The grievance and arbitration procedures are both usually provided for in detail within the negotiated memorandum of agreement (contract) between the union and employer. Generally, grievances can be filed for violations of the terms or application of the memorandum of agreement. Specific items may be precluded from the grievance procedure in industrial relations (performance reviews are a typical exclusion). Arbitration is the final step of the grievance process.
One of the benefits of the grievance procedure is that it provides an opportunity for the union and management to resolve a dispute at the lowest possible level without expense or unnecessary time wasting. Often the grievance procedure will provide for an informal meeting at the beginning of the process. This allows the union to meet with management before formally documenting the issue to discuss and resolve the problem. In cases where the issue was a misunderstanding or management was not aware of the problem, the grievance can be resolved in a mutually acceptable way.
The grievance procedure and ultimately arbitration provides the union with a formal way to enforce the contract that was negotiated with management. The grievance procedure has time limits and often has a clause at each step that states that management must respond within a certain number of days or the grievance will automatically move to the next step. This prevents management from being able to stall or avoid responding to the grievance. Ultimately, if management missed all the deadlines, the issue would be elevated to arbitration for the arbitrator to decide.
In cases where the union and management cannot agree during the course of the grievance, the typical outcome is arbitration. This allows the decision to be made by a neutral individual who is not affiliated with either the employer or the union. If there is a dispute over the intent of the contract language, the grievance and arbitration procedure enables the intent to be formally decided rather than management interpreting the contract in a way that the union may not necessarily agree with.
Arbitration is a much less expensive process than court and does not necessarily require an attorney to present the case. However, the arbitrator's decision may or may not be binding, depending on the negotiated agreement between the parties. If the decision is binding, it formally sets a precedent for future situations.
By taking an employee's case through the grievance or arbitration process, the union can prevent claims that they failed in their duty of fair representation. The union has the right to refuse to take a case if it is deemed that the issue lacks sufficient merit to grieve or arbitrate. However, the union may not make an arbitrary decision, refuse to move forward because of personal feelings about the grievant or the cost to the union, or be neglectful and untimely in the processing of a grievance. If a member has a legitimate case, the union must utilize the correct procedures.