Emotion recognition in conversation (ERC) is a production capability behind agent-assist prompts, escalation routing, and post-call analytics in contact-center-as-a-service (CCaaS) platforms, where cost and latency constraints matter as much as accuracy. We report a systems-level comparison of three deployment options for dialogue-contextual ERC: a low-cost stacked ensemble (sentence embeddings, windowed context, RandomForest/XGBoost/logistic-regression stacking), off-the-shelf LLM prompting (GPT-4o-mini; zero-shot, few-shot, chain-of-thought), and a confidence-gated hybrid that escalates only the ensemble's least-confident predictions to the LLM - modeled on IVA-to-human-agent escalation policies used in production contact centers. On IEMOCAP, the ensemble significantly outperforms every LLM configuration (0.595 vs. 0.460-0.536 weighted F1, p < 0.0001) at a fraction of the cost and sub-10ms latency; on MELD and CMU-MOSI the ranking reverses, showing neither pure system is a safe default. The confidence-gated hybrid resolves this by Pareto-dominating both pure systems on all three datasets (0.620, 0.643, 0.824 weighted F1) while routing the majority of traffic through the near-zero-cost ensemble, translating to roughly $10-85 per million utterances versus $99-170 for an LLM-only pipeline. The escalation policy is not an opaque cost/accuracy dial: escalated turns disproportionately follow an emotion or sentiment shift, giving operators an interpretable, auditable routing signal, and the ensemble's confidence is well-calibrated and safely under- rather than over-confident. The pattern holds across three datasets and two LLM providers. Confidence-gated cascading is established in general ML systems; our contribution is showing it transfers cleanly to dialogue-contextual ERC, yielding a concrete deployment recipe for CCaaS and conversational-AI platforms deciding how to allocate LLM spend.

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