supreme Court said that employment arbitration offers "simplicity, informality, and expeditious resolution of disputes".

Normally, a lot of employees’ instinctive reactions when they feel they have been wronged by their employers are to sue. While it’s true that employees must be vigilant about their rights, a legal battle need not necessarily be instituted when employee’s rights or certain labor laws are violated.

Employees Should Consider Arbitration for an Employment Claim

Employment arbitration is one of the choices for resolution and remedy in problems in the workplace aside from negotiation, mediation, and collaborative law. It is a legal technique for the resolution of disputes outside the courts, presided over by an arbitrator, arbiter or arbitral tribunal wherein conflicting parties are agreed to be bound by that person’s decision.

Labor Law Claims: Arbitration vs. Mediation

While some people may confuse arbitration and mediation as the same (given that both are a form of alternative dispute resolution and that there is a third party stranger presiding over the process), they are different as arbitration is a form of binding dispute resolution while the rest is usually non-binding.

Another distinction between mediation and arbitration is that a mediator will try to help the parties find a middle ground on which to compromise while an arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable.

The government and the Supreme Court are vocal about the need to explore and encourage alternatives for workplace disputes. A memorandum issued by the Department of Labor has quoted a ruling from the Supreme Court wherein it said that high-quality alternatives to litigation hold the promise of expanding access to public law rights for lower-wage workers.

Arbitration Provides Several Advantages in Employment Disputes

The most contentious disputes can be resolved in a manner which permits the complaining employee to raise the dispute without permanently fracturing the employee's working relationship with the employer through arbitration.

Aggrieved workers may not have to spend money to hire a lawyer or spend a long time going through the legal process if they opt for arbitration.

After all, a lot of employee grievances involve small money disputes rather than disputes concerning commercial contracts so arbitration is a definite benefit and allows both the employer and employee to avoid the costs of litigation.

Other potential advantages in arbitration include:

• Arbitrators with an appropriate degree of expertise can be appointed if the dispute is highly technical as compared to judges in litigation cannot be chosen.
• It is often a faster resolution than litigation in court.
• It can be cheaper and more flexible for businesses.
• It is confidential.
• Arbitration awards are generally easier to enforce in other nations than court judgments.
• There are very limited avenues for appeal of an arbitral award.

• The content of this page is provided for informational purposes only, and should not be construed as legal advice. If you need help with an employment law question, please click here to talk to Rodney Mesriani or an employment lawyer near you.