How does arbitration of rights differ from arbitration of interests in labour disputes?

In labour relations, the distinction between arbitration of rights and arbitration of interests centers on the purpose and timing of the dispute resolution process.

Arbitration of Rights

This form of arbitration addresses disputes that arise during the life of an existing collective-bargaining agreement. It focuses on the interpretation and application of the contract terms to specific grievances, such as discipline, discharge, overtime, or seniority rights. The arbitrator’s decision must be based on the existing agreement, and the process serves as a final step in the grievance procedure to ensure compliance with established rules.12

Arbitration of Interests

In contrast, arbitration of interests occurs during the negotiation of a new labour contract. It is utilized when management and a labour union cannot reach an agreement on the terms of that new contract. Because this process involves determining the future terms of employment rather than interpreting an existing agreement, it is used less frequently than rights arbitration and is sometimes subject to compulsory arbitration in sectors critical to public health and safety.13