Since it is inevitable to avoid labor disputes at the workplace, it is important to establish an efficient system to resolve labor disputes and to protect the rights and interests of both parties. There are many ways to resolve labor disputes. Among these ways, mediation and arbitration are utilized frequently. Mediation and arbitration are also designed to be the main means to resolve labor disputes in Taiwan. Compared with litigation, mediation and arbitration are more flexible, economic and efficient. Mediation and arbitration are regulated in two separate chapters in the Labor Dispute Resolution Act in Taiwan. However, the enforcement of these two systems is not effective. The Council of Labor Affairs therefore proposed an amendment to amend the relevant provisions governing mediation and arbitration in the Labor Dispute Resolution Act. The purpose of this amendment is to strengthen the function of mediation and arbitration. The amendment to the Labor Dispute Resolution Act passed the legislative procedure and became the law in 2009. This article is to discuss the relevant regulations governing mediation and arbitration in the new Labor Dispute Resolution Act. The new system of sole mediator and sole arbitrator is the focus of this article. This article also introduces and discusses the relevant system in the US. Recommendations for improving the system of mediation and arbitration in resolving labor disputes are proposed in the end of this article.