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Labour Legialtion Guidelines

List of Hyperlinks
Chapter I. Labour legislation in the contemporary world
Chapter II. Substantive provisions of labour legislation: Freedom of association
Chapter III. Substantive provisions of labour legislation: Effective recognition of the right to collective bargaining
Chapter IV. Substantive provisions of labour legislation: Settlement of collective labour disputes
Chapter V. Substantive provisions of labour legislation: The right to strike 
Chapter VI. Substantive provisions of labour legislation: The elimination of all forms of forced or compulsory labour
Chapter VII. Substantive provisions of labour legislation: The elimination of discrimination in respect of employment and occupation
Chapter VIII. Substantive provisions of labour lech8.htmgislation: The effective abolition of child labour
Chapter IX. The drafting process
Chapter X. Drafting rules
Chapter XI. Drafting practices (applicable mainly to English speaking countries)

Frames version

Substantive provisions of labour legislation: Settlement of collective labour disputes1


Labour disputes and conflicts are inherent in all labour relations systems. They tend to occur when the collective bargaining process is reaching a breaking point and, if not resolved, often give rise to industrial action, such as strikes. The establishment of a system for the prevention and settlement of labour disputes is therefore a cornerstone of sound labour relations policy.

An effective labour dispute settlement system helps to contain labour conflicts within economically and socially acceptable bounds and to promote an atmosphere of industrial peace. This in turn contributes to the maintenance of a climate that is conducive to development, economic efficiency and social equity.

The effective resolution of labour disputes is closely linked to promotion of the right to collective bargaining. The attitudes and skills required for one are the same as for the other. The structure of dispute settlement systems is normally designed to promote collective bargaining, for example by requiring the parties to exhaust all the possibilities of reaching a negotiated solution or to exhaust the dispute settlement procedures provided for by their collective agreement before having access to State provided procedures. However, the danger to be avoided is the imposition of solutions, particularly through compulsory arbitration which, if not accompanied by the necessary safeguards, may amount to a denial of the right to free and voluntary collective bargaining.

Experience from many countries shows that the centre of gravity of a State dispute settlement system should be conciliation/mediation procedures aimed at assisting the parties to reach a negotiated settlement under conditions that are as close as possible to those of the normal bargaining process. Dispute settlement systems can also reinforce collective bargaining where the agreements resulting from such procedures are accorded the same legal status as agreements concluded through collective bargaining.

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Provisions of ILO instruments on the settlement of labour disputes

Several ILO instruments on the promotion and protection of the right to collective bargaining contain provisions relating to labour dispute settlement machinery. The main principles set out in these instruments are that:

  • bodies and procedures for the settlement of labour disputes should be so conceived as to contribute to the promotion of collective bargaining (Convention No. 154, Article 5, paragraph 2(e));
  • procedures for the settlement of labour disputes should assist the parties to find a solution to the dispute themselves (Collective Bargaining Recommendation, 1981 (No. 163), Paragraph 8);
  • disputes in the public service should be settled through negotiation between the parties or through independent and impartial machinery, such as mediation, conciliation and arbitration (Convention No. 151, Article 8).

ILO Conventions and Recommendations leave ample room for member States to design their own dispute settlement systems, in accordance with the following general principles:

  • governments should make available voluntary conciliation machinery, which is free of charge and expeditious, to assist in the prevention and settlement of industrial disputes (Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92), Paragraphs 1 and 3);
  • the parties to disputes should be encouraged to abstain from strikes and lockouts while conciliation or arbitration is in progress (Recommendation No. 92, Paragraphs 4 and 6);
  • agreements reached during or as a result of conciliation proceedings should be drawn up in writing and accorded the same status as agreements concluded in the usual manner (Recommendation No. 92, Paragraph 5).

In practice, the principal methods of dispute settlement, used in many countries, as suggested by the relevant ILO instruments, are:

  • conciliation/mediation (which may or may not be differentiated);
  • arbitration; and
  • adjudication.

