Page 176 - DMGT516_LABOUR_LEGISLATIONS

Unit 7: Dispute Resolution and Industrial Harmony

Persons on whom Settlements and Award are Binding Notes

Section 18 of the Act enumerates persons on who settlements and awards are binding. For this
purpose settlements are classified in two categories, namely:
1. Settlement arrived at otherwise than in the course of conciliation proceedings, i.e. without
the aid of statutory agency, and
2. Settlement arrived at in the course of conciliation proceedings, i.e. with the aid of statutory
agency.
In the former case a settlement under Section 18(1) arrived at by agreement between the employer
and workmen otherwise than in the course of conciliation proceedings shall be binding on the
parties to the agreement. But any such settlement in order to be binding must be signed by the
parties thereto in the manner prescribed by rule and a copy of it must also be sent to the
appropriate Government.
Section 18(2) which is made subject to the provisions of Section 18(3) provides that an arbitration
award which has become enforceable shall be binding on the parties to the agreement who
referred the dispute to the arbitration.
Sub-section (3) provides that -

1. a settlement arrived at in the course of conciliation proceedings under this Act; or
2. an arbitration award in a case where a notification has been issued under sub-section (3-A)
of the Section 10-A; or

3. an award of a Labour Court, Tribunal or National Tribunal which has become enforceable
shall be binding on:
(a) All parties to the industrial dispute.

(b) All other parties summoned to appear in the proceedings as parties to the dispute,
unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal as the
case may be, record the opinion that they were so summoned without proper cause.
(c) Where party referred to is an employer, his heirs, successors or assigns in respect of
the establishment to which the dispute relates.

(d) Where a party referred to in Clause (a) or Clause (b) is composed of workmen, all
persons who are employed in the establishment or part of the establishment, as the
case may be, to which the dispute relates on the date of the dispute and all persons
who subsequently become employed in that establishment or part thereof.

Persons Bound by Settlement

Under Section 19(1) a settlement arrived at by agreement between the employer and the workman
otherwise than in the course of conciliation proceedings is binding only on the parties to the
agreement. A settlement arrived at in the course of a conciliation proceeding is binding not only
on the parties to the industrial dispute but also on other persons specified in clauses (b), (c) and
(d) of sub-section (3) of Section 18 of the Act – Tata Chemicals v. Workmen, Tata Chemicals, AIR 1978
SC 828. Even if settlement regarding certain demands is arrived at otherwise than during the
conciliation proceeding between the employer and the union representing majority of workmen,
the same is not binding on the other union which represents minority workmen and which was
not a party to that settlement. The other union can, therefore, raise the dispute in respect of the
demand covered by the settlement and the same can be validly referred for adjudication. In the
above situation the settlement will not operate as stopped against minority union raising same

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