Letter: Conciliation, Mediation and Arbitration: Principles and Practice


Dear Editor,

In the field of industrial relations, effective means of settlement of labour disputes have evolved through third party interventions, namely conciliation/mediation, adjudication by way of arbitration, and labour courts or other judicial means of settlement. Since conflicting demands in industrial relations often result in disputes, it is important to utilize methods of dispute settlement. These “should aim at peaceful and orderly settlement of disputes so as to make it unnecessary to resort to strikes and lockouts” or other forms of industrial action.

Conciliation, mediation, and arbitration are valued dispute resolution methods used in the settlement of industrial disputes and have special significance for the social partners. These methods have been frequently and intensively utilized in industrial relations and have been permanently established in many countries with a long tradition and history of success. Conciliation/mediation and arbitration have also been used in the field of international relations, civil society, family and community relations, and in the commercial world in place of costly and time-consuming litigation. Frequent and prolonged labour disputes could have a negative impact on industrial growth, economic development and overall socio-political stability of any country. Effective and improved dispute settlement procedures and machinery are crucially important for the national economy and the general good of the population.


Conciliation/mediation in industrial disputes, whether it is a dispute of interest or a dispute of rights, is an essential process in the field of industrial relations. The conciliation process seeks to encourage disputing parties to discuss their differences with a view to assisting them to develop their own proposed solution, as an extension of negotiations. The ministry/department of labour in the English-speaking Caribbean, as in many other countries, is the principal third party dealing with individual and collective labour disputes and provides a free, voluntary conciliation service. The Dutch-speaking countries in the Caribbean provide this service through a state-funded independent mediation service.

The Ministry of Labour/Department of Labour, or a mediation service embodies the concept of non-political conciliation/mediation and must maintain a role of non-partisan conciliation/mediation if it is to enjoy the confidence of the social partners. It must function with credibility, impartiality, professionalism, and integrity whether or not the service is located within or outside the ministry of labour.

From the ILO perspective, “conciliation and mediation are regarded as equivalent terms referring essentially to the same kind of third-party intervention to promote voluntary settlement of disputes” .Technically, conciliation is limited to encouraging employers and unions in developing their own proposed solutions through rational discussion of their differences. Mediation, on the other hand, is a stronger form of third party intervention in which the mediator can offer to the parties, proposals for settlement of any industrial dispute. In practice, however, the technical distinction is blurred or disappears as both words are used interchangeably in some countries to express the same process of third-party intervention.

In some other countries, the two words – conciliation and mediation – denote different forms of intervention for voluntary settlement of disputes in which mediation is the stronger form of third-party intervention than pure conciliation. The Dutch-speaking Caribbean countries use the term “mediation.” It should be noted that ILO guidelines use conciliation and mediation interchangeably, while at same time recognizing distinct national practices in the use of these words. “Conciliation can be described as the practice by which the services of a neutral third party are used in a dispute as a means of helping disputing parties to reduce the extent of their differences and arrive at an amicable settlement or agreed solution. It is a process of rational and orderly discussion of differences between the parties to a dispute under the guidance of the conciliator.”

“As a process of peace-making in industrial relations, conciliation aims to bring about the speedy settlement of disputes without resort to strikes or lockouts, and to hasten the

termination of work stoppages when these have occurred. The steps that a conciliator may take to bring about an amicable settlement vary from one country to another, but always the function is to assist the parties towards a mutually acceptable compromise or solution”.

The use of the conciliation/mediation service may be required by law, and/or by a collective labour agreement, or at the intervention of the conciliation/mediation service. This is usually the procedure required before resorting to adjudication through arbitration or labour court for final settlement. In the Caribbean, the conciliation/mediation services are state institutions/state-funded institutions and agencies, which provide free services to employers and unions.

