Labour laws course materials




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Earlier settlement cannot be a bar for the union raising new demands falling outside the scope of that settlement , management cannot refuse additional facilities such as raincoats etc., ordered by Labour Court on the ground that there was no provision in the settlement reached earlier – 2000 (1) LLJ 1499.
Where the workers and officers belonged to two different and distinct category then workers cannot claim parity with those in the matter of pay fixation – AIR 1996 SC 2744.
Employee went on strike after expiry of statutory period of notice – strike must be deemed to be legal – 1990 (60) FLR 470 (SC).

19. Period of operation of settlements and awards.- (1) A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.

(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.

(3) An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A:

Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit:

Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.

(4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be on such reference shall, be final.

(5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.

(6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.

(7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.

NOTES



Scope of : According to sub-section (2) of Sec. 19 of the Act, the settlement is binding for such period as agreed upon by the parties. It is clear that an award is normally effective and continues to be in operation for a period of one year unless its operation is extended by the Govt. under second proviso to sub-section (3) of Sec. 19 of the Act. It is not disputed that the settlement stands on a different footing and operate for a period agreed upon between the parties.
The whole confusion and the dispute that has arisen in this case is due to the incorporation of the settlement in award. The question is as to whether on account of incorporation of the settlement in the award, its independent existence will come to an end and the period for which it was agreed upon by the parties to be operative would cease to have effect and thereby the provisions of sub-section (2) of Sec. 19 would be rendered ineffective. It was contended that notwithstanding this fact, the award being given by the Labour Court in pursuance of the settlement , the settlements themselves would occupy the field and would remain binding by force of the statute. The award , itself, as already seen earlier, has taken note of the settlement between the parties and the fact that this was to remain enforce for a period of three years. The view of the Court is that the binding nature and the effect of the settlement would not be rendered ineffective even if there is an award in terms thereof. Taking any other view would cause violence to the harmonious construction of sub-sections (2) and (3) of Sec. 19 of the Act. The settlement would be deemed to merge in the award as such simply for the fact that the settlement becomes award of the Tribunal. The scheme of sub-section (3) of Sec. 19 of the Act does not contemplate for a variation of the period of an award both ways, i.e., it could either be reduced or be extended but no such provision is there with respect to the settlement. It is obvious that the period for which the settlements are arrived at between the parties cannot be curtailed. There is no doubt to come to the conclusion that merely because a settlement had been arrived at between the parties after an industrial dispute was referred to the Tribunal, it could not be said that it is no longer a settlement. Even though the dispute is referred to the Tribunal, the Tribunal cannot refuse to accept the settlement made by the parties as was done by the Tribunal in this case. J.D. Jones & Co Vrs. State of Bihar – (1982) Lab. I.C.1475.

The issue before the Supreme Court was that does a settlement or award under the Act suffer death merely because of a notice issued under Sec. 19(2) ? The Court answer the above issue in the negative. The Supreme Court observed :


“The settlement under the I.D. Act does not suffer death merely because of the notice issued under Sec. 19(2). All that is done is a notice intimating its intention to terminate the award. The award even if it ceases to be operative qua award continues qua contract. Therefore, if the I.D. Act regulates the jural relations between the L.I.C and its employees than the right under the settlement of 1974 remain until replaced by a later award or settlement “. L.I.C Vrs. D.J. Bahadur – (1981) I L.L.J. 1 (SC).
Section 19(3) indicates that Section 11, CPC is inapplicable to the industrial disputes, but its principle as expressed in the maxim “ interest rei publical ul sit finis litium” is founded on sound public policy, so if the Court is to regard the award as intended to have long term operation and at the same time to hold that they are liable to be modified by changes in the circumstances on which they were based, the purpose of the Legislature would be served, Workmen of Burn & Co. Vrs Burn & Co. – AIR 1957 SC 38.
Award binds the parties even after expiry. But it would not estop the parties from challenging its constitutionality. Air India Vrs. Nagesh Meerza, (1981) 4 SCC 335.

20. Commencement and conclusion of proceedings.- (1) A conciliation proceeding shall be deemed to have commenced on the date on which a notice of strike or lock-out under section 22 is received by the conciliation officer or on the date of the order referring the dispute to a Board, as the case may be.

(2) A conciliation proceeding shall be deemed to have concluded -



  • (a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the dispute;

  • (b) where no settlement is arrived at, when the report of the conciliation officer is received by the appropriate Government or when the report of the Board is published under section 17, as the case may be; or

  • (c) when a reference is made to a Court, Labour Court, Tribunal or National Tribunal under section 10 during the pendency of conciliation proceedings.

(3) Proceedings before an arbitrator under section 10A or before a Labour Court, Tribunal or National Tribunal shall be deemed to have commenced on the date of the reference of the dispute for arbitration or adjudication, as the case may be and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17A.

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