PROJECT OF LABOUR &

INDUSTRIAL LAWS

ON

BINDING NATURE &

ENFORCEABILITY OF AWARD

Submitted To : Submitted By :
Dr. Virender Negi Kartik Bector
University Institute of B.Com LL.B. (Hons.)
Legal Studies ( UILS ) Semester-9
Panjab University Roll No. 276/16
Chandigarh

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 ACKNOWLEDGEMENT

I would like to acknowledge all those who provided me kind support and help to complete this
project report. I would like to extend my sincere thanks to all of them.

I am highly indebted to my teacher Dr. Virender Negi for providing me this opportunity to work on
the topic: Binding Nature & Enforceability of Award. through which I came to know about many
new things.

I would like to express my gratitude towards my parents and family members for their kind
Co-operation and encouragement that helped me in the completion of this project.

Any omission in the brief acknowledgement does not mean lack of gratitude.

Kartik Bector

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 INDEX

S.NO. PARTICULARS PAGE NO.

1 INTRODUCTION 5
2 WHAT IS AWARD? 6
3 ON WHOM AWARDS ARE BINDING 7
4 ENFORCEMENT OF AWARD 9
5 PERIOD OF OPERATION OF AWARDS 11
6 CONCLUSION 14
7 BIBLIOGRAPHY 15

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INTRODUCTION

The Industrial Dispute Act, 1947 which extends to the whole of India came into operation on the
first day of April 1947. As per Preamble of the said Act, it is enacted to make a provision for the
investigation and settlement of the dispute and certain other purposes such as recovery of money
from the employer in terms of Settlement or Award by making an application to the appropriate
government. The purpose and aim of the Industrial Disputes Act 1947 is to minimise the conflict
between labour and management and to ensure, as far as possible, Economic and Social Justice. The
act has made comprehensive provisions both for this settlement of disputes and prevention of
disputes in certain Industries. AN "AWARD" means "an interim or final determination by an
Industrial Tribunal of any industrial dispute or
any question relating thereto."1I This
defmition was substituted by the Industrial Disputes (Amendment and Miscellaneous
Provisions) Act, 1956 (36 of 1956), with effect from March 10, 1957. Under the
amended definition, besides industrial tribunals, labour courts and national industrial
tribunals have also been added as adjudicating authorities. An arbitration award made
under section lOA is also included in the definition. Thus, an order

shall be deemed to be an award in terms of section 2 (b) of the Act, if:

1. it is an interim or final determination of an industrial dispute, or

2. it is an interim or final determination of any question relating to such dispute, and
3. the said interim or final determination is made by a labour court, an industrial tribunal or a
national tribunal, or
4. it is an arbitration award under section lOA.

The first part of the definition of 'award' specifies a determination, final or interim. The second part
pertains to a determination of any question relating to the dispute. However, the basic postulate
common to both the parts is the existence of an industrial dispute. Actual or apprehended. The
determination contemplated is of the dispute, or a question relating thereto, on merits. The mere fact
that the order of a labour court is published under section 17(1) of the Industrial Disputes Act does
not confer on that the status of an award.2

The Calcutta High Court has held that the Parliament has chosen not to restrict the definition of
'award' to a determination by a labour court, industrial tribunal or national industrial tribunal

1 Section 2(b), Industrial Disputes Act, 1947.

2 Cox & Killgs (Agents) Ltd. v, Their Workmen, 1977 LIC 897 (SC)
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constituted under sections 7, 7A or 78 of the Industrial Disputes Act, 1947. While referring to an
arbitration award, it has specifically referred to an arbitration award under section lOA of the
Industrial Disputes Act, 1947. When the Supreme Court hears an appeal against an award and
modifies the same, the court is exercising the powers of the industrial tribunal itself and the
modified award is an award of the tribunal within the meaning of section 2(b) of the Industrial
Disputes Act, 1947.3 Also an order passed under section 33(5) of the Act by conciliation officer
under section 33(2)(b) of non-prosecution is not an award since such order would only mean that
there was no application under section 33(2)(b) of the Act4.

Thus, an award should satisfy the following requirements :

1. The parties to be bound by or to perform the award must be certain.
2. If the payment of a sum of money by one party to another is directed, the amount to be paid
must be specified; or some rule or direction given by which the sum to be paid may be
calculated without any doubt.
3. If the performance of any conditions or terms is directed by the award, such conditions or terms
must be clearly defined; and specific directions should be given as to their proper performance.
4. The time for performance of the award, or of any conditions or terms contained therein, must be
expressly fixed, or such directions given as will enable the time to be easily determined.

WHAT IS AWARD?

