Madras High Court
Reserved On 27.10.2025 vs General Secretary on 9 January, 2026
2026:MHC:359
WP.No.13285/2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON 27.10.2025
PRONOUNCED ON 09.01.2026
CORAM
THE HONOURABLE MRS. JUSTICE N.MALA
WP.No.13285/2025 & WMP.No.14868/2025
Management
Caterpillar India Private Limited
Melnallathur Gramam
Thiruvallur District 602 002
rep.by its Authorised Signatory. .. Petitioner
Versus
General Secretary
Caterpillar India Private Thozhilalar Sangam
Melnallathur Gramam
Thiruvallur District 602 002. .. Respondent
Prayer in WP.No.13285/2025:Writ petition filed under Article 226 of the
Constitution of India praying for issuance of a writ of certiorarified
mandamus calling for the records from the Industrial Tribunal, Chennai in
IA.No.1/2024 in OP.No.18/2023, to quash the order dated 25.03.2025 and
direct the Industrial Tribunal to pass an Award in terms of the Section 18[1]
Settlement signed by the Management with the majority of the workmen.
For Petitioner : Mr.A.L.Somayaji, Senior counsel
for Mr.G.Anandgopalan for
Agam Legal Advocates
For Respondent : Mr.V.Prakash, Senior counsel
for Mr.B.Gokul
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ORDER
(1)This writ petition is filed by the Management of Caterpillar India Private
Limited for a writ of certiorarified mandamus, to quash the order dated
25.03.2025, passed in I.A.No.1 of 2024 in OP No.18 of 2023, by the
Industrial Tribunal, Chennai, and further to direct the Tribunal to pass an
order in terms of Section 18[1] settlement signed by the Management with
the majority of the workmen.
(2)For the sake of convenience, the petitioner will be referred to as
‘Management’ and the respondent will be referred to as ‘Union’.
FACTS IN BRIEF:
MANAGEMENT’S CASE:
(3)The Management is a part of a Multi-National Company in existence for
many decades and is engaged in the manufacture of off-road heavy
vehicles, such as earth-movers, etc and also exports manufactured earth
moving vehicles to various countries across the world. The Management
has a history of signing long-term wage settlements through collective
bargaining with the respondent Union. The last of such settlements
covered the period between 2015–2018. The Management states that
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WP.No.13285/2025though the Union was repeatedly invited for negotiations after the
settlement of 2016 expired on 31.12.2018, the internal office-bearers did
not participate, resulting in a stalemate for more than ten months, due to
which the workmen themselves voluntarily approached the management
and signed individual settlements under Section 18[1] on 04.11.2019 and
05.11.2019. The Union hence raised an industrial dispute alleging unfair
labour practices which was referred as O.P.No.23 of 2019. However, the
dispute was not pursued by the Union since all workmen signed
individual settlements. Later, the Tribunal passed an Award on
12.10.2021. The Management states that after the settlement dated
04.11.2019, ended on 31.12.2022, the Management and the Union
submitted their respective charter of demands on 12.10.2022 and
23.12.2022. Since the internal office-bearers again failed to participate in
the discussions despite notices and invitations, a settlement could not be
reached and so an industrial dispute was referred to the Industrial
Tribunal, Chennai, and numbered as O.P. No. 18 of 2023. The
Management states that during the pendency of the dispute, due to
prolonged inaction from the union, 230 out of 326 workmen approached
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WP.No.13285/2025the Management and voluntarily accepted the wage proposal. Hence, a
Section 18[1] settlement was signed on 14.02.2023 and 15.02.2023.
Thereafter, some more workmen signed the 18[1] settlement and finally
246 out of the 326 workmen signed the settlement. The Management
states that since the office bearers of the Union attempted to influence
workers to deny voluntary consent, the management appointed a retired
Judicial Magistrate as an observer to verify free consent. The observer
verified the consent of the workmen on 20.02.2023, 21.02.2023 and
08.03.2023 and confirmed that 246 workmen voluntarily signed the
Section 18[1] settlement. The Management states that since majority of
the workmen (246/326) had signed the 18[1] settlement, the Management
filed an I.A.No. 1 of 2024, seeking an Award in terms of the 18[1]
settlement signed upto 31.12.2026. The Management states that the
Industrial Tribunal passed an order on 25.03.2025, dismissing the I.A.No.
