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