This manual presents a proposal to reduce arbitration or negotiation impasses and to accommodate conflicting interests by selecting a permanent neutral to monitor labor relations both during the term of the agreement and during contract negotiations. Part 1 describes the role of the permanent neutral during the term of the collective bargaining agreement as a mediator in the grievance procedure. In this role, the aim of the permanent neutral is to prevent the formal filing of grievances when possible, to discourage frivolous grievances, and to serve as a fact finder or advisory arbitrator when necessary. (Included is a sample provision for mediation of grievances.) Part 2 describes the role of the permanent neutral as a moderator during negotiations for a new collective bargaining agreement, and as a conciliator after the parties have reached the new agreement. In the latter role, the permanent neutral's function would be to reconcile the parties and to help them anticipate, face, and then resolve issues before they again reach the bargaining table. (TE)