Unfair dismissals in Australia: does arbitration help employees?

Abstract

PurposeTo determine the factors associated with arbitration awards in unfair dismissal complaints under Australian federal legislation and to assess whether employees benefit from arbitration.Design/methodology/approachThis research involves an empirical analysis of 342 decisions in 17 industries by arbitrators in the Australian Industrial Relations Commission over the four year period 1997‐2000. Logistic and ordinary least squares regression are used to analyse the data.FindingsThe findings of this study indicate that 50.6 per cent of arbitration decisions were in favour of employees and only 10.8 per cent of complainants were reinstated. Independent variables which are significantly associated with each of the three dependent variables are identified.Research implications/limitationsThe results of this study enable researchers to gain a deeper understanding of the arbitration process and recognise independent variables that are associated with the arbitrator's decision in unfair dismissal cases.Practical implicationsEmployers lose half the unfair dismissal cases that go to arbitration. To reduce legal and associated costs, employers may need to look at ways of creating a more harmonious workplace. Employees do not benefit much from arbitration and have little chance of reclaiming their jobs. Reaching a settlement through mediation may be a better option.Originality/valueThis is the first study to assess arbitration decisions in Australia. By developing a conceptual model based on arbitration outcomes and structuring the analysis on this model, the paper presents a logical understanding of the factors that drive arbitration decisions and remedies.