How the LRA can help

Arbitration Explained

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Labour Relations Agency

The Labour Relations Agency is an independent,publicly funded organisation.

Our job is to promote good employment relationsin Northern Ireland.

If you have a disability, please let us know if we need to make any special

arrangements for you to use our service.

If you need to use an interpreter, we can arrange for one to be available.

This booklet can also be made available in alternative formats.

Please contact the Arbitration Secretary:• on 028 9033 7407 • or email arbitration@lra.org.uk• or visit our website www.lra.org.uk

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ArbitrationArbitration involves an independent and impartialperson called an arbitrator (acting alone or chairing apanel) being appointed by the Labour RelationsAgency to make a decision on a dispute. Thisdecision is based on the evidence presented by theparties to that dispute.

Arbitration is entirely voluntary. All parties to thedispute must agree to go to arbitration. The partiesshould also agree in advance that they will abide bythe arbitrator’s decision.

This booklet explains the range of arbitrationservices available from the Agency. Please contactthe Arbitration Secretary for information on how toaccess these services – the contact details are setout on the back of this booklet.

What is arbitration?Arbitration is an alternative to a court of law or tribunal. It is a non-legalistic process, with noswearing of oaths. Arbitrations are conducted inprivate rather than in public.

The arbitrator will consider the written and oralsubmissions of the parties at a hearing. Questionsare asked by the arbitrator to clarify points. The parties may also ask questions of each otherthrough the arbitrator (in other words, this is not across-examination as at a court or tribunal). Thearbitrator then makes a decision and, whereappropriate, an award that the parties agree to acceptand implement.

Arbitration is often used in collective employmentrelated disputes. For example, a trade union mightbe in dispute with an employer over a pay rise. Theunion could agree with the employer to ask theAgency to appoint an arbitrator to hear each side’scase and then make an independent and impartialdecision.

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Arbitration can also be used to settle individualdisputes. For example, an individual and an employermight decide to go to arbitration to avoid the stressand expense of an employment tribunal. However, aswith any workplace dispute, it is important to makeuse of all internal procedures to resolve the issue inquestion, before proceeding to arbitration.

The Agency has a panel of arbitrators, selected on the basis of their knowledge of employment law, adjudication skills and employment relationsexperience. However, they are independent of theAgency and, therefore, not its employees. Thearbitrators are appointed to arbitrate on disputes on acase by case basis. Checks are made to ensure thatthey have no conflicts of interest in respect of aparticular dispute.

By committing to arbitration the parties give authorityto the arbitrator to impose a settlement on them.Therefore, the process of arbitration will always resultin a settlement.

As arbitration is entirely voluntary, the Agency has nopower to compel an unwilling party to take part.

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The range of arbitrationservices available

There is no charge for using the Agency’s arbitrationservices.

The Agency offers the following range of arbitrationservices:

Industrial arbitrations – these are arranged by theAgency in accordance with its statutory powers underArticle 84 of the Industrial Relations (Northern Ireland)Order 1992.

In accepting such arbitrations the Agency must besatisfied that any negotiating procedures have beenexhausted or are unlikely to resolve the issue, and thatthe dispute cannot be settled by conciliation. Thisservice is provided to employers and unions and, inexceptional circumstances, to individual employees.

Procedural arbitrations – these are where nationalor sectoral negotiating procedures provide forarbitration as the final stage in the procedures.

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The Labour Relations Agency Arbitration Scheme– this provides an alternative to having a case heardby a tribunal to resolve an employment related dispute(for example, claims of unfair dismissal, breach ofcontract or discrimination).

The Scheme is quicker, confidential, non-legalistic,less formal and more cost effective than a tribunalhearing.

Under the Scheme, an arbitrator’s decision is bindingas a matter of law and has the same effect as atribunal.

Further details are set out in a separate booklet The Labour Relations Agency Arbitration SchemeExplained.

