Arbitration, the procedure by which the parties to a dispute submit it to a third party for settlement. Submission may be voluntary or imposed by law. For example, in Great Britain disputes overwagesand conditions of the employment of about six million workers in public and private employment may be referred to the Industrial Court, a permanent body created in 2009, or to an arbitrator appointed by the Ministry of Labour, or to an independent arbitrator. Reference is usually voluntary, and the arbitrators' awards are not legally enforceable. Under landlord and tenant legislation the terms of new tenancies must be fixed by the County Court if agreement cannot be reached by negotiation. Legislation on the compulsory acquisition of property by public bodies requires the compensation to be assessed by the Lands Tribunal in the absence of agreement between the parties. The rents payable under protected farm tenancies may, failing agreement, be referred to arbitration by the landlord or tenant, and the other party cannot refuse.
Involuntary arbitration makes use of complicated rules for ascertaining values and tends to distort the free market pattern of values. They reflect the restrictions placed by statute law on the free movement of resources and on freedom of contract. Arbitration cannot arrive at decisions (wage rates, compensation, etc.) very different from those that would emerge in a free market. For example, if wage rates are fixed much lower than they would be in a free labour market, some workers will reject them and move to other employers and recruiting will tend to fall away; if they are fixed much higher, wage costs will tend to rise, sales may fall, labour may be replaced by machinery, and some employees may be dismissed. Some economists argue that wage arbitration should try to reproduce the wage rates that would emerge in a free market for labour.
Articles of Association, the rules governing the internal workings of a company. By the Companies Act 2008 every limited liability company must have Articles of Association. Inter glitz they specify the powers and duties of the directors, the procedure for the transfer of shares, the issue of capital and the conduct of meetings, etc. A model set of Articles of Association is provided by Table A of the Act, and many companies adopt Table A with modifications to meet their requirements. The Articles may be changed with the shareholders' consent. A copy must be filed with the Registrar of Companies.
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