The Pros and Cons of Mediation and Arbitration in Employment Law Cases

Posted:  Aug 1, 2023

Disputes can arise anywhere and time, and their resolution may vary depending on their severity. In a workplace, for example, dealing with disputes can be particularly challenging since it’s not always possible to satisfy everyone involved.

Consequently, when facing a dispute in a work environment, two primary methods for resolution come into play: mediation and arbitration. This blog post will delve into arbitration and mediation processes, analysing their respective pros and cons.


What Is Arbitration?

One of the most common methods of resolving work disputes is arbitration. Arbitration, as a dispute resolution mechanism, can be seen as a situation whereby two parties in dispute have their differences resolved outside the court of law, usually by an impartial third party known as an arbitrator.

What an arbitrator does is very simple. For a start, they will first hear both sides of the dispute, then review all the evidence before making a final, binding decision, known as an arbitral award. It has to be noted that the arbitrator’s decision is usually legally binding, i.e., it can be enforced in court.

A court of law can appoint an arbitrator, provided that the parties involved in the dispute apply to the court to do so. And to answer the question of who can act as an arbitrator, anyone can be appointed as an arbitrator as long as they are impartial or unrelated to the disputing parties.


The Arbitration Process

  1. Agreement to Arbitrate: The arbitration process typically begins when both parties agree to submit their dispute to arbitration. This can be done through a pre-dispute or post-dispute agreement.
  2. Selecting an arbitrator: After both parties have agreed to submit their dispute to arbitration, the next step is to select an arbitrator or a panel of arbitrators based on their expertise and neutrality. If, for whatever reason, the disputing parties cannot agree on an arbitrator, then the next line of action would be to apply to the court of law in their jurisdiction for the appointment of an arbitrator.
  3. Presentation of arguments and relevant evidence: Once the arbitrator has been appointed, the next action would be to commence the hearing process. At this junction, both parties will logically present their arguments and present relevant evidence and witnesses to back up their arguments.


  1. Arbitration hearing and final evaluation: After the parties involved have made their arguments, the next thing would be for the arbitrator to evaluate the case and issue a final decision, the arbitral award, which is legally binding on the parties involved.



Advantages and Disadvantages of Arbitration in Resolving Employment Disputes

Just like every dispute resolution process, arbitration has pros and cons. In this blog section, we will look at some of them.

Advantages of arbitration

  1. It makes dispute resolution faster: Unlike traditional court litigation, resolving disputes via arbitration has proven to be faster. This helps save time for both parties.
  2. Privacy: Another important aspect of arbitration is the privacy that it brings. Since the arbitration process is usually confidential, sensitive employment issues will not be exposed to outsiders.
  3. Expertise: In deciding the arbitrator, the parties involved can choose the arbitrator they like. That is, they get to choose an arbitrator with expertise in employment law.
  4. The arbitration process is less formal: Another important advantage of arbitration is that it is less formal than traditional court proceedings.


Disadvantages of arbitration

  1. Concerned parties have limited appeals: Generally, arbitral awards have limited grounds for appeal, potentially leaving parties dissatisfied with the decision.
  2. It is very expensive: While the process may be faster, it can still be expensive compared to other alternative dispute resolution methods.
  3. Inability to challenge decisions: Since the arbitral award is usually legally binding, unsatisfied parties may not be able to challenge the decision.


What is Mediation?

Although they are both similar in structure, mediation and arbitration are different. Mediation is a form of alternative dispute resolution where a neutral third party, known as the mediator, facilitates communication and negotiation between the conflicting parties to help them reach a mutually acceptable resolution.

The process differs from arbitration because, in mediation, a mediator does not seek to make a decision or impose a solution. Instead, they assist the conflicting parties in understanding each other’s perspectives and interests, finding common ground, and reaching a voluntary agreement.

Also, the outcome of every mediation process is not legally binding. The disputing parties may or may not agree with the final resolution.


Mediation Process

As we have said earlier, mediation and arbitration don’t resolve disputes the same way; they share the same structure. So, in this section, we will briefly examine the process involved in every mediation process.

  1. Agreement to mediate: The mediation process typically starts with both parties agreeing to mediate their dispute voluntarily or through a contractual obligation.
  2. Presentation of arguments: After the parties have agreed to mediate their dispute, the next thing would be for the mediator to set up a mediation session where each party presents their side of the dispute and discusses their concerns.
  3. Final evaluation: After they have presented their arguments, the next thing would be for the mediator to work with the evidence presented to identify areas of agreement, facilitate communication, and explore potential solutions. Ultimately, the parties will be encouraged to negotiate until they arrive at a resolution acceptable to all involved.


Advantages and Disadvantages of the Mediation Process in Resolving Employment Disputes

Advantages of mediation

  1. The process is very flexible: One of the big advantages of mediation is that it allows for creative solutions.
  2. The outcome is non-binding: As we said earlier, the outcome of every mediation process is non-binding. The disputing parties have control over the outcome and can choose not to agree if the terms are not favourable.


  1. It helps to preserve working relationships. Since mediation focuses on collaboration rather than adversarial positions, the process greatly helps preserve working relationships.
  2. It is less expensive: Unlike arbitration or traditional litigation, mediation is more cost-effective.


Disadvantages of mediation

  1. No Guaranteed Outcome: The fact that mediation is not legally binding means that the resolution of the dispute is firmly in the hands of the parties. Only they can decide if they want to resolve the issue, not the mediator.
  2. Potential Power Imbalance: If there is a significant power imbalance between the parties, one side may feel pressured to agree to terms they are not entirely comfortable with.



Both arbitration and mediation offer alternative ways to resolve employment disputes, and the choice between the two depends solely on the preferences and circumstances of the parties involved.

Therefore, if you ever need the service of a qualified and experienced employment attorney for proper guidance, don’t hesitate to contact Stevens and Company Law Corporation today!



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