Awards and Settlement Under Industrial Disputes Act, 1947

Introduction

Award and Settlement is a provision in The Industrial Dispute Act, 1947 which extends to the whole of India came into operation on the first day of April 1947. As per Preamble of the said Act, it is enacted to make a provision for the investigation and settlement of the dispute and certain other purposes such as recovery of money from the employer in terms of Award or Settlement by making an application to the appropriate government. The purpose and aim of the Industrial Disputes Act 1947 is to minimise the conflict between labour and management and to ensure, as far as possible, Economic and Social Justice. The act has made comprehensive provisions both for this settlement of disputes and prevention of disputes in certain Industries.

Award:

Award is related to Industrial Dispute. Basically, Industrial Dispute may be resolved by way of two act:

Quasi-Judicial Act – Not being a court of law but its procedure being governed by a similar code for example Labour Court, Tribunal, Arbitrators etc, its judgement is known as award.

Definition: Section 2(b) of the Industrial Dispute Act,1947 defines Award as follows – According to Section 2(b) of the Industrial Disputes Act, 1947 ‘Award’ means an interim or a final determination of any Industrial Dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under section 10A.

Ingredients of Award

To constitute Award under Section 2(b) of the Industrial Dispute Act, 1947 the following ingredients are to be satisfied –

1. An Award is an interim or final determination of an industrial dispute.
2. It is an Interim or final determination of any question relating to such dispute.
3. Such interim or final determination is made by any Labour Court, Industrial Tribunal or National Industrial Tribunal.
4. Award (Judgement) of Arbitrators under section 10A is an Award.

Settlement

Ordinarily, Settlement means an agreement composing differences. It is a Collective Act – When collective efforts of labour and management become successful known as Settlement.

But this word is used in a wider sense in the industrial dispute act, 1947. Section 2(p) of Industrial Dispute Act defines

“settlement”.

It means

Settlement arrived at in the course of conciliation proceeding and includes

1. A written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where:
2. such agreement has been signed by the parties thereto in such manner as may be prescribed, and a copy thereof has been sent to an officer authorized in this behalf by the appropriate government and the conciliation officer.

From this definition it will appear that settlement is of two kinds namely

1. settlement at arrived at in the course of conciliation proceeding and
2. a written agreement relating to trade dispute between the employer and workmen arrived at otherwise than in the course of conciliation proceeding. 

In the case of the former a settlement is arrived at with the mediation of conciliation officer. The statute casts a duty on the conciliation officer to take steps immediately if he apprehends an industrial dispute. For this purpose, he is empowered to inspect any dispute which he deems necessary to inspect. It is his duty to see that the settlement which in his opinion is the right settlement is amicably arrived at between the parties.

In the latter case a settlement within the meaning of this section is required to fulfil the following conditions.

• First, the written agreement between the employer and workmen relating to a dispute must be arrived at amicably, that is to say, the consent of the parties to the agreement is accorded freely and voluntary without any fear of favour.
• Secondly, the agreement is to be signed by the parties to the dispute in the prescribed manner.
• For the employer the agreement shall be signed by the employer himself or by his authorized agent or when the employer is an incorporated company or other body corporate by the agent manager or other principal officer of the corporation.
• For the workmen the agreement shall be signed by any officer of a trade union of the workmen or five representatives of the workmen held for the purpose.
• In the case of the workmen in an industrial dispute under section 2A of the act, the agreement must be signed by the workman concerned.
• A works committee constituted under section 3 has no power to enter into an agreement with the employer on behalf of the workmen. 

Distinction between Awards and Settlement:

No	Award	Settlement
1	Section 2(b) of the Industrial dispute Act 1947 defines Award.	Section 2(p) of the Industrial dispute Act 1947 defines Settlement.
2	“Award” means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under Section 10-A.	“Settlement” means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorized in this behalf by the appropriate Government and the conciliation officer.
3	It is the decision given by the arbitrator, Labour Court or Industrial Tribunal.	It is arrived at as a result of conciliation between the parties to the settlement.
4	It resembles the judgment of a Court.	It resembles a gentleman agreement.
5	It is to be signed by the Presiding Officer.	It is signed by the parties to the dispute.

Forms of Report or Award :

The section 16 of Industrial Dispute Act provides for procedure that, the report of board or Court shall be in writing and shall be signed by all the members of the Board or Court, as the case may be, to be followed. The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall be signed by its Presiding Officer.