1 of 2024, despite its own finding that the majority had signed voluntarily
and despite the settled legal position that an Award must be passed when
the majority workers accept a settlement. The Management further states
that even though the Management filed a Memo on 29.01.2024,
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expressing its readiness to extend the benefits of the settlement to the
remaining non-signatory workmen without prejudice to their rights in the
pending dispute before the Court, the Union rejected the proposal.
Contrarily, the respondent Union filed I.A.No. 2 of 2024, seeking an
Interim relief of Rs.20,000/- per month. The Management states that the
Industrial Tribunal erroneously allowed the respondent Union’s prayer for
an interim relief of Rs.20,000/- per month, to the non-signatory workmen
by its order dated 25.03.2025, overlooking not only the fact that a
substantial majority of workmen had accepted the settlement, but also that
the Union had not furnished any explanation on what basis Rs.20,000/-
was claimed. The Management states that the tribunal failed to note that
the claim of the Union was much higher than the wage increase under the
Settlement. The Management, under the aforesaid circumstances, filed
the writ petitions in W.P.Nos. 13285 & 13279 of 2025, praying to quash
the order dated 20.03.2025 passed by the Industrial Tribunal in I.A.No’s. 1
of 2024 and I.A.No. 2 of 2024 filed in O.P.No. 18 of 2023 and for further
direction to the Industrial tribunal to pass an Award in terms of the 18[1]
settlement.
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UNION’S CASE:
(4)The Union did not file a counter in WP.Nos. 13285 & 13279 of 2025.
The Union’s counsel prayed that the averments in WP No.23686 of 2025
filed by it, may be treated as counter to the Management’s writ petition’s.
The Union filed W.P.No. 23686 of 2025, against the Government and the
Management, for a Writ of Mandamus directing the 1 st respondent
Government to pass orders on the dispute raised by it before the 2 nd
respondent, on 18.02.2019, covered by the conciliation failure report
dated 23.12.2019, under Section 10(1) of the Industrial Disputes Act,
expeditiously within a time stipulated by this Court.
(5)The Union states that it is a recognized Union in the Management’s
factory, having previously signed five long-term settlements, with the last
wage settlement expiring in December 2018. Following the expiry of the
last settlement, the Union raised a charter of demands for wage revision
for the period 2019 to 2022, but the Management refused to negotiate
with external office bearers of the Union. The Union states that since the
management failed to negotiate on the charter of Demands of the Union,
an industrial dispute was raised before the 2 nd respondent i.e. Deputy
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Commissioner of Labour, Conciliation-II, on 18.02.2019. The Union
states that the Management deliberately undermined the Collective
Bargaining process by refusing to negotiate with external office bearers
and suspending the then General Secretary on 12.02.2019. The
Management subsequently obtained an objectionable ’18[1] settlement’
from individual workman under threat and coercion on 04.11.2019. The
Union states that conciliation in the dispute raised on 18.02.2019, ended
in failure on 23.12.2019. The Commissioner of Labour recorded a failure
report on 23.12.2019 (Ref:ந.க.எண்.அ/141/2019) and forwarded it to the
Government, but the Government failed to pass any orders referring the
dispute for adjudication, constraining the Union to file W.P.No. 23686 of
2025 for the aforesaid relief. The Union states that after the objectionable
18[1] settlement expired on 31.12.2022, a new charter of demands for the
period 2023 to 2025 was placed on 23.12.2022, which the management
again refused to negotiate, objecting to the participation of external office-
bearers in the negotiations. The Union states that an industrial dispute
dated 30.01.2023, was raised regarding wage revision for 2023–2025, and
as conciliation failed, the matter was referred for adjudication by the
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Government via G.O.(D).No.667 dated 15.12.2023, now pending in
O.P.No.18 of 2023. The Union also separately challenged the legality of
the initial objectionable “18[1] settlement” dated 04.11.2019, which was
referred via G.O.(D).No. 296 dated 12.06.2024 and is pending as O.P. No.
08 of 2025. The respondent/Union states that during the pendency of O.P.
No. 18 of 2023, the Management, signed individual 18[1] Settlements
with individual workman [246/326]. On the basis of the said individual
Settlements, the Management filed IA No. 1 of 2024, seeking an Award in
terms of the settlement, but the Industrial Tribunal, dismissed the petition
on 25.03.2025.
