Labor Arbitration Procedures in the United States and China: A Comparison - Essay Example

Comparison of Labor Relations between United s and China Labor arbitration procedures in the US and China: A comparison. Introduction Labor arbitration refers to the reference of disputes between management and labour unions to an impartial third party for a final resolution and it is usually the last step under a collective-bargaining agreement after all other measures to achieve a settlement have been exhausted.  Every organization has its own workplace problems, and in the event these problems occur, they should be addressed in a manner that is acceptable to both the employers and the unions. Moreover, most workplace problems can be reduced or prevented if the different parties engage in some form of formal or informal dialogue or discussion with one another. According to Fossum (2006), providing an avenue for complaints while facilitating production activities to continue within the organization is one way of increasing productivity. Prosperity of any organization significantly depends on the productive use of its human capital. This dependence can best be upheld by maintaining a workplace that is peaceful and free of labor disputes. Hence, this paper sets out to do a comparison of the established arbitration procedures between the United States and China. Arbitration Systems In china, the roles of the Arbitration Committee and the Arbitration Court are ambiguous and ill-defined. As Xinjiletu, Jenks & Weihong (2008) notes, the ambiguity is brought about by the arbitration law which still allows that disputants who do not agree with the arbitration agreement to petition the people’s court or the arbitration committee to make a verdict. This duality in jurisdiction implies that the actual decision maker in labor disputes is not clearly defined, and chances are high that such ambiguity could cause problems when it comes to settlements. Moreover, according to Fox, Donohue & Wu (2005), Chinese arbitration processes are normally conducted by three arbitrators with no stipulations that they be experts on the disputed issue. The parties in dispute also do not have the liberty to pick their own arbitrators since these are normally appointed by an arbitration committee. This makes the entire process open for outside or political influence, in addition to this, there is the chance that wrong decisions can be arrived at due to lack of expertise. This is unlike the US system. In the United States, labor arbitration comes about as a result of collective bargaining agreement and is in itself a quasi-judicial process in which all the parties agree to forward disputes they cannot resolve to a neutral third party for a binding settlement. A major tenet of U.S labor arbitration is that a qualified and highly competent third-party neutral will be able to look at the disputed issue objectively and come up with a reasonable solution based on the merits of the dispute. Since most U.S. arbitrators are certified only after meeting strict and rigid standards set by various governmental and non-governmental agencies, both employers and unions generally consider the arbitration process conducted by them to be an appropriate mechanism for dealing with workplace disputes and the recommendations are final and binding. The US system further allows for parties in the dispute to choose their own arbitrators, this is usually done from a pool of five well trained professionals, with extensive experience on the issue under arbitration. The arbitrators are normally provided by an agency. The parties have a say on which agency will provide the arbitrator and the qualifications of that arbitrator. Government Involvement Within Chinese dispute arbitrations, government intervention is prevalent at all levels of the dispute procedure, thus increasing the chances that the outcome might be less favorable for workers than it should otherwise be. Although the arbitration law of 1994 states that economic, legal and trade experts and people with extensive working experience shall hold at least two-thirds of the arbitration commission, the same law still allows the peoples government to form arbitration commissions by constituting relevant departments (Xinjiletu, Jenks & Weihong, 2008). This in essence gives the government covert administrative powers over the establishment of the arbitration panels, thereby providing the leeway for political influence over the operations and decisions of arbitration committees. Such governmental influence and interference more often do not serve the best interests of the workers and, may in the long run constitute a basis for unnecessary and continual workplace unrest. In the American context, the government has no jurisdiction over arbitration issues as arbitrators are considered professional and competent enough to handle all issues in this field. In fact, according to Carrell & Heavin (2007) even the Supreme Court acknowledges that arbitrators are the people best suited to resolve dispute under collective bargaining. The government hence plays no direct role in the dispute resolution mechanism. Trade union concerns According to Zhang-White and Shi (2005), the process of arbitration in China today is not well supported by the trade union movement since more often leaders of these trade unions do not enjoy job protection, and their main responsibility is basically to smooth relations. It has been suggested that increasing cases of labor unrest in Chinese workplaces is the result of either absence of trade unions or weak trade unions who cannot advocate for worker rights. Even though trade unions exist, they do not support a broad spectrum of employee interests and more often they are not elected by workers and are also not actively involved in the formation of collective bargaining agreements. In the United States, labor unions are extremely powerful in agitating