Business Use of Alternative Dispute Resolution
Arbitration by business terms refers to the agreement between two parties to settle disputes out of court with the involvement of a third party which is neutral to the dispute (Jerrold, 2014). In employee contracts, companies use arbitration to ensure employees sign away their right to sue the company for bar reasons of being fired or other disputes that may occur between the employee and the employer (Flores et al., 2017). The legal binding agreement of arbitration as stated in most employee contracts waivers the right for a court hearing on a dispute between an employer and their employees (Jerrold, 2014). For such reasons, companies use arbitrations as a means to reduce the company’s legal risks. The implications of settling a dispute through arbitration are often different than those of a full-blown case.
Arbitration offers the possibility of more flexibility when resolving a dispute between two parties. This is one of the reasons that makes companies prefer arbitration as opposed to cases that involves a judge and a jury. Furthermore, arbitration also allows the ability to avoid hostility that is normal with fill blown cases that result to lawyers who fight legal battles trying to prove their client’s case (Jerrold, 2014). Consequently, arbitration provides companies with the opportunity to apply a faster and more streamlined method of resolving disputes out of court.
There are negative implications that are tied to arbitration on the side of the employee. One major disadvantage of arbitration is that it denies the employee the right to the case between the two parties to be decided by a judge or jury (Hanotiau, 2014). Secondly, the third neutral party is mostly hired by an independent arbitration service company or on an individual basis. The arbitrator’s final decision is binding to both the employee and the employer. Furthermore, the decision is final and cannot be reversed or appealed (Hanotiau, 2014). Therefore, the decision can never be looked at for a second time by anther arbitrator.
The arbitration process mainly plays at an advantage to the side of the employer. However, the legality of the concept is accepted in the justice system. There are many constitutional issues that arise from the use of arbitration law in employee contracts. Constitutional issues such as the lack of the use of the rules of evidence and the civil procedure followed in most cases make the arbitration process seem not to be the best legal way to solve such matters (Stempel et al., 2017). However, such issues have a positive effect on the process since it makes it less complicated and therefore easy to resolve issues. The use of arbitration by corporates is legal as it is provided for in the constitution. Companies are allowed by law to implement such clauses in employee contracts as they deem fit through utilizing legal advice (Stempel et al., 2017). It is therefore considered legal for organizations to carry out arbitration exercises that will make the resolution of disputes between an employee and the employer.
The use of arbitration by companies can be advantageous to them and not the employee. The employees usually sign employee contracts without paying attention to the wavering of their right to sue their employer for any wrong doing. Furthermore, arbitration is somehow fixed on the employee’s part but creates a legal flexibility on the company’s side. Therefore, the use of arbitration though considered as legal, has some negative implications on the party that is oppressed during the resolution of the dispute.
References
Flores, C., Bjorklund, A., Carmora, C., Palma, H., & Galhardo, A. (2017). Panel No. 1: arbitration and legal traditions. Retried from http://elibrary.law.psu.edu/cgi/viewcontent.cgi?article=1007&context=yam
Hanotiau, B. (2014). The law applicable to arbitrability. SAcLJ, 26, 874.
Jerrold, L. (2014). Litigation and legislation. Arbitration agreement. American Journal of Orthodontics and Dentofacial Orthopedics, 146(3), 399-401.
Stempel, J., Karamanian, S. L., Sherman, E. F., Blankley, K., Blair, H. A., & Ajayi, O. (2017). Panel No. 3: Contemporary and critical views of arbitration. Retrieved from http://elibrary.law.psu.edu/cgi/viewcontent.cgi?article=1011&context=yam
