Every fired employee is entitled to their day in court. Right? Wrong. Some employees can’t go to court because they agreed, in their contracts, to use binding arbitration, a “judge for hire,” to resolve their issues with their employer. This has its advantages but also downsides.

By choosing to arbitrate, you can escape the public spotlight. Unlike court proceedings, all documents are private and the hearings are held behind closed doors. This allows employers and employees to argue their case without fear of public scrutiny. That is the main reason employers want it in their contracts.

Another big advantage of arbitration is that it is also much more informal than the court process. The rules of procedure and the rules of evidence before an arbitrator are far more relaxed than before a judge.

It is also much faster. Your case can be resolved in a matter of a few months. By contrast, due to the current backlog in the court system, it often takes years to appear before a judge.

Another advantage of arbitration is that you can select someone who is specialized in employment law to decide the case. In the court system, you have no control over which judge is assigned to your matter and he or she may not have much experience in employment law.

Cost is another important consideration. The arbitration process allows for flexibility over who pays the costs of the arbitrator, the venue, and the winning party’s legal fees. The parties can also limit their costs by foregoing complicated legal manoeuvres which occur in court such as the discovery process.

However, the lack of discovery in arbitration may be a disadvantage if your employer discriminated against you, callously terminated you, or if you are facing harassment at work. Typically, you need a lot of evidence to prove these types of allegations.

Discovery allows you to exchange information about witnesses and evidence before a trial, to know the case both the employer and the employee has to meet. At an arbitration, a “trial by ambush” is more likely to happen because this evidence is not available to the other side in advance.

The other big downside of arbitration is that decisions are almost always final. Appeal avenues in arbitration are limited. If you aren’t satisfied with the decision and you think the arbitrator made a mistake, you won’t have effective recourse. In court, you can take your decision to a higher court in broader circumstances.

If after reading this you are persuaded that you prefer the quick, informal and private process of arbitration to court, then you must ensure that your contracts reflect this intention and are legal and enforceable, which is easier said than done. Three years ago, the Supreme Court of Canada found an arbitration clause in an employment agreement invalid because it was overwhelmingly unfair and one-sided in favour of the employer.

In the decision, a group of Ontario delivery drivers employed by Uber Eats tried to take their employer to court for failing to pay minimum wage, overtime pay and vacation pay. However, Uber’s arbitration clause prohibited them from suing in court. The clause required the employees to travel to the Netherlands and pay an up-front administrative fee of US$14,500 just to start the arbitration process, which represented most of the employees’ annual income. The contract also ousted the law of Ontario. It provided that the law of the Netherlands should instead be applied to any issue arising out of the parties’ employment. The court refused to allow the employer to get away with this. They struck down the clause, permitting the Ontario employees to sue in an Ontario court.

However, courts have since differentiated this Supreme Court of Canada decision. They have repeatedly found the Court’s finding inapplicable to most situations.

Last year, the Court of Appeal found that an arbitration clause that does not create barriers that leave the employee without a remedy, such as inordinate cost or international travel requirements, was valid and enforceable.

Just a month ago, the Divisional Court found an arbitration clause for an Ontario employee enforceable mainly because it did not remove the application of Ontario law for an Ontario employee.

This is good news for employers and employees considering arbitration as an alternative.

Although the Uber case has led many employers to believe that arbitration clauses in employment contracts are frequently struck down and that arbitration is therefore rarely viable, this is more myth than reality. When carefully drafted by competent counsel, arbitration clauses will survive scrutiny by courts and arbitrators alike.