All of these are commonly established on a statutory basis and involve independent and impartial third parties to assist in the resolution of disputes. Conciliation/mediation and arbitration procedures are sometimes also established under the terms of collective agreements.

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Definitions and classifications of labour disputes


Labour disputes may be of different kinds, each of which is most susceptible to a particular type of dispute settlement procedure at a final stage. Most countries distinguish between several types of labour disputes and have established separate procedures for dealing with them. Of course, the distinctions and procedures in any country reflect the specific historical development of its labour relations system.

The two most generally applied distinctions are between:

  • individual and collective disputes, and
  • disputes about rights and disputes about interests (also known as economic disputes). It is this latter distinction that characterizes the dispute settlement machinery of many countries.

A rights dispute is a dispute concerning the violation of or interpretation of an existing right (or obligation) embodied in a law, collective agreement or individual contract of employment. At its core is an allegation that a worker, or group of workers, have not been afforded their proper entitlement(s).

An interests dispute is one which arises from differences over the determination of future rights and obligations, and is usually the result of a failure of collective bargaining. It does not have its origins in an existing right, but in the interest of one of the parties to create such a right through its embodiment in a collective agreement, and the opposition of the other party to doing so.

The distinction between individual and collective disputes is less easy to draw. One reason for this is that an individual dispute can develop into a collective dispute, particularly where a point of principle is involved and if it is taken up by a trade union. In general, however, a dispute is individual if it involves a single worker, or a number of workers as individuals (or the application of their individual employment contracts). It becomes a collective dispute if it involves a number of workers collectively.

Clearly, both individual and collective disputes may concern rights. A worker may be aggrieved at not having been treated in accordance with a contract, and a union because its members have not been treated in accordance with the terms of a collective agreement. Interests disputes, however, are necessarily collective in character.

There are certain other distinctions that can be drawn between types of labour disputes, usually by reference to the particular conditions that are the subject of the dispute. In many countries, specific types of dispute are subject to special settlement procedures. These include disputes over trade union recognition and the right/obligation to bargain and disputes regarding discriminatory action against workers on the basis of trade union membership and activities. Another common example is the operation of special tribunals to deal with allegations of discrimination on the basis of race or sex.

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Legislative definitions

Sometimes legislation does not provide an explicit definition of what is meant by a labour dispute, but leaves it to the parties seeking assistance and the authorities providing that assistance to determine whether the situation is such as to warrant invoking the available procedures. However, in many cases the legislation does provide explicit definitions, which may be general and all-embracing or entail a classification of disputes into different types. In other cases, the definitions and classifications are not fully explicit, but are implicitly derived from provisions allocating specific types of dispute to particular procedures.

In some countries, all types of disputes are initially handled by a single procedure (conciliation). It is only where conciliation fails that they are classified by type with a view to their submission to separate settlement procedures and also to determine whether the parties are entitled to have recourse to industrial action.

In general, definitions of labour disputes usually refer to the parties and the subject matter. Such definitions may also cover disputes between workers and other workers, or between parties who are not in an employment relationship.

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The purpose of labour dispute settlement procedures

In general, the purpose of a system for the settlement of labour disputes should be the peaceful and orderly settlement of disputes, principally through the efforts of the parties themselves, so that it is unnecessary for them to resort to strikes and lockouts. Some dispute settlement systems are based on a legislative expression of this objective.

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In systems of free collective bargaining, the basic principle underlying procedures for the settlement of interests disputes is that the parties should resolve the disputes themselves through negotiation, while still having the possibility to threaten, or if necessary to take, industrial action. Third parties should be available in the event of a breakdown in negotiations, but only to assist the parties to the dispute to find a mutually acceptable solution to their differences. Nevertheless, there are in practice systems in which a threat of industrial action is sometimes the prelude to negotiation. In these systems, collective bargaining tends to be seen as a first method of dispute settlement, before recourse is had to the others.

Most systems include a mixture of voluntary and compulsory elements. The more a system is designed to promote the freedom of the parties to bargain and the settlement of disputes through a compromise that is freely arrived at, the more voluntary procedures will predominate. In systems which place greater emphasis on the avoidance of work stoppages, compulsory elements tend to be more prevalent.

