Final offer selection is a method used in dispute resolution when the parties have reached an impasse. Typically, each party presents a proposal covering outstanding issues and evidence to convince the arbitrator of the superiority of its proposal.
The arbitrator then selects one party’s proposal, and the selected proposal forms part or all of the terms and conditions of the collective agreement. Each party puts in a final offer of settlement of the collective agreement, and the arbitrator chooses one or the other, without discretion to substitute a settlement that is a compromise.
In some states, court use a variation which involves the parties submitting their best offers to a court office, simultaneously with a determination of an award by an arbitration judge. The party whose offer is closer to the decision is awarded the amount of its offer.
The following is an example of the final offer selection process:
The Parties shall submit their final positions on the scale component of the salary increase to the arbitrator by April 15. The appointed arbitrator shall, after receiving the final offer of the Parties and ensuring that both Parties have received the respective final offers and any supporting documents, convene a hearing at which the Parties can adduce evidence and submit written briefs.
In any arbitration pursuant to Article 42, the Parties agree that the arbitrator selected shall be appointed pursuant to, and with the powers contained in, section 40 of the Labor Relations Act.
The arbitrator shall have the following powers:
(a) to act as a mediator with respect to the issues in dispute if the Parties consent. If mediation is not successful, the arbitrator retains the power to determine the issue by arbitration;
(b) to issue subpoenas to witnesses;
(c) to direct disclosure of relevant financial or other documents;
(d) all powers of an arbitrator as set out in SS.48 (12) and (13) of the Ontario Labour Relations Act, as they existed at June 1, 1996, so long as they are not inconsistent with the Final Offer Selection model;
(e) to determine its own rules of procedure which shall be just and equitable and intended to provide a fair and expeditious hearing; and
(f) any other powers necessary for the successful resolution of the dispute.
The arbitrator must select one (1) of the final offers within thirty (30) days of completing the hearing or such other time as agreed upon by the Parties. The arbitrator cannot award any other remedy. The selected offer shall be inserted in the Collective Agreement. Any dispute as to the manner in which the provisions of the Collective Agreement are to be modified, shall be referred to the arbitrator who shall have the power to resolve the dispute.
Each Party shall assume its own costs and share the cost of the arbitrator equally.