Simply Report of Board or Court shall be :

• In writing
• Shall be signed by all members
• Any member can write note of dissent (disagreement )
• Report need not be unanimous (united)

And award of a Labour Court  , Tribunal or National Tribunal shall be :

• In writing
• Signed by the presiding officer

S.M. Mujeeb vs Labour Court, Anantapur and Another,[1]The petitioner was a Conductor in A.P.S.R.T.C. while he was conducting bus on 20th September 1980 a check was exercised and it was found that the petitioner having collected the fare from 5 passengers failed to issue tickets to the passengers who were travelling from V. Kota to Vogu. It was also alleged that the petitioner having collected the fare of 75 paise each failed to issue tickets to three passengers travelling from V. Kota to Rekhamanu. It is the case of the petitioner that there was no irregularity in issuing tickets; that the T.T.Is. having found no irregularity, demanded illegal gratification from him; that he expressed his inability to pay any amount as he was conducting the bus as per Rules and that the T.T. Is framed charges falsely. The petitioner was removed from service after conducting departmental enquiry. Later the matter was referred to the Labour Court, Anantapur for adjudication. Sri V. Veeraraghavan was the Presiding Officer of the Tribunal during the relevant time, who heard the matter, and the award was not signed by him; that the award was signed by Sri Vengal Reddy, who was the successor. It was held that award is illegal and vitiated. This is a material irregularity.

Publication of Report  

Sections 17 contains the provision regarding publication of award. Every report:

• either of Board of Conciliation or Court of Inquiry
• Any minute of dissent
• Every arbitration
• Every award of labour, tribunal and National Tribunal

Shall be published within 30 days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit.

Commencement of the Award:

Commencement of award is described under section 17-A of the act. Section 17A

1. Publishing of award will be enforceable on the expiry of 30 days, But if appropriate government is of the opinion that Enforcement is not suitable on Public Ground than award shall not become enforceable on the expiry of 30 days [section 17 A(1)]
2. But if appropriate Government wants to reject or modify the award than he must laid the order of such modification or rejection and award together before the Parliament or state legislative assembly as the case may be.

Appropriate government may reject or modify the award within 90 days of its publishing [Section 17 A (2) ]

• And where any award as rejected or modified made under sub section 2 above shall become enforceable on the expiry of 15 days from the date when it is laid.
• Where no order under sub section 1 of section 17A , the award shall become enforceable on the expiry of the period of 90 days.
• Date When Award comes into Operation – Award came into operation on the expiry of 30 days unless the award by itself gives a date for operation [17A(4)]

In the case of India General Navigation vs. Their Workmen[1], It was a contradiction in terms to say that a strike in a public utility service, which was clearly illegal, could also be justified. The law does not contemplate such a position nor is it warranted by any distinction made by the Industrial Disputes Act, 1947. It should be clearly understood by workmen who participate in such a strike that they cannot escape their liability for such participation and any tendency to condone such a strike must be deprecated.

Payment of full wages to workman pending proceedings in Higher Courts  [Section 17 B]

If the employer is not satisfied with the award of labour court ; tribunal or national tribunal by its award and prefers any proceedings against such award in a High Court or the Supreme Court , the employer shall be liable to pay such workman full wages including maintenance allowance admissible to him during the pendency of such proceeding in High Court or the Supreme Court.

In the case of Rajinder Kumar Kindra vs Delhi Administration[1] The person was staying with father-in-law and helping him in his business during the period of unemployment. Such unemployment was caused due to unjustified dismissal. It was held to be not a gainful employment. Therefore, full wages must be granted.

Binding Force of Awards:

Section 18 of the Industrial Disputes Act, 1947 contains the provision regarding binding force of Awards and Settlements. We can understand the provision in following categories:

Without the Aid of statutory Agency :

A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding

• Settlement shall be binding on parties to the agreement
• If there are two unions X and Y . Settlement arrived at employer and Union X . So, union Y is not bound.

With the Aid of statutory Agency or Adjudicating authority:

A settlement arrived at in the course of conciliation proceedings under this Act or arbitration award in a case where a notification has been issued under sub section (3-A) of section 10-A or an award of a Labour Court, Tribunal or National Tribuanl which has become enforceable shall be binding on—

• Settlement shall be binding on all parties to the dispute
• It has more extensive coverage
• All other parties summoned to appear in the proceedings
• The heirs, successors , assignees of the employer
• All persons who were employed in establishment on the date of dispute
• And all persons who became subsequently employed in the establishment section 18 (3)

Arbitration Award [18(2)] :

• Binds only the parties to the agreement
• Who referred dispute to the arbitration

But where a notification has been issued under section 10-A (3-A).

