Extension of wage settlement entered with Union u/s 18(1) of the I.D. Act - CiteHR
Madhu.T.K
Industrial Relations And Labour Laws

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Dear Experts:
A long term wage settlement with the recognized Union entered for 3 years comes to a close on 31.03.2020. Considering the present slow down in current Business scenario, the Management is not in a position to enter into a fresh settlement with the Union at this stage from 01.04.2020 (The Union is also well aware of the current business trend and they also may understand the Management's decision). Hence, the Management is thinking for extending the current settlement (which in force till 31.03.2020) for another one year till 31.03.2021 and a fresh wage settlement be entered only in 01.04.2021 provided the business trend improves to the extend of the expected level. my queries are:
1. Whether the Management has right to extend the period of the settlement for further period as it thinks fit?
2. Is there any notice is required to be given under I.D. Act? or such arrangement be made by a fresh settlement under section 18(1) revealing that employees can draw the salary till 31.03.2021 as if their wage is as on 31.03.2020?
3. Any other better arrangement also be suggested.
Regards,
V Sridharan

This arrangement of extending the conditions of service as per the exiting LTS to 31-3-2021 can be made as a settlement by taking the union also into confidence. No unilateral decision can be taken on this.
By virtue of section 19 of I D Act, a settlement shall be in force only for the period agreed upon by the parties. In case a notice of termination is given, the terms and conditions will be applicable for two months from such notice. It will open to both that till a new settlement is made, the existing LTS will be in force. But in such cases, once a settlement is made, it will have retrospective effect. But in the present case, the objective is different and the management wants that there will not be any revision for one year but depending upon the situation of 2021, a revision in service conditions could be arrived at. This can only be made by a settlement on the same and registering the same with labour department only.
Since the workers know the financial situation, I think they should agree to your proposal. if so, document it in form H by involving the Labour Officer/ Commissioner.

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