Independent appeals, grading or job evaluationappeals panels – these are established where theparties to an agreement seek the assistance of theAgency in facilitating independent appeals, or gradingor job evaluation appeals, within the terms of theparties’ own agreed procedures.

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Arbitrations under Statutory Exemption Orders –these arise under Article 142 of the EmploymentRights (Northern Ireland) Order 1996, whereby theDismissal Procedures Agreement in any industry isdesignated as a substitution for the Industrial Tribunalprovisions of that Order. The only industry that hasapplied for, and been granted, such an exemption isthe Electrical Contracting Industry.

How do arbitration hearings operate?Arbitration hearings are held in private, usually at theAgency’s offices in Belfast or Derry/Londonderry.

Arbitration hearings are conducted in an informalatmosphere and do not follow the strict rules ofevidence applied in courts of law or tribunals.

Each party is free to bring along such representatives,advisers or witnesses as are necessary for thepresentation of its case provided this is within thescope of any procedures already agreed between theparties. Legal representation does however requirethe consent of the arbitrator.

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The parties to an industrial dispute must reachagreement on the terms of reference prior to thearbitration hearing taking place. The essentialrequirement is that the terms of reference mustdisclose the dispute, or difference between theparties, and must leave the arbitrator in no doubt asto the question the parties seek to have determined.

The hearing is confidential and any notes taken bythe arbitrator are only retained until a written decisionis produced. Thereafter any notes are destroyed.

After the hearing the arbitrator will prepare a report,which will be distributed to the parties at the sametime by the Agency. This report will contain thearbitrator’s decision and any associated award ifapplicable.

Throughout the process the parties will benefit fromthe services of the Agency’s Arbitration Secretary.The Arbitration Secretary will ensure that correctprocedures are complied with and that proper andadequate facilities are provided for the hearing.

The Arbitration Secretary is also responsible fordistributing the arbitrator’s report.

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Other issues arising

Industrial Action – when trade unions and employersagree to arbitration any industrial action related to thematter in dispute is expected to be called off.

The Agency is not in a position to insist on cessationof industrial action. However, bearing in mind theconditions of acceptance of arbitration, it should bestressed that no purpose can be served by continuingany industrial action.

Disputes between Workers and Workers – indisputes of this nature the Agency must considerwhether all available procedures, including ICTU (IrishCongress of Trade Unions) procedures, have beenfully exhausted. In addition, the Agency must ensurethat all parties that could be affected by the awardare willing to accept conditions of a reference toarbitration. In the case of a demarcation dispute thiswould mean implementation by the employer of anyaward.

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Arbitrations arranged by the parties themselves –some procedural agreements provide for, or theparties may request, a form of arbitration that is notcompatible with the service provided by the Agency.For example, one party may retain the right to rejectthe arbitration decision.

In such circumstances the Agency is prepared toassist the parties with the arrangements. However,these will be regarded as private arbitrations and theAgency does not accept any responsibility for theoutcome. When a private arbitration is arranged theresponsibility for payment of the arbitrator’s fees andexpenses rests entirely with the parties themselves.

The Industrial Court – as an alternative to using itsown arbitrators the Agency may refer disputes to theIndustrial Court for arbitration.

The status of this arbitration is no different from anyother except that the decision may become a matterof public record. Decisions on such references aremade by the Agency’s Director of Conciliation andArbitration in consultation with the Chief Executive.

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Data Protection Act 1998The Labour Relations Agency holds some informationto monitor progress and produce statistics.

And finally…We do our best to provide a high standard of serviceat all times but if you are not satisfied with the serviceyou have received, you should write to the Agency’sCustomer Complaints Officer. The addresses of theAgency offices are given on the back of this booklet.

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Labour Relations Agency

Head Office2-16 Gordon StreetBelfastBT1 2LG

Regional Office1-3 Guildhall StreetLondonderryBT48 6BB

To contact the Agency’s Arbitration Secretary:Telephone: 028 9033 7407Textphone: 028 9023 8411Fax: 028 9033 0827Email: arbitration@lra.org.uk

www.lra.org.uk