The labor dispute settlement system in the R.0.C. includes three categories: agreement on arbitration, state arbitration and arbitration on the Arbitration Law. Counterparts of arbitration according to the German Industrial Relations Law and court of arbitration according to the German Labor Court Law do not exist in Taiwan. Agreement on arbitration only indicates the right ,f both parties concerned in dispute, to reach consensus and consign to arbitration. The Labor Disputes Settlement Law stipulates the process and effect ,f arbitration. It is known that (state ) mandatory arbitration is the main system of the ROC's Laher Disputes Settlement Law, and agreement on arbitration is complementary. Literally speaking, arbitration in the Arbitration Law is applicable to disputes on matters of rights. However, in reference to the natural principle of law questions still need to be clarified. Concerning matters on arbitration, it is against the collective agreement autonomy for the state inforce mandatory arbitration with the exception of extreme cases. The state mandatory arbitration violates the state neutrality principle. When there is no agreement on arbitration, obligatory arbitration or (the state) mandatory arbitration excepting extreme cases, parties concerned may resort to direct disputive actions and such actions do not violate the last means principle.