(6)The Union states that the entire history of the dispute, coupled with the
suspension of the General Secretary and obtaining of individual
settlements under duress, proved that the Management had engaged in
Unfair Labour Practice with a view to bypassing the recognized Union
and destroying the spirit of Collective Bargaining. The Union therefore
states that the Tribunal was justified in rejecting the Management’s prayer
for an Award in terms of individual Settlements (IA No. 1 of 2024) and in
protecting the non-signatory workmen by granting interim relief to them
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(IA No. 2 of 2024). The Labour Court, after considering the entire
materials on record, concluded that though the individual settlements
entered into between the Management and the majority of individual
workman [247/326] were valid, the same were however not binding on
the Union and its non signatory members. The Labour Court, while
rejecting the Management’s application for passing of an Award, in terms
of individual 18[1] settlements, allowed the Union’s application for grant
of interim Award of Rs.20,000/- per month per worker, pending the
dispute. Aggrieved by the impugned orders passed by the Industrial
Tribunal, the Management preferred WP.Nos.13285 and 13279/2025.
(7)The Union further states that due to prolonged inaction of the Government
on the conciliation failure report dated 23.12.2019 bearing Ref:
ந.க.எண்.அ/141/2019, the respondent/Union filed the writ petition,
seeking a Writ of Mandamus directing the Government to pass orders
under Section 10(1) of the Industrial Disputes Act, pursuant to the
conciliation failure report dated 23.12.2019, expeditiously.
ARGUMENTS ADVANCED:
(8)The learned Senior Counsel for the Management submitted that the
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WP.No.13285/2025Industrial Disputes Act, 1947, [hereinafter called ‘the ID Act‘] promotes
collective bargaining for convenience, but does not bar settlements with
individual workman. The scheme of the Act requires the consent of the
majority of workmen, making the settlement binding even on the
dissenting minority workmen. The learned Senior Counsel, submitted that
admittedly 246 out of 326 workmen had signed the settlement, and even
as per the finding of the Industrial Tribunal, there was no evidence of
threat or coercion and hence, the Settlements were voluntary and valid.
The learned Senior Counsel, submitted that the Union failed to discharge
the burden of proving that the settlements were unfair or involuntary. The
learned Senior Counsel, submitted that a settlement signed by a vast
majority of workmen, containing identical clauses, cannot be deemed an
“individual settlement”, but must be treated as a collective settlement
binding on all, since judicial precedents ordain that majority settlements,
accepted with “eyes open,” are presumed to be just and fair and ought not
to be ignored. The learned Senior Counsel, therefore submitted that the
Tribunal erred in dismissing the Management’s application (IA No. 1 of
2024) seeking to record an Award in terms of the majority settlement.
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Furthermore, the learned Senior Counsel, submitted that the Tribunal’s
decision to grant interim relief (IA No. 2 of 2024) was flawed as the non-
signatory minority cannot claim balance of convenience when the
majority had already accepted the terms of the settlement. The learned
Senior Counsel, submitted that the Union’s opposition is legally untenable
as Section 18[1] uses the term “workman” (singular), demonstrating
legislative intent to allow individual settlements, even for collective
disputes. The Management’s historical engagement (five settlements
between 2003 and 2018) refutes the allegation of undermining collective
bargaining. The learned Senior Counsel, therefore prayed that the
Management’s writ petitions be allowed.
(9)The learned Senior Counsel, for the Union submitted that the Industrial
Disputes Act, is a special legislation, whose foundational principle is to
regulate and preserve Collective Bargaining. The scheme of the Act is
based on the premise that an individual worker is in a weaker position
than the employer, requiring collective action to achieve fair terms. The
learned Senior Counsel, submitted that the dispute concerning wages, is a
collective dispute covered by Section 2[k] of the ID Act and therefore,
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requires to be settled collectively, and not individually, as individual
workman recedes to the background in Collective Bargaining
negotiations. The learned Senior Counsel, submitted that the expression
“workman” in the singular form in Section 18[1] must be read as plural in
the case of collective disputes under Section 2[k], as Section 2A (allowing
individual’s locus standi) was only introduced in 1965. The learned Senior
Counsel, submitted that permitting individual settlements for collective
disputes would result in death blow to collective bargaining, end trade
Unionism and violate the object and provisions of the ID Act. The learned
Senior Counsel, submitted that the Management’s refusal to negotiate with
outside office bearers amounted to Unfair Labour Practice. The learned
Senior Counsel, submitted that the Trade Unions Act, 1926, and ILO
principles ensure that outside office bearers participate to guarantee the
independence of the recognized union to bargain without fear. The
learned Senior Counsel, submitted that the Division Bench judgment of
the Madras High Court in L. Balasubramaniam case, is a binding
precedent that distinguishes the Supreme Court’s SBI case and supports
the right of external office bearers to negotiate. The learned Senior
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Counsel, submitted that the signatures were not obtained out of free will
or volition, but under the fear instilled by the Management in suspending
key office bearers immediately before securing individual signatures. The
learned Senior Counsel, submitted that the Management’s claim of an
“Independent Observer” (Retired Judicial Magistrate) was a mere eye
wash, as the observer previously acted as an Enquiry Officer for the
Management. Even the video footage showed that there was no
negotiation, but only signatures being obtained by the departmental heads
(Section Managers/VSMs), who hold authority over the workers. The
learned Senior Counsel, submitted that the Management engaged in
Unfair Labour Practice by systematically refusing to negotiate with
outside office bearers since 2019. The learned Senior Counsel, for the
respondent submitted that a settlement of Section 2[k] dispute must be
signed as prescribed under Rule 58 and 25 of the Central Rules and Tamil
Nadu Industrial Disputes Rules, respectively, to be legal and binding.
