ARBITRATION, Industrial. This is the process by which an authoritative decision is obtained in the case of a controversy arising between one or more employers and a group of employees,.or between two or more groups of employees, when such controversy cannot be settled by direct negotiations between the par ties concerned. In such cases it is customary to refer the questions at issue to one or more persons, called who are appointed to investigate the facts and to render a gde cision° or eaward.s Conciliation and media tion are less formal methods of settling indus trial disputes, and consist merely of endeavors on the part of some person or group of per sons, not a party to the dispute, to promote amicable negotiations between the disputants, which may lead, either to an immediate settle ment, or to an agreement to submit the matter in question to arbitration.
Statutory provision for the formation of permanent official or semi-official boards of arbitration is made in many countries and smaller political subdivisions. In some in stances the submission of matters in contro versy is compulsory, but more often it is pro vided that upon application of one or both of the parties the board shall provide for.the hold ing of hearings, at which testimony is taken, and following which the board shall render an award. Where arbitration is voluntary, it is customary for both parties to enter into a. for mal agreement to abide by the decision of the arbitrators.
In the settlement of controversies with ref erence to wages, hours of labor and general conditions of employment, voluntary arbitration has proved very effective, and in many in stances disastrous strikes and lockouts have been averted or brought to an end by this means; but where questions of principle or general policy, such as recognition of the union, exclusive employment of union labor, use of union label, etc., are involved, the parties frequently decline to voluntarily submit the question at issue to arbitration, when, there fore, it becomes necessary for public authori ties in the interest of public welfare to insist that the matter be so submitted. Such com pulsory arbitration may be limited merely to the reference of the dispute to arbitrators for investigation, during which period hostilities shall be suspended, as in Canada; or, in addi tion to such reference, the arbitrators may be empowered to compel the attendance of wit nesses and the production of papers, as in Ger many; or it may be even further provided, as in New Zealand and other Australian states, that the disputants shall be compelled by law to abide by the decision of the arbitrators, under specific penalty for non-observance of the terms of the award.
In the following paragraphs several im portant systems of industrial arbitration pro vided for by law are briefly described. Purely unofficjal boards of arbitrators, most of which are formed merely in connection with a single controversy, are not, because of the great variety of such boards, included within the scope of this article.
France.— The first definite provision for the settlement of industrial disputes appears to have been the tribunal established before the French Revolution at Lyons, France, for the settlement of disputes in the silk industry. Al though this tribunal was abolished with the trade guilds in 1791, it had proved so effective that, in 1806, Napoleon created the councils of experts (Commits des Prud'hommes) having quite similar functions. The councils, at first established in only a few cities, are now found in all of the important industrial centres in France, and similar councils have been estab lished in other countries. For many years these councils considered only controversies between employers and individual employees, and it was not until the passage of the Con ciliation and Arbitration Act in 1892 that pro vision was made for the settlement of collective disputes, that is, disputes between one or more employers and a group of employees. To the extent that application has been made for the settlement of industrial disputes under the provisions of this act, its operation has been fairly successful; but unfortunately only minor matters are thus referred for settlement, and it does not appear that the act has, to any great extent, served to prevent strikes and lockouts, which during very recent years have been both numerous and important.