The judgment of an arbitrator is called his Award. Award (Judgement) of Arbitrators under section
10A is an Award5.

Definition of Award
Section 2(b) of the Industrial Dispute Act, 1947 defines Award as follows - According to Section
2(b) of the Industrial Disputes Act, 1947
Award means an interim or a final determination of any Industrial Dispute or of any
question relating thereto by any Labour Court, Industrial Tribunal or National Industrial
Tribunal and includes an arbitration award made under section 10A.

Ingredients of Award - To constitute Award under Section 2(b) of the Industrial Dispute Act, 1947
the following ingredients are to be satisfied-

3 National Tabacco Co. ofIndia Ltd. v, IT, 1979 LIe 524, 525.
4 Westinghouse Saxby Farmers Ltd. v. State o f West Bengal and Others, 1999 (3) LLN 979.
5 http://www.legalserviceindia.com/legal/article-570-awards-and-settlement.html
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1. An Award is an interim or final determination of an industrial dispute.
2. It is an Interim or final determination of any question relating to such dispute.
3. Such interim or final determination is made by any Labour Court, Industrial Tribunal or
National Industrial Tribunal.
4. Award (Judgement) of Arbitrators under section 10A is an award.

ON WHOM AWARDS ARE BINDING

According to Section 186 of the Industrial Disputes Act, 1947 Awards and Settlements are binding
on the following persons-

Persons on whom settlements and awards are binding.-

(1) 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.
(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-7
a. all parties to the industrial dispute;
b. 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 so summoned without proper cause;
c. 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;
d. 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.

Premier Automobiles Ltd v. Kamlekar Shantaram Wadke8, The Industrial Disputes Act was enacted
to make provision for the investigation and settlement of the industrial disputes. The Act envisages
collective bargaining, contracts between the workers' unions and management and the like which
are matters outside the realm of the common law or the law of contracts. The Act defines an
industrial dispute and what the term "settlement" means. Different authorities have been created at

6Industrial Disputes Act, 1947.

7 http://www.legalserviceindia.com/legal/article-570-awards-and-settlement.html
8 1975 AIR 2238
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different levels for settlement and adjudication of industrial disputes, conferring on them varied and
extensive powers. Where a dispute between the workers and management cannot be resolved by the
conciliation procedure envisaged under the Act, the dispute is referred by the Government to a
Labour Court or a Tribunal, the award of which becomes final and cannot be called in question by
any court in any manner whatsoever9. Under s. 18(1) a settlement arrived at by agreement between
the employer and workmen, otherwise than in the course of conciliation proceeding, shall be
binding on the parties to the agreement.

M.D. Hindustan Fasteners v. Nashik Workers Union10, Appellant herein is engaged in engineering
activities. Appellant was a sick unit as envisaged under the Sick Industrial Company (Special
Provision) Act, 1985. A settlement was arrived at on 1990 by and between the parties hereto in
regard to the demands raised on behalf of the workmen. The period covered by the settlement was
1989 to 1992. The workmen thereafter went on strike. Several demands were also raised a dispute
regarding wages due for a period of lock-out between January 1992 and June, 1993. It was
referred to the Industrial Tribunal. Appellant management contended that the dispute could not
arise in view of settlement arrived in between the parties. Appellant failed in its contention
before the Tribunal. Dismissing the appeal the S.C. observed that a settlement is aimed at
maintenance of industrial peace and harmony. A settlement though is required to be read in
its entirety so as to ascertain the intention of the parties. A charter of demands referred to
in the settlement did not relate to wages of the workmen during the period of lock-out. The parties
made it clear that the claim for the wages on the premise that the lock- out was illegal and was not
the subject matter of settlement.
Naresh Kumar Bansal v. G.S. Karla and another11, a dispute relating to the termination of
Cashier-cum-Godown keeper was referred for adjudication. The claim of the workman was
rejecting by the tribunal on the ground of settlement between union and management under sec.
18(1). It was held that since the workman was neither a member of the union nor he had authorised
the union to represent his case nor was a party to the settlement, therefore, the settlement was not
binding on him. In order that a settlement between the employer and the workmen may be binding
on them, it has to be arrived at by agreement between the workmen and the employer. Where the
workmen are represented by a recognised union, the settlement may be arrived at between the
employer and the union. If there is a recognized union and the constitution of the union provides

9 http://journal.lawmantra.co.in/wp-content/uploads/2016/11/3.pdf
10 2007 I L.L.J. 434 (S.C.)
11 (1993) II Lab LJ 377 (Delhi)
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that any of its office-bearer can enter into a settlement with the management, a settlement may be
arrived at between the employer and such office-bearers. But the constitution does not so provide
specifically, the office-bearers should have the necessary authorisation by the executive committee
of the union or by the workmen.