Since Rules require signing by the Union office bearers or elected
representatives, the individual signatures obtained by the Management do
not conform to the prescribed manner and are thus illegal and invalid.
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The learned Senior Counsel, submitted that the Industrial Tribunal’s order
dismissing the Management’s application (IA No. 1/2024) to record an
Award and granting interim relief does not suffer from any manifest error
of law to merit interference under the limited scope of Article 226, in
Certiorari jurisdiction.
(10)Heard both the learned Senior Counsels and perused the materials placed
on record.
(11)At the threshold, I would want to point out that the learned Senior
counsels on both sides agree that the dispute as projected before this
Court, namely, that a collective dispute relating to wage revision raised by
the Union under Section 2[k] of the Act, cannot be settled by individual
workman under Section 18[1] of the Industrial Disputes Act, has never
arisen before any other Court and hence, there is no direct precedent on
the issue raised before this Court.
(12)Before adverting to the merits of the case, this Court considers it apposite
to advert to the scheme of the Industrial Disputes Act, 1947.
(13)The preamble of the Industrial Disputes Act, shows that it was enacted to
make provision for investigation and settlement of industrial disputes and
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for certain other purposes.
(14)Chapter I is the definition section. Section 2(j) defines “industry” as
any business, trade, undertaking, manufacture or calling of employers and
includes any calling, service, employment, handicraft or industrial
occupation or avocation of workmen. Section 2(k) defines “industrial
dispute” as any dispute or difference between employers and employers,
or between employers and workmen, or between workmen and workmen,
which is connected with the employment or non-employment or the terms
of employment or with the conditions of labour, of any person. Section
2(p) defines “settlement”, as a settlement arrived at in the course of
conciliation proceeding and includes a written agreement between the
employer and workmen arrived at otherwise 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. Section 2(qq) defines “trade union”, as a trade
union registered under the Trade Unions Act, 1926. Section 2(ra) defines
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“unfair labour practice”, as any of the practices specified in the Fifth
Schedule. Section 2A was introduced by Act 35 of 1965 and relates to
Dismissal etc. of an individual workman and deems it to be an industrial
dispute.
(15)Chapter II of the Act relates to the authorities under the Act which are
the 1) Works Committee 2) Conciliation officers 3) Board of Conciliation
4) Courts of Inquiry 5) Courts of industrial Tribunal. The aforesaid
authorities are conferred with different powers and the purpose for which
they are set up and their functions are also prescribed in the Act.
(16)Chapter III provides for reference of disputes to Boards, Courts or
Tribunals and the main Section is Section 10, which provides for
reference of dispute by the appropriate Government for settlement or
adjudication. Chapter IV, prescribes Procedure, Powers and duties of
authorities constituted under the Act. Chapter V, contains provisions
regarding strikes and lock-outs. Chapter V-A, which was introduced by
Act 43 of 1953, contains provisions for lay-off and retrenchment of
workmen. Chapter V-B provides for special provisions relating to lay off,
retrenchment and closure in certain establishments. Chapter V-C refers
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to unfair labour practices. Chapter VI relates to Penalties. Chapter VII
relates to Miscellaneous provisions.