In contrast, the basic principle underlying procedures for the settlement of disputes over rights is that they should, unless settled by negotiation, be resolved by courts or tribunals (or, in some countries, by arbitrators), rather than by industrial action, because they involve the determination of existing rights, duties or obligations which both parties are bound to respect. In such cases, the availability of adjudication for rights and obligations makes recourse to industrial action unnecessary and usually dysfunctional. Nevertheless, certain grievous or persistent violations of rights are sometimes considered by legislation as excusing, if not rendering legal, recourse to industrial action by the aggrieved party as an expression of protest. In such instances, the penalties applicable for industrial action are not applied.

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Reporting of disputes and initiation of the procedure

Legislative provisions may require or make provision for the reporting of labour disputes to the competent authority. The reporting of a dispute is the usual method for the commencement of labour dispute settlement procedures. It sometimes takes the form of a requirement to report labour disputes within a certain period of their occurrence, and to provide certain details for this purpose.

Under some legislation, a request or the reporting of a dispute by one of the parties is sufficient for conciliation or mediation to be commenced, while in other cases both parties have to agree to the submission of the dispute for the procedure to be set in motion (particularly in the case of interests disputes). The rationale for requiring only one party to request the initiation of the procedure is that everything should be done to avoid industrial conflict. In contrast, the reason for requiring both parties to agree to submit the dispute to conciliation or mediation is that the procedure is hardly likely to be successful unless both parties are amenable to it. Nevertheless, in practice, in the great majority of cases this makes hardly any difference since the parties to labour disputes are generally quite willing to have the assistance of a competent third party to resolve the dispute before a work stoppage is initiated.

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Conciliation and mediation

Distinctions between conciliation and mediation

In some countries, conciliation and mediation refer to the same type of procedure, while in others they denote distinct procedures. However, in both cases they consist of a means of assisting the parties to the dispute, through neutral third party intervention, to reach a mutually agreed settlement. The conciliator or mediator assists the parties to settle the dispute by themselves when negotiations have failed or reached an impasse. The conciliator or mediator is not empowered to impose a settlement on the parties. Conciliation/mediation in its least interventionist form is the most widely used method of dispute settlement under government auspices. In most industrialized market economy countries, it is by far the most common procedure employed for the settlement of collective interest disputes. Voluntary arbitration tends to be used much less frequently, if at all.

While conciliation or mediation is the primary method used to resolve interests or collective labour disputes, it is often a compulsory preliminary step before the adjudication of a rights or individual dispute.

Mediation is sometimes distinguished from conciliation as a separate method of dispute settlement in cases where, even though the dispute still has to be settled by agreement of the parties, the third party is somewhat more active than in conciliation and may have the authority (and in some cases the duty) to submit formal proposals for the settlement of the dispute. A distinction between conciliation and mediation is sometimes found in labour legislation, although it is not always reflected in the legislative definition of "mediation".

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Voluntary and compulsory conciliation/mediation

Conciliation/mediation may be voluntary or compulsory. It is voluntary where the parties are free to have recourse to it or not. It is also voluntary where it is undertaken by mutually chosen private third parties, outside the machinery established by the government or by law. In some cases, the law requires that both parties consent to or initiate the use of conciliation.

Conciliation/mediation is compulsory where the parties to a labour dispute are required to have recourse of it. Compulsory conciliation/mediation can be used as a means of ensuring that the hostile parties to a labour dispute come together at the negotiating table. Compulsion may therefore be preferred where the labour relations system is not well developed and/or in cases where the parties are not used to negotiating with each other. Conciliation is also often compulsory in systems which include compulsory arbitration (see Compulsory arbitration below).

Another significant reason for requiring recourse to conciliation/mediation in interest disputes is to limit, and if possible prevent recourse to industrial action. A strong link between conciliation/mediation and industrial action can be made by requiring the parties to give advance notice of industrial action to the conciliation authority, or by making it illegal to take industrial action without first endeavouring to resolve a dispute by means of conciliation.

