A template agreement to arbitrate disputes between an employer and an employee, governed by the law of England & Wales and the Arbitration Act 1996.
⚠️ Important, read before using this template Unlike in some countries, an employee in England and Wales cannot be required to give up their statutory employment rights through an arbitration agreement. Under section 203 of the Employment Rights Act 1996, any clause that tries to stop an employee bringing a claim under that Act (such as unfair dismissal or unlawful deductions from wages) in the Employment Tribunal is void. Discrimination claims are protected separately, under the Equality Act 2010 rather than section 203. Such statutory claims can generally only be validly settled through a statutory settlement agreement or an ACAS-conciliated (COT3) agreement, subject to any specific statutory arbitration scheme that may apply.
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This template therefore covers contractual disputes between employer and employee and expressly preserves the employee's right to bring statutory claims in the Employment Tribunal (clause 2). Do not present arbitration to staff as a way to remove tribunal access, it cannot. Take legal advice before using this with employees.
How to use this template - Replace every
[SQUARE-BRACKET]field before use. - Keep clause 2 (preservation of statutory rights), removing it would make the agreement misleading and, as to statutory claims, ineffective. - Consider whether arbitration is genuinely appropriate for employment matters, where the tribunal is free to use and designed for the purpose.
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THIS AGREEMENT is made on [DATE]
BETWEEN (1) [EMPLOYER NAME] of [ADDRESS] (the "Employer"); and (2) [EMPLOYEE NAME] of [ADDRESS] (the "Employee").
Agreed terms
1. Agreement to arbitrate contractual disputes. Any dispute arising out of the Employee's contract of employment that is not a statutory claim (see clause 2) will be referred to arbitration under the Arbitration Act 1996, with the seat in England and Wales.
2. Statutory rights preserved. Nothing in this Agreement prevents, or is intended to prevent, the Employee from bringing a claim in the Employment Tribunal that the law allows to be brought there (including, without limitation, unfair dismissal, discrimination, and unlawful deductions from wages). Consistent with the statutory restrictions on contracting out (section 203 of the Employment Rights Act 1996 for claims under that Act, and the Equality Act 2010 for discrimination claims), any attempt to exclude such claims is void, and this clause prevails over any other provision.
3. The arbitrator. The arbitration will be conducted by a sole arbitrator agreed by the parties or, failing agreement within [NUMBER] days, appointed by [APPOINTING BODY]. The arbitrator will act fairly and impartially and give each party a reasonable opportunity to be heard.
4. Procedure. The arbitrator will set a fair procedure and timetable and may decide matters on documents or at a hearing.
5. Confidentiality. The arbitration and the award are confidential, save as required by law or to enforce the award.
6. Fees and costs. The Employer will bear the arbitrator's fees and expenses. The arbitrator may make an award of costs as between the parties.
7. The award. The award is final and binding on the parties as to the contractual disputes within clause 1, subject to the limited rights of challenge under the Arbitration Act 1996.
8. Governing law. This Agreement is governed by the law of England and Wales.
Execution
Signed for and on behalf of [EMPLOYER NAME]: __________________ Date: [DATE]
Signed by [EMPLOYEE NAME]: __________________ Date: [DATE]
--- This template is a starting point and not legal advice. Employment arbitration cannot remove an employee's statutory tribunal rights, have a qualified employment solicitor review and adapt it before use. Governing law: England & Wales.