Collective bargaining is the term used to describe negotiations between employees and an employer. The outcome of collective bargaining is known as a collective bargaining agreement or CBA. Collective bargaining is generally undertaken by a union. The negotiations are governed by laws and the regulations of the relevant administrative agency and are supposed to be in “good faith”. This is essential as both sides in an arbitration can indulge in malicious and negative actions against the other party. Management, for instance, can indulge in lay-offs, lockout workers and launch a publicity campaign in the media against the union. While unions can cause slow downs, create bottle necks in the production line and may, sometimes, resort to strikes. These hostile actions can lead to a stalemate known as a labor impasse which causes great hardship to both the workers and to the company. There are several methods of negotiating over the issue concerned and avoiding a stalemate.

Fact finding:  Fact finding seeks to avoid a stalemate by engaging a neutral party to study the facts from an unbiased and neutral perspective. The results of a fact finding committee are used by the parties as support for their contentions, though, the results are non-binding.

Non - binding arbitration involves an independent party who has the confidence of both the parties and who presents a solution to the crisis.

Mediation:  This provides a mechanism of resolving the issues with the aid of a third party that has the trust of both parties. The mediators help the union and the management to identify the points of contention and help them arrive at solutions. The mediator does not have any real power in the resolution of disputes. They can only propose solutions. Mediation is, in many situations, mandatory by law.

Arbitration:  In arbitration, an arbitrator makes a decision regarding a dispute. Arbitrations can be binding or non-binding. In a binding arbitration, the decision is reached after hearing the arguments of both the sides. The parties have to agree in advance that would abide by the decision made by the arbitrator. However, the parties may seek relief in the courts, if, they feel that they have not been heard enough or if they feel that the arbitrator is prejudiced. In the case of a non-binding arbitration, the decision of the arbitrator has a purely advisory significance. Voluntary arbitration occurs when the parties agree to a neutral arbitrator in which they have trust in a move to avoid the legal costs and the negative publicity created by a showdown.