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Settlements under the ID Act can be entered between Management and Workman even outside the court/conciliation proceedings: High Court of Delhi

Settlements can be entered into between Management and Workman even outside the court/conciliation proceedings as is clear from Section 18(1) ID Act. Such settlements would be valid and legal. Purpose of providing such provisions of settlement is that there is finality to the settlement and parties should not be relegated to continue to avail of their legal remedies leading to delays involving expending of precious judicial time and the same was upheld by High Court of Delhi through the learned bench led by Justice Prathiba M. Sinngh in the case of M/S WEARWELL (INDIA) PRIVATE LIMITED vs. MOHD. NIZAM [W.P.(C) 2034/2022] on 02.02.2022.

The facts of the case are that Respondent (Workman) was working as a Tailor with the Petitioner (Management) and the last drawn salary was Rs.11,830. The Management claims that it had placed the Workman under suspension on 16th December, 2017 and a charge sheet was issued. However, the claim of the Workman was that he was terminated by the Management on 18th December 2017.

The Workman then approached the Conciliation Officer under the Industrial Disputes Act, 1947 wherein he along with 21 other workmen he entered into a settlement with the Management. However, disputes thereafter arose in respect of the amount payable as per the terms of the said settlement entered into before the Conciliation officer. This led to the Workman approaching the authority under section 15(2) of the Act.

The petitioner’s counsel submitted that since the Workman did not appear and confirm the settlement, the amount of pre-deposit would not be liable to be refunded. Pre-deposit amount cannot be refunded on the ground that the settlement has not been acknowledged and accepted by the Workman.

In view of the facts and circumstances of the cases, the Court set aside the impugned order and disposed of the petition as no useful purpose would have been served in again issuing notice to the Workman inasmuch as it appeared to this Court that the Workman was satisfied with the settlement and did not wish to incur further costs.

The Court observed that, “Settlements can be entered into between Management and Workman even outside the court/conciliation proceedings as is clear from Section 18(1) ID Act. Such settlements would be valid and legal. Purpose of providing such provisions of settlement is that there is finality to the settlement and parties should not be relegated to continue to avail of their legal remedies leading to delays involving expending of precious judicial time”.

Click here to read the Judgment

Judgment reviewed by – Shristi Suman

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