Settling is not settling: 10 reasons why settling is smart
Updated: Apr 20
Settling an account, settling in B.C. and settling down a baby are all good things. Settling for your current spouse rather than your high school sweetheart sucks. Many grievors think that settling their case also sucks, but in most cases, it is probably smart!
Everyone in the labour relations business knows that the vast majority of grievances that are referred to arbitration are settled prior to or during the arbitration hearing, which is to say nothing of the grievances which are settled prior to being referred to arbitration at all. This is probably a good thing – arbitration hearings are expensive and anger-inducing. (That being said, we should not lose sight of the potential merits of the idea that once a case is referred to arbitration no settlement talks should be held). Settlements at any point are a reflection of a functioning labour/management relationship.
But why have parties come around to the near consensus in Canada that settlement is to be preferred over arbitration? I have identified ten reasons why settling is smart. There may be others, including ones that apply in a particular case, but I think that these ten are the primary drivers of settlements whether explicitly recognized in a given case or not.
1) Arbitrators are not gods/witnesses are not characters on t.v. Arbitrators do their best to figure out fact from fiction and the right answer to difficult legal issues. But they are not omniscient and can’t always know who is right and who is wrong. Witnesses cannot be controlled and are unpredictable. They may seem fantastic during prep but waver or wilt under cross-examination even if they are entirely truthful. No matter how strong your case is you might lose.
2) In a settlement, you can get things that you could not get as a remedy at arbitration
In attempting to settle a grievance, literally anything is on the table including things that would and could never be awarded by an arbitrator. The employer doesn’t want to pay money to settle a small overtime grievance? Maybe it would be willing to give the grievor a vacation day or even a gift card or a charitable donation.
3) 0 If you settle you won’t get a big fat zero In other words, you will not lose if you settle. You get a certain result of something and something is better than nothing.
4) Settlements put the outcome in your hands rather than a third party’s hands
In a settlement, there might be no winner or loser. Settlements build relationships while arbitration hearings can harm relationships. Settlements can lead to all kinds of benefits in the future.
5) L Nobody wears the loss Losses can have consequences. People get fired. Unions get displaced or terminated. Companies leave. All bad stuff.
6) $ Arbitrations cost money Arbitrations are expensive and time-consuming.
7) Settlements are private In Ontario, at least, arbitration awards must be filed with the government where they can be examined by anyone. More importantly, awards are often filed with online databases such as CanLII where they can be found with a little work. Arbitration awards may even get new public life if they are referred to by other arbitrators. All of that publicity can be avoided with a settlement.
8) Arbitrations can be hard on people
Arbitration hearings can be tough and emotional. Your witnesses may be called a liar or worse actually be found in a public award to have not told the truth. There can be consequences of all kinds to personal and work relationships among employees.
9) W=L Sometimes winning the battle means losing the war There are consequences to winning at arbitration. Sometimes these consequences are not worth the win. For example, maybe the person on the other side with whom you have a good relationship loses their job or the client. Maybe the other side decides they no longer want to use an arbitrator who both sides have been happy with for many years. Maybe the company cannot afford the wage increase granted at arbitration and decides to shutter its operations. Despite what Vince Lombardi said, winning actually isn’t the only thing.
10) Settlement gets a fast result
Arbitration hearings can take a long time, occasionally lasting many years. There are times when waiting for a result can be unacceptable. Settlements can be quick and are usually much speedier than any arbitration hearing.
In addition to whether you think you have a winning or a losing case, these are the things that you should automatically consider every time you are trying to decide whether to settle a grievance. It is because of these things that the near labour relations consensus is to try hard to settle every dispute even during an arbitration hearing.
Of course, not every grievance can, or even should be settled. Sometimes the parties will genuinely benefit from an arbitrator’s award on a given issue and sometimes there is no middle ground – one party must lose and one must win. But these circumstances are rare and ought to be treated as the exception to a resolution where both parties give a little.