Confused About 12(3) vs. 18(1) Agreements in Wage Negotiations? Let's Clarify!

Hi experts,

Wishing you all a happy and prosperous New Year, 2010, and Pongal. Please let me know the difference between a 12(3) agreement and an 18(1) agreement as per the Industrial Disputes Act, 1947. Normally, whenever we are entering into an agreement (wage negotiation) with our recognized union, the same is signed before the Assistant Commissioner of Labour and mentioned as a 12(3) agreement. Could you please clarify whether it is a 12(3) or 18(1) agreement?

Regards,
dpgunturi

When the settlement is signed by the conciliation officer, i.e., Assistant Labour Commissioner under Section 12(3), it is called a tripartite settlement. It is binding on all parties, even if they have not signed the agreement.

Hi dpgunturi,

Let us know what Sec. 12 of the I.D. Act entails:

Sec. 12: Duties of the Conciliation Officer: 1) 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 the prescribed manner.

Now, let's delve into what 12(3) entails. It is an agreement known as the TRIPARTITE AGREEMENT. The parties involved in this agreement are: A) EMPLOYER OR HIS REPRESENTATIVE, B) WORKMEN OR UNION LEADERS, C) THE CONCILIATING OFFICER (OF ASST. COMMISSIONER OF LABOUR OR ABOVE RANK).

Sec. 12(2): The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.

Sec. 12(3): If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings, the conciliation officer shall send a report thereof to the appropriate Government (or an officer authorized in this behalf by the appropriate Government) together with a memorandum of the settlement signed by the parties to the dispute. Such agreements stand as binding to the employer and its employees regarding the dispute.

Section 18 of the I.D. Act: PERSONS ON WHOM SETTLEMENTS AND AWARDS ARE BINDING: Sec. 18(1) Whenever a dispute arises between the employer and its workmen, and they reach a settlement after mutual discussions without any third-party intervention, the disputes settled by agreement between the employer and workman other than in the course of conciliation proceedings shall be binding on either party to the agreement.

Mohan Rao Manager HR

Someone requested a reply to my following query. In an organization, there are three registered unions. A three-year agreement is to be signed. Two unions are ready to sign the agreement, but one is not prepared. What would be the procedure for this? Whether this settlement would be done under 12(3) or 18(1) of the ID Act.

Regards,
Ajeet Jha
Manager - HR

What is the difference between Sec 12(3) and Sec 18(3)? I want the correct answer.

Regards,
Sudhir