A requirement to engage in conciliation/mediation may be based on any of the following, or a combination of them:

  • an obligation to notify the competent authority of a dispute;
  • a requirement to report disputes to the authorities, who may then be empowered to initiate conciliation/mediation proceedings and/or to require the attendance of the parties at such proceedings;
  • a restriction on the choice of the third party called upon to conduct the conciliation/mediation;
  • a requirement to participate in conciliation/mediation;
  • the prohibition of strikes and lockouts before a conciliation/mediation procedure has been resorted to and completed;
  • an obligation to adhere to an agreement concluded during conciliation/mediation;
  • in the case of rights disputes, the requirement to have undergone conciliation before the dispute can be considered by a court or tribunal.

Systems which require participation in conciliation also sanction failure to comply with this requirement. A party may be liable to a fine for failing to appear without good cause. A party that does not attend may run the risk of the dispute being declared unresolved, thereby leaving the other party in a position to move towards industrial action. Or the dispute settlement body may have the power to award costs against a party which has failed to appear. In systems which adopt this approach, failure to appear may also be deemed an unfair labour practice.

One commonly held view in this respect is that there is little purpose in making conciliation proceedings compulsory as there is not much chance of achieving agreement if one of the parties is recalcitrant. Others consider that all efforts should be made to avert industrial conflict and that the parties to a dispute should therefore be obliged to submit to these procedures, even if agreement at the end of the procedure has to be voluntary.

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Institutional and ad hoc conciliation

Conciliation is commonly undertaken by government conciliation services or, more rarely, by labour inspectors. Some countries have established conciliation bodies by statute and their independence from the government contributes to the confidence of the parties in the neutrality of the machinery. Examples include Denmark (the Conciliation Board), Ireland (the Labour Relations Commission), South Africa (the Commission for Conciliation, Mediation and Arbitration), the United Kingdom (the Advisory, Conciliation and Arbitration Service) and the United States (the Federal Mediation and Conciliation Service). In some cases, confidence in the independence of conciliation machinery is bolstered by the tripartite or bipartite composition of their governing bodies or of the conciliation service itself. Certain of the legislative provisions governing the services provided by these bodies are included later in this Chapter (see Establishment and functions of disputes settlement institutions below).

Conciliation may, however, be provided on an ad hoc basis, with either an individual or a conciliation board appointed on a case-by-case basis. Some systems provide for both individual conciliators and conciliation boards, while others merely encourage the parties to endeavour to settle their disputes by these means. The use of individual conciliators may offer certain advantages over conciliation boards, as individuals may be more flexible. Individuals may also confer a certain level of efficiency, deriving in some measure from their ability to specialize. Of course, reliance on individual conciliators requires a means of identifying suitably qualified persons to carry out the function.

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Conciliation/mediation procedures

Legislative provisions on conciliation procedures themselves tend to be brief, leaving much to the discretion of conciliation institutions and individual conciliators so as to allow flexibility in dealing with widely varying situations. They may include provisions on:

  • the exhaustion of any remedies existing under the applicable collective agreements before conciliation commences;
  • the choice of conciliator (or the composition of conciliation boards or committees, where they are used);
  • attendance at conciliation proceedings;
  • time limits for conciliation;
  • the status of a settlement reached through conciliation;
  • what occurs in the event of a dispute remaining unresolved, and when this is to be determined;
  • the options then available to the parties, which may include referral to other available dispute settlement procedures and the right to have recourse to strikes or lockouts, and which may differ according to the kind of dispute. The rules relating to recourse to strikes or lockouts are dealt with in Chapter V.

Conciliation/mediation may be a one- or two-stage process. Some systems which provide for both individual conciliators or mediators and conciliation/mediation boards also provide that disputes should or may be brought to a conciliation board or mediator if the first stage of conciliation is unsuccessful. Under some of these systems, certain kinds of dispute bypass individual conciliation and are considered initially by a conciliation/mediation board.