Conciliation and Collective Bargaining

ILO notes that “The practice of conciliation in industrial disputes has developed mainly in connection with disputes arising from the failure of collective bargaining, i.e. the negotiations between the parties with a view to the conclusion of a collective agreement. Conciliation has thus been described as an extension of collective bargaining with third-party assistance, or simply as “assisted collective bargaining”(

The ILO uses the following definition for conciliation/mediation in its training manual:

“Conciliation/mediation is ideally a voluntary process in which the services of an acceptable and independent third-party are used in a conflict as a means of helping

the parties to arrive at an agreed outcome”.

The Conciliator/Mediator:

The Conciliator/Mediator is not an arbitrator and cannot substitute his/her judgement for that of the parties. The conciliator/mediator cannot impose a settlement; it is for the parties to agree to a solution under the guidance and skill of the conciliator who must maintain a strictly impartial and neutral attitude towards the two parties. The conciliation function requires independent judgement, and a conciliator should not be swayed by external pressures. The conciliator must endeavor to bring about an agreement. However, if it is not possible to obtain agreement, the conciliator should persuade the parties to agree to submit the dispute to binding arbitration or to another procedure for dispute settlement in keeping with the national law or practices in the process of conflict management


Arbitration is another type of third party intervention. It is the stage which, in the context of the usual grievance representation procedure, is expected to follow closely upon an impasse or failure at conciliation to resolve a dispute. However, arbitration need not await the failure of the conciliation process in situations where a dispute can have a severe social and economic impact, or where a prolonged dispute in a major industry/service could severely affect community life or where the ongoing operation of an industry is necessary to sustain the national economy. In such cases, some states are empowered to refer the dispute to compulsory machinery such as arbitration, industrial tribunal or the labour court as a means of resolving the disputes.

Arbitration, industrial tribunal and labour court, like conciliation, involves third party intervention in the collective bargaining process. In conciliation, however, the conciliator is expected to use his powers of persuasion in order to enable the parties to narrow the areas of differences between them with a view to reaching acceptable solutions. In arbitration, industrial tribunal and labour court proceedings, the arbitrator, or the adjudicator/judge is required to decide the issue on the merits of a case presented by the parties and make an award (tribunal) or judgement (court). Such an award or judgement is final and binding on the parties involved in the dispute, and they are expected to give effect to that award/judgement in the tradition of industrial relations practice.

In general, when an employer recognizes a trade union as the sole bargaining agent of the workers in any undertaking, the parties usually sign a collective agreement for recognition and avoidance and settlement of disputes. Embodied in that recognition agreement is the grievance procedure in which the various stages through which a grievance/dispute can be processed are outlined.. In most cases, it provides for arbitration as the final stage for the resolution of disputes. But there are, within industrial relations practice, several means by which the stage of arbitration could be reached. In some agreements, either party may request that the matter under dispute should be taken to arbitration; if this happens, the other party has no option but to comply. In others, arbitration can only take place with the mutual consent of parties; and once one of the parties refuses to consent to arbitration, no arbitration proceedings can take place. The law, in certain situations, provides for arbitration or reference to an industrial tribunal, or a labour court with which the parties must comply. In collective agreements, there are two types of arbitration provisions:

  • Voluntary arbitration — where the consent of both parties is required to set the machinery for arbitration in motion, and ask an independent and acceptable third party to hear both sides and consider the dispute and make an award, which by prior agreement would be final and binding and

–     Compulsory arbitration:

(a)  Where the collective labour agreement provides for the matter to be referred      to    arbitration at the request of either party;

(b)   Where the State may consider it necessary to ensure that services deemed to be essential are not unduly interrupted by work stoppages resulting from industrial disputes. In this case, the State can refer a dispute to compulsory arbitration or to an industrial tribunal, as applicable in national law, for final resolution of any such disputes. Adjudication through arbitration or industrial tribunal reflects the rights approach, and makes final awards which are binding on all the involved parties.

Yours faithfully,

Samuel J. Goolsarran


This site uses Akismet to reduce spam. Learn how your comment data is processed.