Why do employers prefer Arbitration?

Why do employers prefer Arbitration?

11-Aug-2021 | Article by Legal White Official

Now a days, employers want their employees to sign an arbitration clause or an agreement. The most noticeable part of the contract is that, it is binding contract due to which the employees lose their right to file for litigation in case they are abused by their employers. Binding arbitration contract only gives the right to the employees to use arbitration as a method for dispute between employer and employee. It has been a matter of great concern to the employees for quite some time now due to the fact that, under arbitration, it is more likely that the employers win the decision in their favour. There is a common notion that, arbitration favours the powerful and in case of employee and employers, employers are of course more powerful. The reason as to why the companies or employers choose arbitration is because, they find it cheaper as compared to court procedure and the second reason is that, employers are more likely to win.

Employers also choose arbitration because it is less time consuming. It must be also mentioned that, the process of litigation is a formal process and is more complex and complicated. One has to abide by the rules of the court, this is also one reason employers don’t want court process and ask employees to sign the arbitration clause. Employers choose arbitration because unlike the court process, the cases are held in private, this is favoured by employers because there is less chance of getting any business-related information leaked outside to the public which might become detrimental to the business itself. On top of this, no evidence or testimony are made public, even the decision made by the tribunal is only announced to the concerned parties. Arbitration as a law gives the disputing parties freedom to select the arbitrators of their own choice by mutual consent. Due to this rule, employers have their preferred arbitrator who generally arbitrates in the dispute cases. This ensures that the decision is made in their favour.

Another reason as to why employers choose arbitration is because, the judge or the jury in the court have a sympathetic attitude towards the employee because the employee is considered as a small person in front of a big organization or a company. This is not the case in arbitration as the arbitrators generally keep their emotions aside and are focused on the facts and evidences.

There are several researches which shows that, the employees tend to win more in a court procedure as compared to the process of arbitration. Above are just few of the reasons as to why employers choose arbitration.

There have been several cases wherein it has been observed that, the companies and employers are forced to sign the arbitration clause which has been a cause of anxiety for many employees. It not only takes away the right to go the court in case of any exploitation committed against them but it also leaves them at the mercy of their employers which makes them prone to all sorts of harassment.

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