Alternative Dispute Resolution

Sometimes workplace issues are easier to solve when an impartial person helps to create the solution. Therefore, at various points in the discipline process, the employee or organization might want to bring in someone to help with problem solving. Rather than turning to the courts every time an outsider is desired, more and more organizations are using alternative dispute resolution (ADR). A variety of ADR techniques show promise for resolving disputes in a timely, constructive, cost-effective manner.

ADR is generally classified into at least four types: negotiation, mediation, collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as well, but for present purposes it can be regarded as a form of mediation. See conciliation for further details.) ADR can be used alongside existing legal systems such as sharia courts within common law jurisdictions such as the UK.

ADR traditions vary somewhat by country and culture

Pros of ADR

    • Much cheaper than formal litigation

    • More relaxed procedure

    • Fast moving and efficient

    • Private and confidential

    • Disputing parties are more in control of the process

    • Informal investigation allowed

    • Parties can agree to exchange documentation beneficial to the award

    • Parties may select the arbitrator

    • No jury of one's peers

In general, a system for alternative dispute resolution proceeds through the four stages shown in the figure below

1. Open-door policy.

On the expectation that two people in conflict should first try to arrive at a settlement together, the organization has a policy of making managers available to hear complaints. Typically, the first "open door" is that of the employee's immediate supervisor, and if the employee does not get a resolution from that person, the employee may appeal to managers at higher levels. This policy works only to the degree that managers who hear complaints listen and are able to act.

Organizations such as Turner Brothers Trucking, Northrop-Grumman, Polaroid, and Citicorp consider one of the benefits of the peer-review system to be the sense of justice that it creates among employees. The peer-review system can be used as the sole method for resolving employee complaints, or it can be used in conjunction with a step-review system. For example, it an employee is not satisfied with management's action at step 1 or 2 in the step-review system, the employee can submit the complaint to the peer-review committee for final resolution.

2. Peer review.

If the people in conflict cannot reach an agreement, they take their conflict to a panel composed of representatives from the organization at the same levels as the people in the dispute. The panel hears the case and tries to help the parties arrive at a settlement.

3. Mediation.

If die peer review does not lead to a settlement, a neutral party from outside the organization hears the case and tries to help the people in conflict arrive at a settlement. The process is not binding, meaning the mediator cannot force a solution.

Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties. A third party, the mediator, assists the parties to negotiate their own settlement (facilitative mediation). In some cases, mediators may express a view on what might be a fair or reasonable settlement, generally where all the parties agree that the mediator may do so (evaluative mediation).

The process is private and confidential. The presence of a mediator is the key distinguishing feature of the process. There may be no obligation to go to mediation, but in some cases, any settlement agreement signed by the parties to a dispute will be binding on them.

4. Arbitration.

If mediation fails, a professional arbitrator from outside the organization hears the case and resolves it by making a decision. Most arbitrators are experienced employment lawyers or retired judges. The employee and employer both have to accept the person's decision.

Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the "award") they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.


What are the advantages of arbitration?

Similar to mediation, arbitration as an alternative to litigation can allow for the saving of time and money to resolve a dispute. The parties can set limits on discovery and the issues to be decided by the arbitrator. These limitations can affect who will testify at the arbitration and what type of evidence will be allowed. The parties have more control of the arbitration process compared to court administered litigation, including where and when the hearing will be conducted. Monetary limits can also be set preventing an arbitration award from exceeding a certain value or assuring that a minimum monetary recovery is obtained.

Each stage reflects a somewhat broader involvement of people outside the dispute. The hope is that the conflict will be resolved at earlier stages, at which the costs, time, and impact of employees and other organizational stakeholders are lowest.


Mediation vs Arbitration

Mediation and Arbitration are generally contractually agreed upon substitutes for resolving disputes as opposed to resorting to a court to resolve it. The purpose and goals of Mediation and Arbitration, however, are quite different and often misunderstood.

The purpose of Mediation is to have the parties sit down with a neutral third party who tries to facilitate a monetary or other settlement to the dispute. Neither party has a legal obligation to settle the dispute, and any statements made during a Mediation are not admissible evidence in the event no settlement is reached. Mediation can be a highly efficient, cost effective tool. It can conclude quickly or it can take several hours as the mediator conducts multiple rounds of shuttle diplomacy between the parties. After many hours the parties feel personally invested in the process and neither wishes to leave without settling the dispute. It is important to remember, however, that because the mediator’s job is to get a settlement, regardless of its terms, it is up to you to determine if you can live with the settlement terms. In the event the Mediation fails and an Arbitration provision is not contained in the contract, you can enforce your rights in a court of law.

Binding Arbitration provisions, on the other hand, are a substitute for the formal process of a court. Binding Arbitration is typically conducted in front of one or three arbitrators and the Arbitration is much like a mini trial with rules of evidence. Arbitration typically proceeds somewhat faster than a case in court, and typically at a somewhat lower cost in attorney time and expense. The result of the Arbitration is final.

MEDIATION . . .

  • Is a facilitated negotiation process

  • Is an informal amicable resolution

  • Allows the parties to clear the air and resolve misunderstandings

  • Provides assistance from the Mediator to move forward

  • Give both parties full control over the final resolution

  • Is conducted by an experienced Mediation Officer who makes no decisions effecting the parties

  • Resolution is NOT mandatory; parties can still go to Arbitration

  • Is a Win-Win situation

ARBITRATION . . .

  • Is NOT a negotiation process; it is a structured hearing

  • Is a formal procedure decided by a hearing panel

  • Allows the structured presentation of evidence, testimony and witnesses

  • Gives the Panel full authority to decide the outcome

  • Gives full control to the Hearing Panel

  • Is conducted by a panel of experienced REALTORS who make the final decision and the award

  • Hearing Panel decision is final

  • Is a Win-Lose situation