Wage Settlement Dilemma: Should We Pay Arrears to a Terminated Employee?

Dear Seniors,

In our concern, the Union raised an ID before the labor tribunal in 2015 for wage settlement. Now, we have reached an amicable settlement. Initially, the union had 23 members in 2015. However, one employee was terminated by the employer, leaving the union with 22 members. The settlement covers 22 employees, but is it applicable to 23 or 22? The question arises whether we should pay the arrears to the terminated employee or not.

M. ARUL
9381747603

If in the court case, all employees were listed as prospective payees, then you have to pay, as he is entitled to the same. If they filed a case as a union and in their pleading no specific numbers were listed, and that employee has left the union, you can get a NOC from the union and not pay him anything. See more on the website below.

Termination and Settlement Procedures

First of all, there is nothing to worry about if you have terminated the employee for valid reasons and after following the proper procedures and conditions of employment.

Secondly, you can proceed with the "Settlement decision" and pay the applicable amount to the terminated employee for what they deserve if you have not already done so; otherwise, there is no need to pay extra. It is also important to obtain acknowledgment from the UNION regarding the "Employment Termination of the employee," which will serve as a No Objection Certificate (NOC) for you to move forward peacefully.

Lastly, you must inform the tribunal promptly with the details of the termination and obtain acknowledgment/agreement from the Union if the employee was terminated during the mentioned period. In any case, ensure all documentation is completed accurately with the correct settlements for terminated employees.

It is not clear whether you signed the wage settlement outside the court. However, check the applicability clause of the settlement. Usually, it applies to all workmen on the rolls of the company on the date of signing. If the terminated workman was on the roll on this date, then he is entitled to all benefits of the settlement; otherwise, not.

Some important particulars are missing in your original post:

1) When the matter is sub judice, was the settlement arrived at on the same issues and with the same union?
2) Was there a necessity of obtaining prior permission or approval from the tribunal in the matter of termination of the particular employee, and if so, did you comply with the provisions of Sec. 33 of the Industrial Disputes Act, 1947?
3) Is the effect of the settlement retrospective or prospective?
4) Is the settlement a formal one under Sec. 18(1) of the I.D Act, 1947?
5) Does it contain a special or specific clause for the withdrawal of all other demands not covered therein by the union?

Kindly provide the missing information for further clarification.

Thank you.