(17)There are Five Schedules. First Schedule, relates to industries which
may be declared as public utility services under sub-clause (vi) of clause
(n) of section 2. Second Schedule, relates to the matters within the
jurisdiction of Labour Courts. Third Schedule, relates to the matters
within the jurisdiction of Industrial Tribunals. Fourth Schedule, relates to
conditions of service for change of which notice is to be given and the
Fifth Schedule, relates to unfair labour practise. This is the overall
scheme of the Act.
(18)Before proceeding further with the merits of the case, the object of the
Act as explained in a consistent line of judgments of the Hon’ble Supreme
Court are referred to.
(19)In the case of The Workmen and Others Versus M/s.Hindustan Lever
Ltd., reported in 1984 (1) SCC 728, the Hon’ble Supreme Court,
succinctly expounded the object of the Act as follows:
“…..The Act was designed to provide a
self-contained code to compel the parties to resort17
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WP.No.13285/2025to industrial arbitration for the resolution of
existing or apprehended disputes without
prescribing statutory norms for varied and
variegated industrial relation norms so that the
forums created for resolution of disputes may
remain unhampered by any statutory control and
devise rational norms keeping pace with improved
industrial relations reflecting and imbibing socio-
economic justice. If this is the underlying object
behind enactment of the Act, the Court by
interpretative process must strive to reduce the
field of conflict and expand the area of agreement
and show its preference for upholding agreements
sanctified by mutuality and consensus in larger
public interest, namely, to eschew industrial strife,
confrontation and consequent wastage.”(20)This Court in the case of Management of Binny Limited Versus
Presiding Officer and others, reported in 1997 SCC OnLine Mad 1463,
also considered the object of the Act, and held as follows:
“19. It is not the object of the industrial law
that disputes should be kept alive for long number
of years or the adjudication should be dilatory. If18
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WP.No.13285/2025the parties themselves have reached the settlement,
that is the best possible manner of resolving the
disputes, and when it is the case pleaded before the
Tribunal that all the workmen concerned have, in
fact, reached such settlements, such plea should be
examined, and should be decided before embarking
on a long-drawn enquiry, which may turn out to be
a wholly a futile exercise, if the settlement is found
to be fair and legal. The Tribunal in the impugned
order has lost sight of this object of industrial
adjudication.”(21)In Ajaib Singh Versus Sirhind Cooperative Marketing-cum-Processing
Service Society Limited and Another, reported in 1999 (6) SCC 82. The
Hon’ble Supreme Court observed that the provisions of the Act, have to be
interpreted in a manner which advances the object of the legislature
contemplated in the statement of objects and reasons. The Hon’ble
Supreme Court held as follows:
“5……The Act is intended not only to
make provision for investigation and settlement of
industrial disputes but also to serve industrial
peace so that it may result in more production and19
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WP.No.13285/2025improve the national economy. In the present
socio-political economic system, it is intended to
achieve cooperation between the capital and
labour which has been deemed to be essential for
maintenance of increased production and
industrial peace. The Act provides to ensure fair
terms to workmen and to prevent disputes between
the employer and the employees so that the large
interests of the public may not suffer. The
provisions of the Act have to be interpreted in a
manner which advances the object of the
legislature contemplated in the Statement of
Objects and Reasons. While interpreting different
provisions of the Act, attempt should be made to
avoid industrial unrest, secure industrial peace
and to provide machinery to secure the end.
Conciliation is the most important and desirable
way to secure that end. In dealing with industrial
disputes, the courts have always emphasized the
doctrine of social justice, which is founded on the
basic ideal of socio-economic equality as
enshrined in the Preamble of our Constitution.
While construing the provisions of the Act, the
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WP.No.13285/2025courts have to give them a construction which
should help in achieving the object of the Act.”(22)From the aforesaid judgments of the Hon’ble Supreme Court, it is
explicit that the Act is primarily aimed at achieving industrial peace and
harmony through machinery provided thereunder. The central object of
the Act is to resolve disputes and to secure peace over conflicts. The Act
aims at promoting peace between the labour and Management, so as to
ensure the smooth functioning of the industry, which accelerates
productive activity of the country, resulting in its prosperity. The
prosperity of the country in its turn, helps to improve conditions of labour
[1999 (6) SCC 82].
(23)Keeping in view, the avowed object of the Act, I now venture to consider
the merits of the rival submissions.