It can be important to identify accurately the moment when dispute settlement procedures end, and whether or not they have been successful. If the parties settle the dispute, this may mark the moment from which the collective agreement becomes applicable. For these reasons, it is appropriate to make provision for a formal means of concluding the dispute settlement procedure and recording its outcome.

If the parties do not settle the dispute, the identification of the moment when conciliation (or arbitration) ends is important with a view to subsequent efforts to resolve the dispute. The parties may themselves agree to submit the dispute to another settlement method. The legislation may provide that the parties should be encouraged or requested to agree to submit an unresolved dispute to binding arbitration. The legislation may also require the conciliation authority to refer the matter to arbitration. Finally, where the right to take industrial action depends on exhausting the conciliation/mediation procedure, the end of the procedure marks the time when such action may be taken.

It is also important to record the outcome of dispute settlement procedures, particularly if there are to be further attempts to resolve the dispute. The legislation may for example require a conciliator or conciliation body to report in writing on the outcome.

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Arbitration is a procedure for settling disputes by submitting them to an independent and neutral third party for a final and binding decision, which may be called an "award" or "decision". Arbitration in some form has a place in most government labour dispute settlement systems, and is also sometimes used voluntarily by the parties to settle their disputes. It may be provided for under the terms of collective agreements to deal mainly with rights disputes arising out of the agreement, as is common in the United States and Canada, or to deal with interests disputes, as sometimes occurs elsewhere.

Like conciliation, the submission of a dispute to arbitration may be either voluntary or compulsory. Arbitration is voluntary when it can be set in motion only with the agreement of the parties, and compulsory when it can be invoked by either party or the government at its own initiative. However, the submission of interests disputes to compulsory arbitration is not common, except in essential services. Indeed, the imposition of compulsory arbitration is not deemed to be in accordance with the principles of freedom of association, other than in essential services or inexceptional emergency situations.

In most countries, rights disputes are adjudicated by a court or tribunal, except in the case of arbitration systems established by collective bargaining for the settlement of disputes relating to the application of collective agreements, which in any case function more like adjudication than arbitration (see Disputes settlement procedures and the right to strike, below, and Chapter II).

Arbitration is most commonly used on an ad hoc basis, with individual arbitrators being appointed or arbitration boards set up to deal with specific disputes. Where arbitration boards are established, they usually include representatives of both workers and employers. In the case of both individuals and boards, ad hoc arbitration raises the question of how to identify appropriate arbitrators for particular disputes as they arise (see Establishment, functions, composition and operation of disputes settlement institutions below).

Governments may also establish permanent arbitration tribunals, courts or other bodies. The administrative support for such bodies is often provided by the same services which support conciliation machinery, although they may also have their own administrative services.

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Voluntary arbitration

Many systems of dispute settlement established by legislation make provision for the voluntary submission of disputes to legally binding arbitration, which is the most widely used form of arbitration. There are several ways of encouraging and promoting voluntary arbitration, inluding:

  • giving it a statutory basis;
  • making arbitration awards legally binding on the parties;
  • providing machinery and facilities for arbitration;
  • providing that a conciliator should endeavour to persuade the parties to submit the dispute to arbitration if conciliation is unsuccessful; or
  • empowering the conciliator to arbitrate a dispute with the consent of the parties.

Where legislation makes provision for voluntary arbitration, it normally requires the agreement of the parties to submit the dispute to arbitration. This may be at any stage of the dispute after the competent authority is cognizant of it or, as is commonly provided, if conciliation is unsuccessful. Or this may simply be left to the parties to determine as part of the content of their collective agreements.

In some countries, the legislation requires the conciliator or another authority to submit the dispute to an arbitration procedure (thereby making arbitration compulsory at its initial stage), although the parties retain the right to reject the award or decision within a given period after it is issued, thereby imparting a voluntary character to the award or decision.

Legislation establishing voluntary arbitration procedures may provide for the submission of disputes to the arbitration body by:

  • joint request of the parties; or
  • by the conciliation body with the consent or at the request of the parties; or
  • by the conciliation body or other authority, subject to the right of the parties to reject the award after it is issued.

