Understanding Settlement Agreements Under the ID Act: Are They Legally Binding and Can You Still Go to Labor Court?

Hi Friends, recently, there has been a settlement between my company and an aggrieved workman. During the conciliation proceeding, the Conciliation Officer issued Form H under Section 12(3) of the ID Act.

Questions Regarding the Settlement

I would like to know:
- Is this agreement legally binding on both parties?
- Is there still room to move to the labor court?

Regards,

Memorandum of Settlement and Legal Binding

If the matter was under conciliation and resulted in a settlement agreed upon by both parties, then FORM H (Under The Industrial Dispute (Central) Rules 1957) has to be filled as a Memorandum of Settlement. This form should include the signatures of both parties as well as the signature of the Conciliation Officer. This ultimately confirms that the agreement between the two parties is acceptable to both and is legally authenticated by the conciliation officer.

If the agreement is not signed by any of the parties, then there would be scope to refer it to further conciliation only. As per my knowledge, such a matter would be referred up to Conciliation Officers only for an amicable settlement and not to the labor court, as it does not involve any points within the jurisdiction of the labor court.

Once the agreement gets signed in confirmation with the conciliation officer, it is binding on both parties.

Regards,

Signing an MoU before the conciliation officer gives finality to the settlement, and there is no question of moving to court.

Sub-settlement Before Conciliation Officer

The courts attach as much sanctity to a settlement arrived at in conciliation as to an award delivered by a Labour Court or Industrial Tribunal. It is binding under Section 18(3) of the Industrial Disputes Act, 1947, not only on the parties who signed the settlement but on all parties who were summoned to the proceedings. It is binding on every workman employed in the establishment, irrespective of whether or not such a workman is a member of the union that signed the settlement.

Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
[Phone Number Removed For Privacy Reasons]

Since it is a settlement as per Section 2(p) of the ID Act, it is binding not only on the parties who signed it, but also on the heirs and assigns of the employer, as well as on the existing employees and those joining after the date of signing the settlement.

Regards,
Vishal Amte
[Phone Number Removed For Privacy Reasons]