Wage Settlement Procedures: How Should Management Handle Pre-Expiry Agreements?

Clarification on Wage Settlement Procedures

Please clarify, if an employer and union employees are entering into a wage settlement under Section 12(3) for three years before its expiry, what should management do? Should they issue a letter to conciliation or issue a notice to union bearers?

Regards,
Uma Padmaraj

The period of operation of settlements and awards and the further steps to be taken upon their expiry have been categorically stated in Sec. 19 of the I.D Act, 1947. Ordinarily, a settlement or an award will be in operation not only until the date mentioned therein but also after the expiry of the said date until it is replaced by a fresh settlement or an award. However, either of the parties, representing the majority of the persons bound by it, can issue a two-month notice in writing, informing of their intention to terminate the settlement. It is nothing but an invitation for a fresh negotiation for the revision of the terms and conditions in the previous one.