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Compulsory arbitration

Arbitration is compulsory when the dispute may be submitted for arbitration without the agreement or consent of all the parties involved in it (whether at the initiative of one of the parties, the government or an independent agency), for the settlement of the dispute by a legally binding award. It should be recalled that compulsory arbitration in interests disputes is controversial, as it is usually associated with restrictions on the right to strike and limits the freedom of the parties to bargain collectively. Moreover, it is commonly assumed that compulsory arbitration undermines collective bargaining and diminishes the willingness of the parties to accept the compromises that are necessary for effective collective bargaining.

Careful consideration should therefore be given to whether the policy reasons for introducing compulsory arbitration are sufficient to override the obligation and undeniable value of promoting collective bargaining. Moreover, as the success of compulsory arbitration in most countries depends on the general support that it receives from the parties, consultations should be held with the social partners before instituting such a system.

Compulsory arbitration of interests disputes is rare in the private sector in industrialized countries, although not uncommon in the public service. In many developing countries, compulsory arbitration is applied in essential services and sometimes in cases of public emergencies. In some of these countries, more general systems of compulsory arbitration have been developed on the grounds that trade unions are not strong enough to engage in successful collective bargaining and with a view to averting work stoppages which such countries consider that they can ill afford.

Compulsory arbitration systems of limited application. Many compulsory arbitration systems are of limited application. They may apply, for example, only to disputes in essential services or in situations of public emergency, in which cases the competent authority may have the authority to refer disputes to compulsory arbitration (see Chapter II).

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Some systems of compulsory arbitration are of general application. In such cases, the legislation provides for the automatic referral of disputes after the failure of conciliation or any other method for the voluntary settlement of the dispute. In other cases, the legislation provides that disputes must be submitted to compulsory arbitration at the behest of the competent authority or on the application of either party to the dispute. However, it should be emphasized that such provisions are considered by the ILO’s supervisory bodies as constituting violations of the principles of freedom of association, as they generally entail a prohibition of strike action and are in vilation of the principle of voluntary collective bargaining (General Survey, 1994, paras. 254-259).

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Arbitration procedures

In the case of voluntary arbitration, the legislation normally requires the agreement of the parties to submit the dispute to arbitration. However, in some countries the conciliation officer or another authority may or must submit the dispute to arbitration, although the parties are free to reject the arbitration award. In the absence of such rejection within a given period, the award becomes binding.

Arbitration procedures are usually more formal than those applying to conciliation. Nevertheless, the rules of procedure for arbitration generally seek to ensure that cases are dealt with speedily and that the proceedings are kept simple, especially by avoiding the formalities, technicalities and legalism of judicial proceedings.

The respective legislation commonly provides that arbitration boards, arbitration bodies or arbitrators, as the case may be, should act in interests disputes in accordance with justice, equity or fairness, good conscience and the substantial merits of the case. They also commonly provide arbitration bodies with certain powers of investigation, which may include:

  • the power to require the submission of evidence in writing;
  • the power to require the attendance of witnesses for the purpose of giving evidence;
  • the power to require the production of books and records;
  • the power to call on the services of experts in financial or other matters.

While in practice these powers may be invoked at the instance of a party to the dispute, they may also be exercised by the arbitration authority at its own initiative.

It is often desirable to require the arbitration body to indicate its reasons for reaching a decision. If the award is legally binding, the provision of the reasons for the award can help to make it more acceptable to the parties and provide a more satisfactory basis for the settlement of the dispute. The requirement that the reasons for a decision be indicated is particularly important in systems where an award may be subject to appeal or judicial review. A further reason for requiring an arbitration body to give reasons for its decision arises in cases where the legislation lays down criteria for making awards. In such cases, the provision of reasons reveals whether or not the criteria have been properly taken into account. On the other hand, it may also be appropriate to leave this issue to the arbitration body itself.