• Has the same binding force as an Award of an adjudicating authority

In the case of M.D. Hindustan Fasteners v. Nashik Workers Union[1], Appellant herein is engaged in engineering activities. Appellant was a sick unit as envisaged under the Sick Industrial Company (Special Provision) Act, 1985. A settlement was arrived at on 1990 by and between the parties hereto in regard to the demands raised on behalf of the workmen. The period covered by the settlement was 1989 to 1992. The workmen thereafter went on strike. Several demands were also raised a dispute regarding wages due for a period of lock-out between January 1992 and June, 1993. It was referred to the Industrial Tribunal. Appellant management contended that the dispute could not arise in view of settlement arrived in between the parties. Appellant failed in its contention before the Tribunal. Dismissing the appeal the S.C. observed that a settlement is aimed at maintenance of industrial peace and harmony. A settlement though is required to be read in its entirety so as to ascertain the intention of the parties. A charter of demands referred to in the settlement did not relate to wages of the workmen during the period of lock-out. The parties made it clear that the claim for the wages on the premise that the lockout was illegal and was not the subject matter of settlement.

In another case of Naresh Kumar Bansal v. G.S. Karla and another[2], a dispute relating to the termination of Cashier-cum-Godown keeper was referred for adjudication. The claim of the workman was rejecting by the tribunal on the ground of settlement between union and management under sec. 18(1). It was held that since the workman was neither a member of the union nor he had authorised the union to represent his case nor was a party to the settlement, therefore, the settlement was not binding on him. In order that a settlement between the employer and the workmen may be binding on them, it has to be arrived at by agreement between the workmen and the employer. Where the workmen are represented by a recognised union, the settlement may be arrived at between the employer and the union. If there is a recognized union and the constitution of the union provides that any of its office-bearer can enter into a settlement with the management, a settlement may be arrived at between the employer and such office-bearers. But the constitution does not so provide specifically, the office-bearers should have the necessary authorisation by the executive committee of the union or by the workmen.

Period of operation of Awards and Settlement:

The section 19 speaks about the period for which settlement and award will be binding upon the parties to the concerned industrial dispute.

In the case of Bank of India v. Presiding Officer and others[1], The SC made a clarification on a question of law whether the Sastri award and Desai award continued in force even after the expire of the period stated in section 19(3) of the Industrial Dispute Act, until parties intimate their intention. It was held that under the provisions of section 19(6) of the ID Act, 1947 an award shall continue to be binding on parties even after the period stated under section 19(3) expires. An award does not cease to be in force or cease to be binding on the parties in view of provisions of section 19(6) of the ID Act,1947 until the parties intimate to each other about their intention to do so.

Termination of the Award:

In the case of Shukla Manseta Industrial v. The Workmen[2], It was held there is no legal war to give advance intimation about the intention to terminate the settlement on the expire of the period and to start negotiation for a more favourable settlement immediately thereafter. The only condition that has to be fulfil by such a notice is that the period of two months from the date of notice must end on the expire of the settlement and not before it. A settlement under section 19(2) and an award under section 19(6) cannot be given the same meaning. Even if an advance notice is given in the case, such a notice would be infructuous and inoperative under the law. The extension of the award by the government of an award permitted by law and Government in exercising exercise of a statutory power would prevail upon the action of the party to terminate the award by notice.

Enforcement of an Award:

An award may be enforced of the following ways:

1. The aggrieved party may apply to Appropriate Government for prosecuting the defaulting party under section 29 or section 31 of this Act.
2. Where any money is payable by the employer to a workman, the workman may move the Appropriate Government for recovery of the money due to him under award.
3. The party in whose favour the award has been granted may file a suit and obtain a decree, which shall be enforced by execution under the provisions of the Civil Procedure Code.

Penalty for breach of Settlement or Award –

If any person who commits breach of any terms of a settlement or Award is liable for punishment. The punishment provided for is imprisonment which may extend to 6 months or with fine or with both.

Conclusion:

Thus, this was the Industrial Disputes Act which was passed by the government of India in 1947. This Act ensures peace and harmony among all the industrial establishments, and if any conflict arises, the provisions in the Industrial Disputes Act helps in solving the issue in a systematic manner in which all the parties are satisfied and every decision made is fair and just.