for the rights of unionized workers. They support a broad spectrum of employee interest and union leaders are directly elected by the workers they represent. They are also directly involved in the formation of collective bargaining agreements and also enjoy job security courtesy of being employed by the workers. Social factors Majority of Chinese workers are illiterate and hence labor, arbitration and trade union laws as they are presently, need to be explained to them so that they can understand better. The illiteracy rate in Beijing and other metropolitan areas is estimated to be about 12% , while in the rural areas, the rates are as high as 40% (Lin, 1997). The obvious outcome in this scenario is that workers cannot determine things like overtime payments, read laws and regulations, fill out applications and generally experience difficulty in knowing their rights when it comes to contracts. Additionally, high prevalence of illiteracy hampers access to educational materials relating to workers rights resources. This contrasts sharply with the United States where high levels of literacy have ensured that workers have access to the latest educational materials relating to workers rights, labor laws and arbitration laws. This is further strengthened by strong unions that advocate for the rights of workers and also create awareness among them. Handling of international arbitration disputes According to Zhou (2006), Chinese law differentiates international arbitration cases from domestic ones and treats them differently. Generally in china, parties to international arbitration cases have greater freedom from governmental interference and also greater autonomy with judicial review being limited to issues of procedure. Whereas domestic arbitration reviews looks at substantive issues only, Chinese laws also distinguish arbitration institutes into international and domestic bodies with international arbitration institutes handling most international arbitration disputes. Furthermore, international arbitration is offered different procedural rules by Chinese arbitral institutes and greater autonomy than domestic cases. In the United States, the law does not clearly differentiate between domestic and international arbitration. Both the state and federal courts have the liberty conduct to arbitration disputes involving foreign elements. Additionally, arbitration in the United States is regulated at both state and federal levels and according to Besson (2000) may be heard in both state and federal courts. In a nutshell, international arbitration disputes are not accorded any privileges in the American context and are just treated the same as domestic cases. Integrating mediation with arbitration In the Chinese system, mediation is more often integrated with arbitration in order to come up with a favorable outcome. Mediation with its long history in china emphasizes amicable resolution of disputes and avoids confrontation in line with the Confucian values that have dominated political philosophy in pre-Communist China since time immemorial. This is because for the Chinese, disputes are considered unnecessary and evil in that they disturbs the harmony that governs all of social life. The Chinese believe that if it is impossible to avoid a dispute in the long run, it is imperative for the parties involved in the arbitration dispute either by themselves or with the aid of a mediator identified by them, to take the necessary steps in the early stages to amicably remove the root causes of the potential dispute. The American system does not at any point involve mediation in the process of arbitration, it is generally considered that the role of the mediator and arbitrator are incompatible and hence the two processes should be kept separate. Conclusion Generally, no country can claim to have the best arbitration system in the world because the dynamics and underlying factors in labor disputes vary across countries. The American labor arbitration process though not the best presents a more reasonable procedure for alternate dispute resolution. It helps in providing finality to workplace disputes and is generally less expensive compared to litigation. On the other hand, Chinese labor relations present plenty of weak points and can be enhanced by the strict enforcement of the existing labor laws and also the application of new, more protective laws especially related to workers representation. There ought to be a balance of power between the employers and the workers so that the workers are not disenfranchised. Other nations can borrow a leaf from china when it comes to arbitration being integrated with mediation as an alternative dispute resolution method, as it may present a way of improving efficiency in dispute resolution. References Arbitration Law of 1994. Retrieved Nov 25, 2014, From http://www.lehmanlaw.com/resource-centre/laws-and-regulations/civilproceedings/arbitrationlaw-of-the-peoples-republic-of-china-1994.html Besson, S. (2000). The Utility of State Laws Regulating International Commercial Arbitration and Their Compatibility with the FAA. Am. Rev. Intl Arb., 11, 211-607. Carrell, M. R., & C. Heavrin (2007). Labor relations and collective bargaining. Upper Saddle River, NJ: Prentice Hall. Fossum, J.A. (2006). Labor relations – Development, structure, process. New York, NY: McGraw-Hill Irwin. Lin, S. (1997). Education and economic development: Evidence from China. Comparative Economic Studies, 39(3), 66–86. Ruben, A. M. (Ed.). (2003.). How arbitration works (6th ed.). Washington, D.C: BNA Books. Xinjiletu, Y., Jenks, C. F., & Weihong, h. (2008) A comparison of labor arbitration procedures in the US and China. Mountain Plains Journal of Business and Economics, 9. Zhou, J. (2006). Judicial Intervention in International Arbitration: A Comparative Study of the Scope of the New York Convention in US and Chinese Courts.Pac. Rim L. & Poly J., 15, 403. Read More