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When you just can't come to an agreement, court isn't the only answer. Arbitration is an out-of-court means of dispute resolution. When parties have a disagreement, the 'arbitrator' or 'arbiter' is a neutral third-party that reviews the case to determine what action should be taken, and will determine the terms under which the dispute will be settled. The decision of the arbitrator is final, and may be legally binding or non-binding.

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Arbitration News

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German airline Lufthansa has announced it will be willing to offer its pilot union, Vereeniging Cockpit (VC), ongoing general arbitration on all salary disputes with the airline’s pilots. The union has been pushing for general arbitration for years, but the airline has balked, preferring to treat each contract negotiation as an individual discussion. However, the looming threat of further work stoppages by its pilots has pressured the airline to make the concession.

 

Committing to the decision, Lufthansa has even offered to begin negotiating with VC immediately concerning an arbitrator to review and render a decision on the current salary disagreement between the airline and the union. However, the airline did issue a statement saying it ‘would have liked to negotiate’ on the salary issue and other disagreements between it and the union, rather than head for arbitration.

 

Lufthansa’s opposition to general arbitration because many issues have not been negotiated or even defined by the union. The airline insisted that terms had to be clarified before any sort of formal arbitration process could be engaged. However, a four-day strike staged by VC pilots in March 2015 (the twelfth strike in the past year) may have convinced the airline of the wisdom of concession. Lufthansa has confirmed that earlier strikes by pilots cost it at least €232 million in 2014, making avoiding future work actions by the union well worth the arbitration decision.

 

No word on how quickly arbitration could begin once an arbitrator was agreed upon was given, though likely both sides would prefer to conclude the contract as quickly as possible.