One of the main reasons for using arbitration, and particularly compulsory arbitration, is to avoid the delays usually associated with judicial procedures. One of the main causes of such delays is the filing of appeals. To avoid this, arbitration awards in interests disputes (at least, as regards the determination of the merits of the dispute) are final and cannot be appealed in a large number of countries. Conversely, specific provision may be made for the parties to be able to appeal against arbitration awards on points of law or issues relating to the authority of the arbitration body itself. Another approach is to allow the arbitration body to seek opinions on questions of law at its own initiative.

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Establishment, functions, composition and operation of dispute settlement institutions

There are many different ways of establishing dispute settlement institutions, identifying appropriately qualified individuals to serve on such bodies and selecting or appointing the individual or individuals to conciliate or arbitrate any specific dispute. The wide variety of practices reflects different national traditions and practices. However, it is important to bear in mind a number of general themes relating to the legislation establishing dispute settlement systems.

The basic questions are whether dispute settlement bodies should be tripartite or not and whether they should be ad hoc or permanent. The choices made may differ for bodies responsible for conciliation, mediation, arbitration and adjudication. In the case of conciliation, they may be composed of independent persons or ministry officials (perhaps with some members from trade unions or employers), while mediation or arbitration bodies may be tripartite and labour tribunals may be made up of independent judges. The governing bodies of a conciliation/mediation/arbitration body may be tripartite in composition and the personnel drawn from all backgrounds. All of these various solutions are to be found in different countries.

There are several benefits of tripartite representation in such institutions. First, the parties to disputes often have greater confidence in tripartite structures. Secondly, the involvement of representatives of workers and employers in the dispute settlement process serves to enlist the practical knowledge and experience of the employers and workers themselves for the settlement of labour disputes.

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Establishment and functions of dispute settlement institutions

The functions of permanent dispute settlement institutions may cover the settlement of one or several types of disputes. In some cases, they may also be assigned broader educational and advisory roles.

In some countries, a basic distinction is made between the conciliation services provided either by officers of the ministry responsible for labour or by a separate conciliation service, and adjudication by labour courts or tribunals or ordinary courts. In contrast, arbitration is generally undertaken by individuals or bodies set up on an ad hoc basis. In these countries, the different roles are precisely defined, although conciliation officers may have an advisory role in rights disputes before they are referred for adjudication by the courts.

In other countries, independent dispute settlement bodies have been established which centralize the functions of conciliation, mediation and arbitration, although the parties remain free to have recourse to mediators and arbitrators of their own choice. These bodies also normally play an educational and advisory role.

In still other countries, while conciliation may be left to the officers of the labour ministry, the arbitration and adjudication of labour disputes are assigned to an industrial relations or arbitration tribunal or court.

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Appointment of members of dispute settlement institutions

Broadly speaking, there are three ways of appointing the members of dispute settlement institutions, including the establishment of lists or panels of conciliators and arbitrators who can be chosen for ad hoc procedures. Two of these methods associate workers’ and employers’ representatives in the selection of such persons:

  • they may be appointed by the State (by the competent authority, the Minister, a labour commissioner or the President), in accordance with statutory criteria relating to age, qualifications and experience in the field of labour relations;
  • they may be nominated by workers and employers, by workers' and employers' organizations directly, by the most representative organizations of workers and employers, by organizations determined by the competent authority or the Minister to be representative, or by the representatives of the interests of workers and employers on an established national tripartite institution;
  • they may be appointed by the State from among persons nominated by workers and employers, usually through their most representative organizations, or the organizations determined by the competent authority or the Minister as being representative.

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Selection of persons to settle specific disputes

Where dispute settlement is to be carried by members of an institution or by individuals selected on an ad hoc basis for the purpose of conciliating and/or arbitrating a particular dispute, there are again three broad ways of identifying the persons involved, two of which involve the parties themselves:

  • the persons may be selected by the parties themselves, perhaps from pre-established lists or panels. There may be a single list, different lists of individual representing workers and employers, as well as in some cases a list of independent persons. Where a single person is to be selected and no agreement is reached, some method of resolving the issue is needed, such as selection by the head of the institution or a public authority.
  • the persons may be designated by the State, or more specifically by the competent authority, which may be the dispute settlement institution, a labour commissioner or inspector or a labour tribunal.
  • the persons may be designated by the competent authority from among individuals nominated by the parties. The parties may select possible candidates from previously established lists or panels of suitable persons. In some cases, such panels may be established within already existing conciliation or arbitration institutions.

