The Arbitration Council is an independent body whose function is to resolve collective labour disputes that could not be resolved by conciliation. The Council was established in 2003 according to the provision of the Labour Law (1997).
The Arbitration Council has a tripartite structure. This means that the Council is comprised of Arbitrators nominated by unions, employer associations, and the Ministry in charge of Labour. By law, the council has at least 15 Arbitrators. At present, 30 Arbitrators are appointed by the Prakas.
The Arbitration Council hears collective labour disputes. A collective labour dispute is “Any dispute that arises between one or more employers and a certain number of their staff over working conditions, the exercise of the recognised rights of professional organizations, the recognition of professional organizations with the enterprise, and issues regarding relations between employers and workers, and this dispute could jeopardise the effective operation of the enterprise or social peace.” (Article 302, Labour Law 1997)
The Council can hear rights disputes and interests disputes. A right dispute relates to the existing legal rights of the parties. An interests dispute is one which relates to a future benefit and not to a legal right. For example, a rights dispute would exist where the parties disagree about the implementation of the Labour Law or a collective agreement. An interests dispute exists where parties disagree about a future benefit such a pay rise to which there is no legal entitlement.
If the parties to a collective dispute cannot reach agreement through negotiation or conciliation, the conciliator will refer the dispute to the Arbitration Council through the Ministry in charge of Labour.
Three Arbitrators are selected to decide a dispute. They are called Arbitration Panel. The Panel represents the Arbitration Council and is responsible for making decisions and order to settle a dispute between parties.
Each party must choose an Arbitrator from their list to hear their case. The two Arbitrators that were chosen by the parties will then choose a third Arbitrator. The Arbitration Panel consists of these three Arbitrators. The Arbitration Panel must be formed with three days. The Arbitration Panel must then provide an Arbitral Award within 15 days, unless both parties agree to an extension of time.
In cases of rights disputes, the Arbitration Panel will decide according to the law. In cases of interests disputes, the Arbitration Panel will decide according to the principles of equity or fairness. Before any Arbitral Award is made the Arbitration Panel will invite parties to attend a hearing in order to present their cases. The Arbitration Panel will also try to encourage the parties to settle their case by agreement
No. It is illegal to have a strike or lockout while a dispute is undergoing conciliation or Arbitration. A strike or lockout can generally be conducted if one party rejects the Arbitral Award of the Arbitration Panel, or if the Arbitration Panel fails to comply with time limits imposed on it by the law.
An Arbitral Award is the decision of the Arbitration Panel. The Panel will try to make decision by consensus but it will make majority decisions if consensus is not possible. In any event, all three arbitrators must sign the Award. A certified copy of the Award must be provided to the Minister in charge of Labour and to both parties. Awards are available to the public from the Secretariat of the Arbitration Council and online at www.arbitrationcouncil.org
Before the Council issues an Arbitral Award parties must decide if they want binding or non-binding arbitration. If both parties decide to have binding arbitration, they will have no right to oppose the Award; the will be enforceable and the parties will be bound to implement the award immediately. If one or both parties do not agree to binding arbitration, the Arbitral Award will be non-binding. This means that either party has the rights to oppose the Award. If one party lodges an opposition, the Arbitral Award will be nullified and it will not be enforceable. If there are no oppositions, the Award then will be enforceable and the parties will be bound to implement it.
An opposition to an Arbitral Award must be lodged within eight calendar days of a party receiving the certified copy of the Arbitral Award. Oppositions lodged after eight calendar days will not be accepted. To lodge an opposition the party must notify the Arbitration Council Secretariat in writing or complete a form at the office of the Secretariat. Once an opposition is lodged the Arbitral Award is not enforceable and both parties have the right to strike or lockout. In the case of a rights dispute the parties also have the option of going to court to have their dispute resolved.
The Secretariat of the Arbitration Council is a body established by the Prakas, and which provides administrative support to the Arbitration Council. Parties to a dispute will have no direct contact with the Arbitration Panel except on the day of the hearing. All communications and enquiries should be directed to the Secretariat.