LABOUR LAW: Interest arbitration

An interesting development in the labour sector is the talk of implementing compulsory “interest arbitration”. Current legislation only provides for mediation and arbitration which is binding only once employers and unions agree to it. Interest arbitration differs in that it allows for arbitrators to make a “binding ruling on parties if the settlement of the strike is in the broader public interest.”

The main purpose for introducing interest arbitration is to prevent lengthy strikes jeopardizing the economic viability of the nation. Implementing this form of arbitration guarantees that disputes will be settled within a definite time frame. It also works as an incentive for the employer and the unions to settle disputes on terms that are favourable to both parties instead of risking leaving the final outcome in the hands of an independent third party. However, using an independent party to rule on a fair outcome requires both parties to be open and transparent and to disclose all information in the interests of justice.

The implementation of interest arbitration sounds very tempting but can come at a cost. Instead of allowing the parties to negotiate a settlement on their own terms, a settlement is imposed on them. The final outcome is determined by what the parties decide to disclose to the independent third party and therefore to sway the ruling in their favour they can be very selective about what they choose to share and therefore the ruling may not be as “fair” as if they had negotiated without an independent third party imposing a settlement on them.

Interest arbitration is a very appealing method of resolving strikes as a preventative measure of the economy suffering irreparable damage. However, it must be implemented with effective checks to ensure that a balance between public and private interest is achieved.

#Arbitration #labourlaw #employment #CCMA #interestarbitration #mediation #strike