SETTLEMENT CASE OF Brynhildr Ltd

• Ritika Dutta | H22102

• Rohit Srivastava | H22103
• Sanchit Singhal | H22104
• Shinjini Mitra | H22105
• Shivam Gupta | H22106
• Shruti Sarda | H22107
CASE FACTS 1/2

The company employed about 3500 payroll staff and about 4000 contract workers
who are changed every 3 years of completion of service and 100 trainees in 2011

Payment of bonus to the permanent workmen under the Management was one of the
main bone of contention between the management and the Union due to which they
would frequently go on a strike 

To placate them, management paid ex-gratia payments as bonus 

The Management agreed to pay 56.5% to the actual earnings between 01.04.2011
and 31.03.2-21 to the permanent workmen including bonus and The settlement was
applicable only to permanent workmen who were on the rolls as on the day of the
settlement
CASE FACTS 2/2

Many contract labourers, trainees and probationer were later converted to regular
workers

The management fired some pay roll employees from some core areas to save costs
; deployed trainees / contract labourers in the position.

 Management offered a bonus of 25.5 % to the actual earnings between 01.04.17

and 31.03.2-21 to  the contract workers who became pay roll employees after the
settlement of 2012  

Agreement signed on 13th of October 2017 by 2 representatives  duly elected.

Notice of retrenchment was given to 15 permanent workmen who did not sign the
agreement citing loss of confidence; Contract workers brought in to replace them.
 SETTLEMENT

 According to the ID ACT 1947, Section 2(p)  “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.

 Originally, the act defined 'Settlement' as a "settlement arrived at in the course of conciliation proceedings".

Later, the ID (Amendment) Act of 1956 redefined the term to bring forward its current definition. 

 In the IR Code 2020, the definition of "Settlement" comes under Section 2(zi) and the change is that the term
'workmen' is not stated, instead 'WORKER' is mentioned. 
 Methods of Settlement 
Settlement can be the outcome of either a bipartite
'agreement' or a tripartite 'conciliation'. 
A settlement arrived at through the bipartite method is
binding only on the parties to the agreement while
that arrived at through conciliation is binding on all
parties defined under section 18 (3) (a), (b), (c) & (d).
Conciliation: It's a method of settlement where a third
party portrays a role in order to persuade the
representatives of the workers and the employers to
arrive at a mutual agreement. This method is
alternatively called 'Mediation'.
Section 18 of the ID Act

Persons on whom settlements and awards are binding-

18(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.
18(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

18(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-

(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 summon 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.
Figure 1: Memorandum of Settlement Figure 2: Form-H under MOS
The Industrial Dispute (Central) Rules, 1957
 The agreement signed earlier should be deemed
Are the Terms of
void as section 18(3) departs from the ordinary
settlement made under
law of contract in extending the operation of the
section 12(3) of the ID
settlement beyond the parties.
Act, 1947 extendable on
the basis of provisions of It makes it clear that the settlement will be binding
section 18(3) of the Act on all the workers who join the organisation
while such an expansion subsequently. 
is excluded by the Besides, since the agreement and the law are in
settlement itself? contravention of one another, if we look at things
from the point of view of what is more beneficial to
the workers, the employer must give the agreed
upon bonus of 56.5% to all permanent workers.
 Can the new   As per Section 57(3)(d) of IR Code 2020 and
joinees claim the Section 18(3)(d) of ID Act, it is stated that the
benefits of the settlement is binding on all persons who
subsequently become employed in that
settlement dated establishment.

26-12-2012?
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vs Indian Oil Corporation Ltd.
 Ceat Ltd vs Murphy India Employees' Union
 Ruby Coach Builders Limited vs Shri P.S. Ghose,
Member
 Can the Contract
Labourers who were
working with the When the company entered into the
settlement, the benefits would be applicable
company during the only to the regular workers & not the contract
settlement and who worker.

are continuing to
work with the However, many of the contract labors
company claim the subsequently joined the company as regular
workers. In that case, only the contract labors
benefits of the who joined as regular employees can claim the
settlement dated benefits of the settlement while the rest can't.

26-12-2012?
 The management may opt for a bipartite agreement and
arrive at a settlement according to 18(1) of IDA and 57(1)
of IRC. 
Can the
management 18. Persons on whom settlements and awards are
binding.
directly make a  (1) A settlement arrived at by agreement between the

settlement with employer and workman otherwise than in the course of

conciliation proceeding shall be binding on the parties to
Workmen? the agreement.
57. (1) A settlement arrived at by agreement between the
employer and worker otherwise than in the course of
conciliation proceeding shall be binding on the parties to
YES the agreement.
 According to Industrial Disputes (Central) Rules, 1957
Rule 58 2(b) and Form H,  - “in the case of workmen, by
any officer of a trade union of workmen or by five
representatives of workmen duly authorised in this behalf
at a meeting of the workmen held for the purpose.”
Is the agreement As per Industrial Dispute (Central) Rules, 1957, Rule 58(2)
(b) , any settlement arrived at in the course of conciliation or
between the otherwise, shall be signed by in the case of workmen by any
workers and the officer of a trade union of the workmen or by five
representatives of the workmen duly authorized in this behalf
management at the meeting of the workmen held for this purpose.

dated 13th of  In this case, the agreement was signed by just two

representatives of the workman duly elected by them in a
October 2017 meeting on 13th of October 2017 and was duly notarized.

correct?  Moreover, the previous settlement that was done was

giving higher benefits and according to section 18(3), it
would be binding on the new joinee as well. So, entering
NO into an agreement with the management was not correct. 
 Did the
Company act
legally by  As the epicentre is Malafide, it is case of Unfair Labor
employing Practice. 

trainees in The intent behind the termination of regular workmen may

place of regular be considered mala fide because Brynhildr havs done so
deliberately to avoid providing benefits of permanent
workmen? workmen 

NO 
THANK YOU !