Since there will be disputes in specific instances about the application of each of the foregoing rights as well as some disciplinary disputes between managers and managed, a system for fair settling of those disputes is necessary. The participants' confidence in the justness of their system must be maintained if the system is to continue. Therefore, the settlement of rule violations must be equitable, by an authority independent of management. Just as democratization adds representative organs and substantially alters the executive process of enterprises, so too are distinct adjudicative organs discovered to be necessary in the workplace.

However, this adjudicative component seldom has differentiated itself out as fully from the legislative and executive bodies in democratized firms as has the judiciary process in our national political system (Livingston and Thompson,1963: 354-410). Also, the adjudicative component seems not to have been developed as intensively in many democratized firms as have many of the components mentioned so far—in particular, participation and economic return. Therefore, to show the full range of possibilities and to be able to anticipate future developments, our analysis first had to uncover the principles inherent in any judicial process and then match those against the experience to date in democratized firms. Three functions of judicial process seem to have primary relevance to workplace self-management:

1. To settle infractions of the rules in a just manner;
2. To uphold and be the last-resort enforcer of basic rights; and
3. To protect the by-laws (constitution) of the enterprise from violation by any member, be he manager or managed.

The first function usually takes place in two stages—an act is committed or a person is accused of committing an act that violates one of the organization's rules. This may be handled on the spot (as in the John Lewis Partnership [Flanders et al., 1968]) by a supervisor's decision that identifies the crime, decides guilt or innocence, and sets punishment or acquittal. (See Table 8.1 on the next page, which presents typical "crimes" and punishments in workaday life). Or the matter may be sent to a special tribunal for decision, as in a few plywood mills (Berman, 1967). Seldom is this first stage democratized (even in democratized firms). That is, rarely is the function of determining guilt or innocence left to a jury of one's peers; nor are the distinct roles of rulemaker, accuser, judge, and sentencer always kept separate. Rather, in this first stage the supervisor often unites in one person several roles, assigning punishment for acts he himself identifies as violations of the rules. (The firm is still democratized to the extent that management cannot autonomously make many of the rules.)