Understanding Legal Terms: What's the Difference Between an Agreement and a Settlement in the ID Act?

I am working in the IR section of a Public Sector Utility. Recently, during a tribunal judgment, there was a reference to an "Agreement" and a "Settlement." Could anyone please enlighten me on the difference between the two as per legal parlance and the ID Act?

If an agreement with the workers mentions it as an "Agreement" and not a "Settlement" or "Memorandum of Settlement," does this agreement hold any legal value in the future course?

Thanks in anticipation.

Regards,
JayDG

Understanding Agreements and Settlements in Legal Context

An agreement is a consensus reached between management and employees but is not supported by any union, even though a union may exist and employees may be members (majority). MoM also has the same meaning. However, an agreement reached between a union and management under the ID Act, as defined in para 2(p), requires it to be signed by five elected leaders/union representatives and management, and subsequently registered with local authorities, i.e., the Assistant Labour Commissioner. This agreement may or may not be reached during conciliation proceedings.

The above is based on my personal experience and dealings. Please refer to a good consultant in case you need to make some critical decisions.

Thanks,
MSJ

Thank you, MSJ, for your prompt response. I believe an "Agreement" can be between the Management and the Union(s). The same goes for a "Settlement," but it is supported by a third party—for example, ALC or vetted in the Tribunal by the Court.

Legal Validity of Agreements

My question really is: Can all agreements termed as "Agreement" and not a "Settlement" be disputed in court? What then is the legal validity of such an agreement? Will such an agreement stand in a court or tribunal?

An agreement can be contested in a court and has no legal validity. An agreement reached during the course of conciliation or otherwise and registered by ALC cannot be contested in court/tribunal. If the settlement is not comprehensive, other points or demands can be raised and need to be settled.

Thanks,
MSJ

I found that this question did crop up earlier on this site and was not answered properly.

https://www.citehr.com/66584-differe...agreement.html

The ID Act Definition of "Settlement"

The ID Act defines "Settlement" as:

1. A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.

2. Subject to the provisions of sub-section (3), an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.

3. A settlement arrived at in the course of conciliation proceedings under this Act, or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A, or an award of a Labour Court, Tribunal, or National Tribunal which has become enforceable shall be binding on:

- All parties to the industrial dispute;
- All other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal, or National Tribunal, as the case may be, records the opinion that they were summoned without proper cause;
- Where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors, or assigns in respect of the establishment to which the dispute relates;
- Where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.

Simply put, an agreement with the stamp of approval of any legislation (court/tribunal, etc.) becomes a settlement. Some interesting points here are:

- An agreement is binding to the parties of that agreement. Say, I have Unions A, B, C & D, and A, B & C are the majority recognized unions, and I make an agreement with A, B & C - then that agreement is not binding on D. However, if that agreement is a settlement, it becomes binding on even Union D.

The question, however, remains - calling all/some agreements as Agreement and not Settlement can be confusing, as to its territory or domain. Hence, it even becomes a dispute when an agreement is an Agreement or a Settlement.

Thanks, all.

Dear Jay DG, that was fine on your part to collect all the relevant information. Thanks for that. Your post has provided more clarity on the issue. It's difficult at times to remember different clauses; however, practical experience helps you become aware of such things, and one can take necessary precautions.

Thanks again.

Regards,
MSJ