The appropriate government referred an industrial dispute which existed in a factory which is pending for 6 months for adjudication. During the pendency of adjudication, the Management and the Trade Union arrived at a settlement. Decide the legality of the settlement.
Sec. 2 (p) of the Industrial disputes Act, 1947 states that “settlement” means a settlement arrived at in the course of conciliation proceeding. A written agreement between the employer and workman arrived at otherwise than in the course of conciliation proceeding is also conciliation. Such a written agreement must be signed by the parties to the agreement in the prescribed manner.
A copy of the agreement must also be sent to an officer authorised in this behalf by the Appropriate Government and to the Conciliation Officer. Since the Management of the Factory concerned and the Trade Union arrived at a settlement pending the completion of the conciliation proceeding, a copy of the Agreement mutually arrived at and signed, shall have to be sent to the Officer authorised by the Court which the Appropriate Government has referred the dispute to, as prescribed by the above section of the Act.
Therefore, this type of settlement is legal and binding on the parties concerned.