An award and 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.
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.

A settlement arrived at in the course of conciliation proceedings and an award of a Labour Court,
Tribunal or National Tribunal 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 so 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;

All persons who were employed in the establishment or part of the establishment on the date of the
dispute and all persons who subsequently become employed in that establishment or part.

Breach of Award12
If any person who commits breach of any terms of a Award is liable for punishment. The
punishment provided for is imprisonment which may extend to 6 months or with fine or with both.
Section 29 of the Industrial Disputes Act provides for the punishment of any person who commits a
breach of any term of an award which is binding upon him under the Act. The punishment provided
for is imprisonment for a term which may extend to six months, or fine, or both. In the case of a
continuing breach after the first conviction, additional punishment is a further fine of upto two
hundred rupees far every day during which the breach continues. By the latter part of the section,
the court, if it fines the offender, is given the power to direct payment of the whole or any part of
the fine realised from the offender by way of compensation to any person who, in the opinion of
the court, has been injured by the breach. Thus, the ingredients of the offence under section 29 are

1. a breach of any term of a settlement or award,

2. the binding character of the settlement or award upon the person who is charged with the
offence, and

12 http://14.139.60.114:8080/jspui/bitstream/123456789/731/10/Enforcement%20of%20Awards.pdf
9
3. the award is an award within the meaning of section 2(b)

ENFORCEMENT OF AWARD

An award may be enforced of the following ways:

1. The aggrieved party may apply to Appropriate Government for prosecuting the defaulting party
under section 29 or section 31 of this Act.
2. Where any money is payable by the employer to a workman, the workman may move the
Appropriate Government for recovery of the money due to him under award.
3. The party in whose favour the award has been granted may file a suit and obtain a decree,
which shall be enforced by execution under the provisions of the Civil Procedure Code.

By the amending Act (43 of 1953), the legislature took a further step by adding Chapter V-A to the
Act, dealing with lay-out and retrendment.13 In this context section 33C reads as under 14:
(1) Where any money is due to a workman from an employer under a settlement or an award or
under the provisions of Chapter V-A, the workman himself or any other person authorised by him in
writing in this behalf, or, in the case of the death of the workman, his assignee or heirs may, without
prejudice to any other mode of recovery, make an application to the appropriate Government for the
recovery of the money due to him, and if the appropriate Government is satisfied that any money is
so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the
same in the same manner as an arrear of land revenue :
Provided that every such application shall be made within one year from the date on which the
money became due to the workman from the employer ;
Provided further that any such application may be entertained after the expiry of the said period of
one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not
making the application within the said period.
(2) Where any workman is entitled to receive from the employer any money or any benefit which is
capable of being computed in terms of money and if any question arises as to the amount of money
due or as to the amount at which such benefit should be computed. then the question may. subject to
any rules that may be made under this Act. be decided by such Labour Court as may be specified in
this behalf by the appropriate Government within a period not exceeding three months.
Provided that where the presiding officer of a Labour Court considers it necessary or expedient so
to do. he may, for reasons to be recorded in writing, extend such period by such further period as he
may think fit.
(3) For the purposes of computing the money value of a benefit, the Labour Court may, if it so
thinks fit, appoint a Commissioner who shall. After taking such evidence as may be necessary.

13 https://mahakamgar.maharashtra.gov.in/images/pdf/industrial-disputes-act-1947.pdf
14 http://14.139.60.114:8080/jspui/bitstream/123456789/731/10/Enforcement%20of%20Awards.pdf
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Submit a report to the Labour Court and the Labour Court shall determine the amount after
considering the report of the Commissioner and other circumstances of the case.
(4) The decision of the Labour Court shall be forwarded by it to the appropriate Government and
any amount found due by the Labour Court may be recovered in the manner provided for in sub-
section (1).
(5) Where workmen employed under the same employer are entitled to receive from him any
money or any benefit capable of being computed in terms of money. then, subject to such rules as
may be made in this behalf. a single application for the recovery of the amount due may be made on
behalf of or in respect of any number of such workmen.

Initially at the time of enactment of the Industrial Disputes Act. 1947 the machinery for the
enforcement of awards was very defective. The only remedy available was by way of prosecution
and punishment under section 2915. There was no statutory procedure for the recovery of money
awarded to workmen. The workmen could resort to the common law right to sue the employer
which was held by Calcutta High Court,27 but, the workmen being numerous and usually illiterate
and poor and the amount due to each being normally small, the procedure presented practical
difficulties.

