Question

On December 8, 1986, because of a severe business downturn, Ingram Manufacturing Company laid off 61 bargaining unit employees at plant no. 28. Then on June 12, 1987, the company subcontracted with Monroe Manufacturing Company for 49 wheels. Monroe Manufacturing Company was to fit, weld and machine the core of the wheel according to Ingram Manufacturing Company’s design. The local union representing workers at plant no. 28 has decided to file a grievance, alleging that the Company has violated the collective bargaining agreement by subcontracting work while employees are on layoff.

1. To settle this matter, the union and Ingram Manufacturing Company are deciding whether to hire a permanent arbitrator to handle this grievance and future grievances, or an ad hoc arbitrator. Evaluate the merits of each kind of arbitrator.

Answer 1

A collective bargaining agreement refers to the labor agreement under which a trade union represents the worker in the meeting with the employer and decided various terms and condition of the contract such as wage rate, employee type, responsibilities, benefits and compensation, and so on.

In the given case, the local union filed a grievance against Ingram Manufacturing Company for violating the collective bargaining agreement. Labor disputes are very common in various industries; therefore, it has to be handled by hiring a permanent experienced arbitrator under this category.

A permanent arbitrator is a person that deals with legal disputes of a company for a long-term period that provides a fair resolution of the conflicts. On the other hand, Ad hoc arbitrator is a person who is hired by any institution for dealing specific dispute or conflicts of an organization.

Merits of the permanent arbitrator:

• A permanent arbitrator can better understand the dispute as he knows the company activity better than any new arbitrator.
• A mutual understanding of the parties usually hires a permanent arbitrator; therefore, there is more reliability on his decision.
• It is less time consuming to solve any dispute as it saves time to hire a new arbitrator.
• There will be a lesser cost of hiring permanent arbitrator, and so on.

Merits of Ad hoc arbitrator:

• An ad hoc arbitrator will be hired when parties need a specialized third party who can understand the situation by using his specialization.
• He will provide an independent decision as he offers equal chances to both the parties.
• Ad hoc arbitrator has better knowledge than a permanent arbitrator in a specific field, and so on.