Arbitration Act Employment Agreement

Arbitration Act Employment Agreement: What You Need to Know

As an employee, you may be asked to sign an employment agreement that includes a clause on arbitration. This means that in case of any disputes that may arise between you and your employer, you will be required to go to arbitration instead of taking the matter to court.

The use of arbitration agreements in employment contracts has become increasingly popular in recent years. The primary reason for this is that arbitration can be a less costly and time-consuming method of resolving disputes compared to litigation.

What is the Arbitration Act?

The Arbitration Act of 1996 is the governing legislation for arbitration in the UK. It provides a uniform set of procedures for the conduct of arbitrations, and ensures that all parties receive fair treatment during the process.

Arbitration under the Arbitration Act is a voluntary process, meaning that both parties must agree to it before proceeding. This is usually done by way of a written agreement between the parties, such as an employment contract.

Benefits of Arbitration Agreements

Arbitration agreements can benefit both employers and employees in several ways. For employers, it can be a more efficient and cost-effective way to handle disputes, as it can avoid lengthy court proceedings. It can also provide a more confidential and private process for resolving disputes.

For employees, arbitration can be a quicker way to resolve disputes, as it usually has a shorter timeline than litigation. It can also be less intimidating than going to court, and can be a less formal process.

Challenges with Arbitration Agreements

Despite the benefits of arbitration agreements, there are some challenges that employees should be aware of. One of the primary concerns is that arbitration can limit an employee`s legal rights and remedies. For example, an employee may be limited in their ability to appeal a decision made by an arbitrator.

There is also a concern that arbitration can favour employers, as they may have more experience with the process and may be able to choose the arbitrator. There is also a lack of transparency in arbitration, as the process is usually confidential.


Arbitration agreements can be a useful tool for resolving disputes in employment contracts. However, it is important for employees to carefully review the terms of the agreement to ensure that their legal rights are protected. If you have any questions or concerns about an arbitration agreement, it is recommended that you seek legal advice before signing it.