Section 19 of Industrial Disputes Act 1947: Period of Operation of Settlements and Awards
Section 19 of the Industrial Disputes Act, 1947 governs when a settlement begins to operate, how long settlements and awards remain operative or binding, the procedure for termination, and the power to reduce or extend the period of operation of an award.
Section 19 - Statutory text
19. Period of operation of settlements and awards.
(1) 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.
(2) 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.
(3) 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 any award does not exceed three years from the date on which it came into operation.
(4) 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 the Labour Court or the Tribunal, as the case may be, on such reference shall be final.
(5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.
(6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
(7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.
How Section 19 operates
| Subject | Rule under Section 19 |
|---|---|
| Settlement commencement | Date agreed by the parties; if none, date the memorandum is signed. |
| Settlement duration | Agreed period; if none, six months from signing, followed by continued binding effect until two months after valid written termination notice. |
| Award operation | Ordinarily one year from enforceability under Section 17A. |
| Extension of award | Appropriate Government may extend it before expiry, not more than one year at a time, subject to an aggregate maximum of three years from commencement. |
| Termination notice | Sub-sections (2), (6) and (7) regulate the notice and representative-majority requirement. |
Important definitions and connected provisions
Settlement: Section 2(p) defines "settlement" to include a settlement arrived at in conciliation and a written agreement between employer and workmen reached otherwise than in conciliation where the statutory requirements are fulfilled.
Award: Section 2(b) defines "award" as an interim or final determination of an industrial dispute or a question relating to it by a Labour Court, Industrial Tribunal or National Industrial Tribunal, and includes an arbitration award under Section 10A.
Appropriate Government: Section 2(a) determines whether the Central Government or State Government is the appropriate Government in relation to the industrial dispute concerned.
Section 19 and enforceability under Section 17A
For an award, the one-year period in Section 19(3) is linked to the date on which the award becomes enforceable under Section 17A. Publication under Section 17, enforceability under Section 17A, binding effect under Section 18, and operation under Section 19 are therefore connected parts of the statutory scheme.
Material change in circumstances - Section 19(4)
Where circumstances underlying an award have materially changed, the appropriate Government may act on its own motion or on an application by a party bound by the award. It may refer the relevant award or part to the Labour Court or Tribunal specified in sub-section (4) for a decision on whether its operational period should be shortened.
State amendments recorded in the source page
Maharashtra
The source page records Maharashtra Act No. 1 of 1972 as inserting sub-section (2A), under which a recognised union may terminate a settlement by giving two months' written notice to the employer in the circumstances stated in the amendment. It also records an addition to sub-section (7) concerning a recognised union for an undertaking.
West Bengal
The source page records a West Bengal amendment to sub-section (3), referring to substitution of the statutory cross-reference by a reference to Section 17AA, citing West Bengal Act Nos. 34 of 1983 and 57 of 1980. State-specific amendments should be checked against the applicable official State legislation before use in a particular proceeding.
Official legal sources
For authoritative statutory text, refer to the official Industrial Disputes Act, 1947 on India Code and the Ministry of Labour and Employment Acts and Policies portal.