Why is labour arbitration often the final step in a collective-bargaining grievance procedure?

Labour arbitration serves as the final step in a collective-bargaining grievance procedure because it provides a definitive, binding resolution after all other internal measures to reach a settlement have been exhausted.1

By referring disputes to an impartial third party, this process ensures that disagreements regarding the application of an existing contract—such as issues involving discipline, seniority, or benefits—are resolved without the need for litigation or industrial action. Unlike mediation, which offers non-binding recommendations, labour arbitration results in a binding decision that both parties are expected to comply with, thereby maintaining stability in industrial relations. Furthermore, this mechanism acts as a critical technique for settling or avoiding strikes, ensuring that the workplace remains functional while providing a fair, expert-led forum for addressing grievances.213