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Status of dispute settlement personnel

It is important to take appropriate steps to ensure that dispute settlement institutions are independent and that their members are seen to be persons of appropriate standing and moral authority.

A common way of ensuring the independence of dispute settlement institutions and their members, at least those who are not ad hoc members for the purpose of specific disputes, is to appoint the members on a permanent basis and to protect their employment in the same way as civil servants.

The internal structure of dispute settlement institutions is also important in marking their independence and ultimately their moral authority to engage in the settlement of disputes. This can be done, for example, by creating senior positions for the personnel of such bodies, such as a president or vice-president. These persons can be given responsibility for running the institution, including the allocation of disputes among the members, and can also be responsible for the performance of conciliation or arbitration in particularly significant or difficult disputes.

A final matter to be taken into account which can also strengthen the independence and authority of dispute settlement institutions consists of the qualifications required for the more senior personnel. For example, the head and senior members of compulsory arbitration bodies are commonly accorded a status similar to that of judges, and may need the same experience and qualifications as judges to be eligible for appointment.Requirements of this nature help to invest the officers and their institution with a certain moral authority.

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Dispute settlement procedures and the right to strike

One of the main justifications for requiring the parties to refer labour disputes to dispute settlement mechanisms is to prevent industrial action in view of the the adverse social and economic effects that it can have in the wider community. This is sometimes reflected in a legislative "peace obligation".

At the same time, it must be borne in mind that the right to take industrial action, and particularly the right to strike, is a fundamental corollary of the right to organize (see Chapter II). It is therefore essential to achieve an appropriate balance between the benefit of resolving disputes peacefully and respect for the autonomy of the parties to engage in collective bargaining, supported by the fundamental right to take industrial action in support of their economic and social interests.

In practice, labour dispute settlement mechanisms may be linked to limitations on the right to take industrial action in several ways. The legislation may require the parties to give advance notice of any planned action to a conciliation authority. In addition, the parties to disputes might be required to attempt to resolve their dispute through conciliation as a precondition to the exercise of their right to take direct action. In such cases, industrial action is only legal once the parties have completed this step.

The question of which labour disputes may properly give rise to the right to take direct action offers another link between labour dispute settlement procedures and industrial action. It is usually only disputes about interests that are left to the parties to resolve for themselves through the use of their industrial strength where they deem it necessary. Direct action is not generally permitted in the case of rights disputes that are to be resolved by adjudication.

However, in accordance with the principles of freedom of association, disputes about interests should not be so narrowly defined as to prevent solidarity strikes or strike action on broad economic and social issues (see Chapter II).

1. In addition to legislative texts and ILO instruments, the sources used in the preparation of this chapter include: ILO, Date, place and agenda of the 89th Session (2001) of the Conference, Document GB.274/3 (ILO, Geneva, March 1999), paras. 123 to 189; Blanpain and Engels (eds.), Comparative labour law and industrial relations in industrialized market economies, 6th and revised edition (Kluwer International, 1998); Labour relations in industrialized market economy countries: An introduction (ILO, Geneva); Conciliation and arbitration procedures in labour disputes: A comparative study (ILO, Geneva, 1980); A. de Roos and R. Jagtenberg, Settling labour disputes in Europe (Kluwer, 1994); and Guide to international labour standards on industrial relations (ILO, Budapest, 1998). Other useful references include: Grievance arbitration: A practical guide (ILO, Geneva, 1989), Voluntary arbitration of interest disputes: A practical guide (ILO, Geneva, 1984); and Conciliation in industrial disputes: A practical guide (ILO, Geneva, 1988).

Updated by MB. Approved by AB. Last Updated 10 December 2001.