LABOUR LAWS AND ALTERNATIVE DISPUTES RESOLUTIONS

UNIT 1 SECTION
INDUSTRIAL 6
RELATIONS Unit 1, section 6: Alternative disputes resolutions

The Labour Act has made provisions as to how industrial disputes may be
resolved using mediation and arbitration. The Arbitration and Mediation
Service can resolve disputes arising between employees and employers
when negotiation between the two parties fails. In order to have a dispute
resolved via arbitration or mediation both parties must agree, and endorse
the appointed mediator or arbitrator.

The main objective of this session is to introduce students to the two main
dispute resolution alternatives. After a successful completion of the session,
the student is expected to:
 Understand the general principles underlying mediation and arbitration;
 Be abreast with the legal framework within which mediation and
arbitration can be carried out.

Meaning of Mediation
Mediation is a process by which a disinterested third party facilitates
communication between those in dispute to assist them in developing
mutually acceptable agreements to improve their future working
relationship. Mediators are skilled at facilitating discussions between the
parties and helping them to identify issues and potential solutions. They
often meet with each person in advance to understand the issues from each
person’s point of view before the mediation process where the two parties
can meet face-to-face. Mediation is voluntary and the mediator has no legal
right to force one party to accept a solution. A decision on mediation is not
binding; all parties must consent to participate in good faith and work
toward a mutually agreeable resolution. However, once reached, such a
decision can be made binding if the parties decide to draft a contract called a
settlement agreement. In order to encourage settlement, the mediation
session is conducted on a “without prejudice” basis. This means that nothing
that is said or proposed during mediation forms part of the record if the
parties fail to agree and the matter has to proceed to adjudication. Mediators
perform the following functions:
 They help disputants to find the most acceptable solution to a problem
 They encourage both parties to identify the real issues
 They guide each party to explain the issues to the other
 They identify points of agreement between the two parties
 They convince both parties to seek a resolution that allows them to
move on.

Legal framework of mediation in Ghana

Section 153 of the labour Act, 2003 (Act 651) encourages the parties in an
industrial dispute to negotiate in good faith with a view to reaching a
settlement of the dispute in accordance with the dispute settlement
procedures established in the collective agreement or the contract of
employment. In the case of essential services, if the parties fail to settle the
dispute by negotiation within seven (7) days after the occurrence of the

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Unit 1, section 6: Alternative disputes resolutions INDUSTRIAL RELATIONS

dispute, either party or both parties by agreement may refer the dispute to
the commission, seeking its assistance for the appointment of a mediator.
Section 175 defines essential services to include areas in an establishment
where an action could result in a particular or total loss of life or pose a
danger to public health and safety and such other services as the Minister
may by legislative instrument determine. The commission shall appoint a
mediator only if she is satisfied that:
 The parties have exhausted the dispute resolution procedures established
in the collective agreement;
 The parties have failed to settle the dispute; and
 None of the parties has sought the assistance of the commission to
appoint a mediator

Where the commission observes that the parties have not exhausted the
procedures in the collective agreement or have not agreed to waive those
procedures, the commission shall order the parties to comply with those
procedures within such time as the commission may determine. Where the
parties agree to mediate and the end of the mediation proceedings there is
settlement of the dispute, the agreement so reached as regard the terms of
the settlement shall be recorded in writing and signed by the mediator and
the parties to the dispute. In this way, the settlement agreement is binding on
all the parties unless the agreement states otherwise. When no agreement is
reached at the end of the mediation, the mediator shall immediately declare
the dispute as unresolved and refer it to the commission.

Meaning of arbitration
When mediation fails and the dispute is referred to the commission, the
commission shall with the consent of the parties refer the dispute to an
arbitrator or an arbitration panel. This is called voluntary arbitration.

Otherwise, the parties involved may agree on the method of appointment of

arbitrators or the arbitration panel. In either case, the parties shall within
three (3) days after appointment of an arbitrator or the arbitration panel
submit to the arbitrator in writing a statement of the issues or questions in
the dispute signed by the parties or their representatives. The arbitrator upon
receipt of the documents from the parties, shall as soon as possible appoint a
time and place for the hearing and notify the parties. If any party fails to
appear before the hearing after the expiration of seven (7) days after being
so notified, the arbitrator shall proceed to hear the dispute and make a
decision which becomes binding on all the parties.

The labour Act has not defined the term arbitration. It only provides the
meaning of an arbitrator as one including a panel of arbitrators. However,
arbitration may be described in this text as a dispute resolution process in
which a neutral party (the arbitrator) hears a dispute between one or more
parties and, after considering all relevant information, renders a final

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decision in favor of one of the parties. Witnesses can be subpoenaed to

appear before the arbitrator, and evidence may be taken under oath.

Arbitration decisions may be either binding or non-binding, depending on

the terms of the arbitration agreement. Binding arbitration decisions may be
confirmed by a court and carry the same significance as a court judgment.
The decision of the arbitrator or a majority of the arbitrators shall constitute
what is known as an award. The award shall be binding on the parties. The
arbitrator is required to communicate the award in writing to the parties and
the commission within seven-two hours (72 hrs) after the award has been
made.

The main difference between arbitration and mediation is that in arbitration

the arbitrator hears evidence and makes a decision. Arbitration is like the
court process as parties still provide testimony and give evidence similar to
a trial but it is usually less formal. In mediation, the process is a negotiation
with the assistance of a neutral third party. The parties do not reach a
resolution unless all sides agree.

Mediation and arbitration are certainly the most well established and
frequently used alternative dispute resolution techniques in commercial and
labour disputes. Increasingly, parties to industrial relations are becoming
aware that the two techniques can help them resolve disputes quickly and
cheaply and more privately than the conventional courts. Moreover, many
people preferred ADR approaches because they saw these methods as being
more creative and more focused on problem solving than the courts. What is
more important here is that the student must grasp the legalities underlying
each technique.

Self-assessment questions
(1) Who is a mediator? What role does a mediator play in dispute
resolution?
(2) What are essential services? What three tests must be passed before a
person is appointed as a mediator in Ghana?
(3) What is voluntary arbitration? Explain the main difference between
mediation and arbitration.

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