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A method of dispute settlement in which an independent third party (e.g. industrial or labor tribunal) considers the arguments of both sides in a dispute and then makes a decision that is legally binding on the parties. "The difference between arbitration and other forms of dispute settlement such as mediation or concilition (where an arbitrator attempts to find a compromise) is that in arbitration decisions are legally binding.'' Some commentators advocate arbitration as a safety valve to avoid lengthy disputes. Others see merit in both and encourage parties to use mediation prior to arbitration.      Many national regulatory systems require dispute settlement provisions to be incorporated in industry/workplace agreements and labor contracts. Arbitration driven dispute resolution may result in a larger number of short work stop pages whereas mediation is likely to result in a smaller number of strikes that may occur for longer periods as each side attempts to gain the upper hand. However, the actual effectiveness of either approach is difficult to demonstrate. Hospitality and hotel employers generally join employer associations (such as hotel associations) that represent their interests during arbitral proceedings in industrial tribunals, though larger hotels are increasingly using their own internal HRM departments to conduct tribunal work.

Davis, E. (2001). Australian Master Human Resources Guide 2002. Sydney, Australia: CCH Australia Ltd.
Woods, R. H. (2002). Managing Hospitality Human Resources. Educational Institute, East Lansing, Michigan: American Hotel & Lodging Association.


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