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INTEREST ARBITRATION: A dispute resolution option for Collective Bargaining?
PRESENTATION OVERVIEW
• THE NEED FOR AN ALTERNATIVE OPTION
• INTRODUCTION TO INTEREST ARBITRATION
• THE MECHANICS OF INTEREST ARBITRATION
• LOCAL AND INTERNATIONAL EXPERIENCE
• A WAY FORWARD
THE NEED FOR AN ALTERNATIVE OPTION
Current dispensation – Strike / Lock Out Strikes contaminated by violence &
intimidation Strikes impose a cost on both parties –
lose/lose situation No control over the duration of strikes Protracted strikes present the risk of
adverse economic impact beyond the employer
Limited power to intervene in the public interest
INTRODUCTION TO INTEREST ARBITRATION
an extension of the collective bargaining process where a third party / parties resolve issues that the parties could not agree upon
a process that resolves collective bargaining disputes through final and binding arbitration
MECHANICS OF INTEREST ARBITRATION
TERMS OF REFERENCE
STRUCTURE
ARBITRAL CRITERIA
PROCEDURE
MECHANICS OF INTEREST ARBITRATION
TERMS OF REFERENCE
CONVENTIONAL ARBITRATION arbitrator can determine
any award that is appropriate
FINAL OFFER ARBITRATION arbitrator must choose either employer or trade union proposal BY ISSUE
arbitrator may choose offers by employer or trade union
on each issue
BY PACKAGE arbitrator chooses entire
package of either employer or trade union
MECHANICS OF INTEREST ARBITRATION
STRUCTURE
SINGLE ARBITRATOR appointed by institution or agreed between parties
PANEL OF ARBITRATORS appointed by institution or agreed between parties
ALL NEUTRAL PANEL two or more arbitrators
TRIPARTITE PANEL one or more arbitrators
plus reps from employer and labour parties
MECHANICS OF INTEREST ARBITRATION
ARBITRAL CRITERIA
REPLICATION - Award is reasonably what could have been achieved had bargaining continued until an agreement was reached.
DEMONSTRATED NEED - Party has made a case for its position
COMPARABILITY - Award is comparable to like workplaces / sectors
AFFORDABILITY - Employer’s ability to pay
MECHANICS OF INTEREST ARBITRATION
PROCEDURE
WRITTEN BRIEFS Exchanged with other party
and given to arbitrator/ panel prior to process
ORAL SUBMISSIONS Made at arbitration hearing
CONSIDERATION OF SUBMISSIONS
By arbitrator / panel
AWARD ISSUED
LOCAL & INTERNATIONAL EXPERIENCE
South Africa Essential Services e.g. Eskom
International USA, Canada, Australia, New Zealand Primarily employed in public sector disputes with some
application in the private sector High correlation in quantum of outcomes between
negotiated agreements and interest arbitration awards
A WAY FORWARD
Two options – Voluntary / Legislated Voluntary
Collective agreement
Legislated Amendment to LRA Choice between Strike or Interest Arbitration Strike for a defined period followed by Interest
Arbitration Interest Arbitration after a period of Strike at the
discretion of an independent third party.
Revolutionising
Workplace Relations