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Upon a settlement being entered into, parties may place the same before the forum concerned and the same can be recorded, upon the Court being satisfied that the terms are legal, just and fair. A settlement under Section 18(1) would be binding on the parties. Settlements reached before the conciliation officers or boards are specifically dealt with by sections 12(2) and 13(3) and the same are made binding under section 18 and the same was upheld by High Court of Delhi through the learned bench led by Justice Prathiba M. Singh in the case of M/S WEARWELL (INDIA) PRIVATE LIMITED vs. RAJU [W.P.(C) 2184/2022] on 04.02.2022.

The facts of the case are that the Respondent/Workman employed with the Petitioner/Management. The Management claims that it had placed the Workman under suspension 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, 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. The Petitioner has therefore, approached the Appellate Court by way of an appeal under Section 17 of the Act.

The petitioner’s counsel submitted that during the pendency of the said appeal, the parties entered into a settlement as per which the Respondent/Workman agreed to accept a lumpsum amount to settle the said dispute. It was further submitted that Section 18(1) of the Industrial Disputes Act, 1947 shows that a settlement can be arrived at between the parties otherwise than in the course of conciliation.

The respondent’s counsel contended that since the Workman did not confirm the settlement agreement, the settlement cannot be recorded by the Court.

Since the Workman affixed his signature to the settlement agreement and has also encashed the cheque issued by the Management, the Court found no reason as to why the settlement should not be taken note of and recorded.

The Court observed that “A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.  Upon a settlement being entered into, parties may place the same before the forum concerned and the same can be recorded, upon the Court being satisfied that the terms are legal, just and fair. A settlement under Section 18(1) would be binding on the parties. Settlements reached before the conciliation officers or boards are specifically dealt with by sections 12(2) and 13(3) and the same are made binding under section 18.”

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Judgment reviewed by – Shristi Suman