Unlike mediation and conciliation, which focus on the interest and needs of both parties, arbitration is focused on legal rights followed by wants.
Arbitration involves both conflicting parties being heard by a third party. The parties are to present their case/matter, along with any supporting evidence.
The Arbitrator is used as judge and after hearing both parties they impose decision, which is legally binding. Given that both parties need to present their case and ultimately argue their point, arbitration can be seen as more confronting in comparison to mediation and conciliation.
In Australia, the arbitration process is often done by the Fair Work Commission or various State Industrial Commissions. Given the win/lose approach to the outcome, many organisations use arbitration as a last option should the Mediation and Conciliation fail.