Section 33C(1) provides that where any money is due to a workman from employer in the
circumstances stated therein, and if the appropriate government is satisfied on an application made
to it that the money is so due, it shall issue a certificate for the amount to the collector. The question
to be presently considered is the extent of the jurisdiction of the appropriate government under
section 33C(1). A certificate under section 33C(1) can be issued only in a case where the money due
has already been ascertained. The labour commissioner cannot, on his own, proceed to ascertain the
amount and issue the recovery certificate.16

PERIOD OF OPERATION OF AWARDS

Section 1917 of the Industrial Disputes Act 1947 provides for the period of operation of Award and
Settlement18.

A settlement shall come into operation on such date as is agreed upon by the parties to the dispute,
and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by
the parties to the dispute.
15 Industrial Disputes Act, 1947.
16 Malout Transport Co. (P) Ltd. v, State of Punjab, 1959 I LLJ 641. 642; affirmed in State o f Punjab v, Malout Transport Co. (P)
Ltd. 1963 " LLJ 40.

17 Industrial Disputes Act, 1947.

18 http://www.legalserviceindia.com/legal/article-570-awards-and-settlement.html
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Such settlement shall be binding for such period as is agreed upon by the parties, and if no such
period is agreed upon, for a period of six months from the date on which the memorandum of
settlement is signed by the parties to the dispute, and shall continue to be binding on the parties
after the expiry of the period aforesaid, until the expiry of two months from the date on which a
notice in writing of an intention to terminate the settlement is given by one of the parties to the
other party or parties to the settlement.

An award shall, subject to the provisions of this section, remain in operation for a period of one year
from the date on which the award becomes enforceable under section 17A.

Provided that the appropriate Government may reduce the said period and fix such period as it
thinks fit: Provided further that the appropriate Government may, before the expiry of the said
period, extend the period of operation by any period not exceeding one year at a time as it thinks fit
so, however, that the total period of operation of an award does not exceed three years from the date
on which it came into operation.

Where the appropriate Government, whether of its own motion or on the application of any
party bound by the award, considers that since the award was made, there has been a material
change in the circumstances on which it was based, the appropriate Government may refer the
award or a part of it to a Labour Court, if the award was that of a Labour Court or to a
Tribunal, if the award was that of a Tribunal or of a National Tribunal, for decision whether the
period of operation should not, by reason of such change, be shortened and the decision of
Labour Court or the Tribunal, as the case may be on such reference shall be final.

I.L.C. Manufacturers v. Workmen19 an agreement is for a fixed period it will not only continue to be
binding for the duration of the period of settlement but thereafter also until it is terminated by a
notice in writing and even then it will continue for a period of two months from the date of each
notice. It is no doubt true that the notice must be in writing but it can be inferred from
correspondence between the parties and there cannot be any waiver by conduct or implication of the
requirement of written notice. The award or settlement, under the ID Act replace the earlier contract
of service and is given plenary effect as between the parties. Earlier contract is not suspended but it
is superseded. Once the earlier contract is extinguished and fresh conditions of service are created by
the award or the settlement, the inevitable consequence is that even though the period of operation
and the span of binding force expires, on the notice to terminate the contract being given, contract
continues to govern the relations between the parties until a new agreement by way of settlement or
statutory contract by the force of an award takes place.

19 AIR 1972 SC 343

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 CONCLUSION

A settlement is an agreement reached among the parties to a workers' compensation claim. This
includes you, your employer and the workers' compensation insurer (unless your employer is self-
insured). This is a type of contract, and it may bar you from seeking further compensation for your
injury.

An award, on the other hand, is granted to you by the workers' compensation court. This
may include medical benefits or other types of workers' compensation awards based
on the specifics of your injury. For example, a judge can order - or an insurance company can
admit for - temporary and permanent disability benefits. This isn't a settlement. You don't
have to sign away any rights to get these benefits

According to Section 2(b) of the Industrial Dispute Act, 1947 defines Award as follows - According
to Section 2(b) of the Industrial Disputes Act, 1947 Award means an interim or a final determination
of any Industrial Dispute or of any question relating thereto by any Labour Court, Industrial

Tribunal or National Industrial Tribunal and includes an arbitration award made under section
10A.
According to Section2(p) of the Industrial Dispute Act, 1947 Settlement means a settlement
arrived at in the course of conciliation proceeding and includes a written agreement between
the employer and workmen arrived at otherwise than in the course of conciliation

proceeding where such agreement has been signed by the parties thereto in such manner as may be
prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate
Government and the conciliation officer.

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 BIBLIOGRAPHY

• www.legal servicesindia.com
• mahakamgar.maharashtra.gov.in
• www.aironline.in
• www.lawmantra.com
• Labour and Industrial Law by Meenu Paul

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