Progress report on arbitration

Scott Alexander of the Labour Relations Agency and arbitrator Noel Kelly report on the progress and developments of the Agency’s two year old arbitration scheme for the resolution of unfair dismissal disputes.

In Issue 47, Frontline published an article by the Labour Relations Agency (LRA) about its Unfair Dismissal Arbitration Scheme. The scheme was designed as an informal alternative to the Industrial Tribunal system. At the time of the last article (early 2003) the scheme was about a year old and had just one referral since its launch in June 2002. Growth has been slow but the signs are encouraging. Five more cases were heard in the scheme’s second year and two new cases were heard in June 2004 with three or four others ‘bubbling under’. The representatives in the most recent cases include employment law firms and the larger trade unions, an indication that major stakeholders in the tribunal system are now interested in the LRA’s Arbitration Scheme.

This article looks at the practical benefits of the scheme with reference to the hearings which have taken place. For further details on the Arbitration Scheme contact Scott Alexander, Arbitration Secretary, on 028 90 337414 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Originally, the Arbitration Scheme applied only to unfair dismissal claims. By the end of 2004, a second scheme will be introduced to deal with requests from employees to work flexibly. The current draft scheme is available from the Agency’s website at www.lra.org.uk.

Date and place are fixed

The arbitrator has just one case to hear. Parties will not turn up to be told that they are third or fourth on a list. Parties will not be told that their case will not start until 2 pm at the earliest. Parties will not be sent away and told that their case will be relisted. All of the hearings have been heard on the day and at the time agreed to in advance by the parties. Arbitrations can be held at a place and (within reason) at a time to suit the parties. That could even be at the place of work (by agreement) if there are suitable facilities.

People’s time is valuable and the Agency recognises that opportunity costs can exceed legal costs where senior managers and key workers have their time wasted in abortive hearings. The relative certainty in the arbitration listing process is a distinct advantage.

Informality

The procedural informality of the arbitration process has many advantages over the more formal tribunal procedure. If there is a good reason for an adjournment request, it can be granted without fuss. For example, a solicitor who represented an applicant was engaged in a criminal trial which was going to run over. He telephoned the day before the arbitration hearing. Consent was obtained and a new date found within an hour or so. No one’s time was wasted on unnecessary formality.

Parties are asked for papers in advance. These typically include a summary of their position, witness statements and relevant documents, such as the contract, the disciplinary procedure, the dismissal letter. Parties have to provide such documents in any event in an Industrial Tribunal, particularly under the April 2004 rules. However, the arbitration system can be more flexible. If a party fails to cover a relevant point or fails to furnish a relevant document, eg redundancy criteria, the arbitrator will ask for it in advance of the hearing. It will then be copied to the other party and time will be saved.

Speed

As part of the entry requirements, the parties have to sign certain documents, including a waiver of the right to go to tribunal. The arbitration hearings so far have all been dealt with within a few weeks of the waivers being signed and decisions have been issued within two weeks of the hearings. Arbitration hearings so far have lasted for approximately half a day. Only one very complex case lasted beyond 3pm. Both representatives considered it would have lasted three to five days in a tribunal.

Inquisitorial system

The way in which the arbitrators and the parties conduct themselves is entirely different from the adversarial system in tribunals. The arbitrator teases out questions and answers. There is no aggressive questioning or cross-examination of witnesses by the parties or their representatives. Parties may not need a lawyer. A good personnel manager or someone who can present a cogent argument may suffice. Some parties have been unrepresented; others have used lawyers or trade union officials. Nonetheless, parties who have someone who can present a case cogently and logically have an advantage. Lawyers have represented nine out of sixteen parties and have helped produce well presented written submissions and oral arguments. The atmosphere is noticeably less contentious and adversarial than at tribunal. The parties are put at their ease by the staff of the LRA and the arbitrator. Both sides have a separate conference room and are supplied with refreshments. The arbitrator generally encourages everyone to refer to attendees by their first names. The emphasis is on establishing the right answer rather than attempting to ‘beat’ the other side.

The hearings are short and focused. The LRA provides guidance on how to prepare submissions and what documents may be included as appendices. The LRA also ensures that the papers are exchanged on time.

The arbitrator and the parties will have read the papers in advance and already know the background. The relevant issues are identified right at the start of the process and time is not wasted. This is a key reason why the vast majority of arbitration hearings are completed by lunchtime.

Client satisfaction

The LRA has formally surveyed participants and the feedback has been exceptionally positive. Managers and employees like the opportunity to have their say and to explain their side of the argument in a two-way conversation with the arbitrator. Some participants feel that the tribunal setting with its formal procedure drags out matters unnecessarily and some feel they have been prevented from putting their point in the way they wanted at tribunal.

Managers and their lawyers particularly like the speed and flexibility of the system. Above all, they comment on the different atmosphere: less adversarial, less formal, no threat of costs. Participants like the fact that the written decision is issued almost immediately and that it includes recommendations on how to improve employment relations. Even where a party has lost, they know why they have lost. The written dec-ision is in straightforward, non-legalistic language and reflects the strengths and weaknesses of each side’s case. All but one person who responded said they would generally prefer an arbitration hearing to a tribunal.