Awards and Settlement:
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 Settlement or Award by making an application to the appropriate government.
The purpose and aim of the Industrial Disputes Act 1947 is to minimize 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.
Method of settlement of Industrial Dispute-
In the interests of the industry in particular and the national economy in
general, cordial relations between the employer and employees should be
maintained. To ensure cordial labour management relations and to achieve
industrial harmony, the following methods of settlement of industrial disputes
are provided under the Act -
Collective Bargaining - Collective Bargaining or Negotiation is one of the
methods for settlement of an industrial dispute. It plays significant role in
promoting labour management relations and in ensuring industrial harmony
Collective Bargaining is a process/Method by which problems of wages and
conditions of employment are settled amicably, peacefully and voluntarily
between labour and management. In collective bargaining, the parties to the
dispute I.e., the employer and the employees/workmen settle their disputes by
mutual discussions and agreements without the intervention of a third party.
Such settlements are called "bipartite settlement". Therefore, settlement of
labour disputes by direct Negotiation or settlement through collective
bargaining is always preferable as it is the best way for the betterment of
labour disputes. Collective Bargaining is recognized as a right of social
importance and greater emphasis is placed on it by India's five year plans. The
term 'Collective Bargaining' was coined for the first time by Sidney and Webb in
their famous book 'Industrial Democracy' published in 1897. It means
Negotiation between an employer and group of workers to reach agreement on
working conditions. N. W. Chamberlain (in his 'Source Book on Labour: 1958 p.
327) described collective bargaining as "the process whereby management and
Union agree on the terms under which workers shall perform their duties". In
simple word, collective bargaining means "Bargaining between an employer or
group of employers and a bonafide Labour Union".
2) Conciliation -Conciliation is a process, by which a third party persuades the
parties to the industrial dispute to come to an amicable settlement. Such third
party is called 'Conciliation Officer' of Board of Conciliation. Sections 4 and
5 of the act provide for the appointment of Conciliation Officer and the
constitution of the Board of Conciliation respectively.
3) Voluntarily Arbitration - The expression 'Arbitration' simply means "the
settlement or determination of a dispute outside the court". Parties to the
dispute, without going to the Court of law, may refer the dispute/Matter to a
person in whom they have faith, to suggest an amicable solution. Such person,
who acts as a mediator between the disputants to settle the dispute is called
"Arbitrator". The decision given by the parties, which is binding on the
parties, is called "Award". Therefore Arbitration is a judicial process under
which one or more outsiders render a binding decision based on the merits of the
dispute. Section 10-A of the industrial dispute act, 1947 confers on parties,
power to enter into Arbitration agreement. The agreement must be in prescribed
form and must specify the name/names of the arbitrator or arbitrators.
4) Adjudication -When an industrial dispute could not be settle either through
bipartite negotiations or through the Conciliation machinery or through the
voluntary Arbitration, the final stage resorted to, for settlement of an
industrial dispute is Adjudication or compulsory Adjudication, which envisages
Governmental reference to statutory bodies such as Labour Court or Industrial
Tribunal or National Tribunal. Section 7, 7-A and 7-B of the Industrial disputes
Act, 1947 provide for the constitution of Labour Court, Industrial Tribunal and
Labour Tribunal respectively.
What is award?
The judgment of an arbitrator is called his Award. Award (Judgement) of
Arbitrators under section 10A is an Award.
Definition of Award
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-
(a) An Award is an interim or final determination of an industrial dispute.
(b) It is an Interim or final determination of any question relating to such
(c) Such interim or final determination is made by any Labour Court,
Industrial Tribunal or National Industrial Tribunal.
(d) Award (Judgement) of Arbitrators under section 10A is an award.
What is Settlement?
According to Section 2 (p) of the Industrial Dispute Act, 1947
“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 authorised in this
behalf by the appropriate Government and the conciliation officer.
Procedure for Settlement of Industrial Disputes
The Industrial Disputes Act, 1947 provides procedure for settlement of
industrial disputes, which must be followed in all “public utility service”, has
been defined in section 2 (n) of the Act so as to include “any railway, postal,
telegraph or telephone service that supplies power, water and light to the
public, any system of public conservancy or sanitation, any section of an
industrial establishment on the working of which the safety of the establishment
or the workmen employed therein depend and any industry which keeping in view
the public emergency has been declared as such by the appropriate Government”.
As laid down in the Act a dispute should first go through the process of
conciliation before it could be referred to the appropriate authorities for
adjudication33. Where any industrial dispute exists or is apprehended, the
Conciliation Officer may or where the dispute relates to a public utility
service and a notice under Section 22 has been given shall hold conciliation
proceedings in prescribed manner.
Conciliation proceedings can be stated in case of dispute that actually exists
or when there is reasonable ground to apprehend that an industrial dispute is
likely to come into existence unless something is done to prevent or where both
parties to dispute approach the Government separately for conciliation.
