In labor relations, what is it called when a third party makes a decision between two disputing parties?

• A. Mediation
• B. Negotiation
• C. Arbitration
• D. Facilitation

Answer: (C)

The correct answer is arbitration, which refers to a process in labor relations where a neutral third party, known as an arbitrator, is brought in to resolve a dispute between two conflicting parties. In arbitration, the arbitrator listens to the arguments and evidence presented by both sides and then makes a binding decision that both parties are obligated to follow. This process is often used when parties are unable to reach an agreement on their own, making it a crucial alternative to litigation.

While mediation involves a third party who helps facilitate communication and negotiation between the disputing parties without making a decision, arbitration differs significantly in that the arbitrator has the authority to impose a resolution. Negotiation is a direct discussion between the parties to arrive at a mutual agreement, without the involvement of a third party. Facilitation also seeks to enhance cooperation and understanding among the involved parties but does not result in a binding decision like arbitration does. Each of these processes plays a distinct role in labor relations, but arbitration specifically emphasizes the third party's decision-making power in resolving disputes.