Conciliation proceedings are deemed to have been started from the date on which
a notice issued to the parties to appear before the conciliation officer who may
meet them jointly or separately.
The Conciliation Officer must submit his report to the Government within
fourteen days of the starting of conciliation proceedings. During this period he
tries to bring about a fair and amicable settlement between the parties to
dispute. If a settlement arrived at, the Conciliation Officers will send a
report to the Government along with a memorandum of settlement duly signed by
both parties. This settlement come into force from the date agreed upon
by the parties to dispute or in its absence the date on which it was signed by
them and is binding for a period of six months unless agreed upon otherwise, and
after the period afore said, until expiry of two months from the date on which
a notice in waiting of the intention to terminate the settlement is given by
one of the parties to the other party or parities to the settlement. Such a
settlement is binding on all parties to the industrial dispute, to the employer,
his heirs, successors or assignees and to the workmen employed in the
establishment on the date of the dispute and all the persons who subsequently
become employed therein. If no settlement is reached by the parties, the
conciliation officer will submit his report to the appropriate Government
stating the reasons for which he thinks no settlement could be arrived at as
well as the facts of the case.
Action by the Government:
On receipt of the report from the Conciliation Officer, the Government will come
to a decision on whether the circumstances and the
facts of the case as such to justify a further reference. The Government has to
arrive at ‘prima facie’ conclusion that the nature of the dispute justifies
a further reference. If in the opinion of the Government, there is a scope
of arriving at a settlement by further conciliation efforts, it may refer the
case to the Board of Conciliation.
Collective Bargaining as a method of Settlement of Industrial Disputes
Collective bargaining as such is one of the most developed in Indian history
since independence, and deserves the attention of all who areconcerned with
the preservation of industrial peace and implement of
industrial productivity. In the ‘laissez faire’ the employers enjoyed unfettered
rights to hire and fire. They had much superior bargaining power and were in a
position to dominate over the workmen. There are some routine criticism of the
adjudicatory system i.e., delay, expensive.
Governmental interference in referrals and uncertain out come. Thereforethe
parties to the industrial dispute are coming closure to the idea that ‘direct
negotiations provide better approach to resolving key deference over wages and
other conditions of employment 2.
The system of collective bargaining as a method of settlement of industrial
dispute has been adopted in industrially advanced countries. The common law
emphasis to individual contract of employment is shafted tocollective
agreement negotiated by and with reprehensive groups.35“The Industrial Disputes
Act, 1947” which provides for the machinery for the settlement of industrial
Distinction between Award and Settlement
||Section 2(b) of the Industrial dispute Act
1947 defines Award.
||Section 2(p) of the Industrial dispute Act
1947 defines Settlement.
||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.
||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.
||It resembles the judgment of a Court.
It is to be signed by the Presiding Officer.
|It resembles a gentleman agreement. It is
signed by the parties to the dispute.
On whom Awards and Settlements are binding-
According to Section 18 of the Industrial Disputes Act, 1947 Awards and
Settlements are binding on the following persons -
A settlement arrived at by agreement between the employer and workman otherwise
than in the course of conciliation proceeding shall be binding on the parties to
Subject to the provisions of sub-section (3), an arbitration award which has
become enforceable shall be binding on the parties to the agreement who referred
the dispute to arbitration.
A settlement arrived at in the course of conciliation proceedings and an award
of a Labour Court, Tribunal or National Tribunal shall be binding on-
All parties to the industrial dispute;
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, records the opinion that they were so summoned
without proper cause;
Where a party referred to in clause (a) or clause (b) is an employer, his
heirs, successors or assigns in respect of the establishment to which the
All persons who were employed in the establishment or part of the establishment
on the date of the dispute and all persons who subsequently become employed in
that establishment or part.
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.
Period of operation of Awards and Settlement
Section 19 of the Industrial Disputes Act 1947 provides for the period of
operation of Award and Settlement.
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.
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.
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 an award does not exceed three years from the date
on which it came into operation.
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.
A settlement is an agreement reached among the parties to a workers'
compensation claim. This includes you, your employer and the workers'
compensation insurer (unless your employer is self-insured). This is a type of
contract, and it may bar you from seeking further compensation for your injury.
An award, on the other hand, is granted to you by the workers' compensation
court. This may include medical benefits or other types of workers' compensation
awards based on the specifics of your injury. For example, a judge can order -
or an insurance company can admit for - temporary and permanent disability
benefits. This isn't a settlement. You don't have to sign away any rights to get
If you need help determining whether you received an award or a settlement, we
can help. We can review your situation and help you understand your legal
options. We can also advise you before you accept an award or settlement. At
every stage of your case, we will work to ensure that you receive the full and
fair benefits you need under Colorado's workers' comp laws.
According to Section2(p) of the Industrial Dispute Act, 1947 “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 authorised in this behalf by the
appropriate Government and the conciliation officer.