(24)The issues that arise for consideration before me are whether the
individual workman are legally entitled to enter into settlement with the
Management in respect of collective disputes raised by the Union which
are pending adjudication and whether such individual settlements, though
entered into with a majority of workmen is binding on all other non
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WP.No.13285/2025signatory workmen. Whether the contentions of the Union that only a
collective settlement through Union can conclude a collective dispute is
tenable in the light of Section 2[k], 2[p] and 18[1] of the Industrial
Disputes Act. The other issues relate to unfair labour practice and the
scope and limit of certiorari jurisdiction under Article 226 of the
Constitution.
(25)To appreciate the submissions of the learned Senior counsels, the
relevant provisions of the Industrial Disputes Act and the Central and
State Rules, have to be necessarily referred to.
Section 2[k] defines “Industrial Dispute”, and it reads as follows:
”2[k] “industrial dispute” means any dispute or
difference between employers and employers, or between
employers and workmen, or between workmen and workmen,
which is connected with the employment or non-employment or
the terms of employment or with the conditions of labour, of any
person.”Section 2[p] defines ”settlement”, and it reads as follows:
”2[p] “settlement” means a settlement arrived at in
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WP.No.13285/2025the 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.”Section 18 of the Industrial Disputes Act, 1947, relates to the binding
nature of settlements and Awards. It reads as follows:
18. 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
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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 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.
Section 58 of the Industrial Disputes (Central) Rules, 1957, relates to the
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procedure for settlements and reads as follows:
58. Memorandum of settlement. – (1) A settlement
arrived at in the course of conciliation proceedings or
otherwise, shall be in Form ‘H’.
(2) The Settlement shall be signed by –
(a) in the case of an employer, by the employer himself,
or by his authorised agent, or when the employer is an
incorporated company or other body corporate, by the agent,
manager or other principal officer of the corporation;
[(b) in the case of the workmen, by any officer of a trade
union of the workmen or by five representatives of the workmen
duly authorised in this behalf at a meeting of the workmen held
for the purpose;]
[(c) in the case of the workmen, in an industrial dispute
under section 2A of the Act, by the workman concerned,]
Explanation. – In this rule “officer” means any of the
following officers, namely: –
(a) the president;
(b) the vice-president;
(c) the secretary (including the General Secretary);
(d) a Joint Secretary;
(e) any other officer of the trade union authorised in this
behalf by the President and Secretary of the Union.
(3) Where a settlement is arrived at in the course of
conciliation proceeding the Conciliation Officer shall send a
report thereof to the Central Government together with a copy
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of the memorandum of settlement signed by the parties to the
dispute.
(4) Where a settlement is arrived at between an employer
and his workmen otherwise than in the course of conciliation
proceeding before a Board or a Conciliation Officer, the parties
to the settlement shall jointly send a copy thereof to the Central
Government, the Chief Labour Commissioner (Central), New
Delhi, and the Regional Labour Commissioner (Central) and to
the [Assistant Labour Commissioner (Central)] concerned.
Section 25 of the Industrial Dispute Rules, 1958, reads as follows:
25. Memorandum of settlement. – (1) A settlement
arrived at in the course of conciliation proceedings or
otherwise, shall be Form ‘B’.
(2) The settlement shall be signed by –
(a) in the case of an employer by the employer himself or
by his authorised agent, or when the employer is an
incorporated company or other body corporate, by the agent,
manager or other principal officer of the corporation; and
(b) in the case of workmen, either by the [President or
Secretary] of a registered trade union of workmen or by two
office-bearers of the union authorised by the [President or
Secretary] or by five representatives of workmen duly
authorised in this behalf at a meeting of the workmen held for
the purpose and attended by a majority of the workmen
concerned: Provided that where the number of workmen
affected is not more than 2, the settlement may be signed by the
workman or workmen concerned;
[(c) in the case of an industrial dispute raised in
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pursuance of section 2A, by the workmen concerned.]
(3) The parties to a settlement arrived at otherwise than
in the course of conciliation proceedings shall send a copy
thereof to the Conciliation Officer concerned, the Commissioner
of Labour, Madras and the Secretary to the Government of
Madras in-charge of Labour.
(4) The Conciliation Officer shall maintain a record of all
settlements effected under the Act in respect of disputes in the
area within his jurisdiction in a register in Form ‘C’.
(26)It is relevant to point out here that Section 2A of the Act giving a right to
individual workman to raise an industrial dispute regarding his discharge,
dismissal, retrenchment or termination otherwise of his services was
inserted by way of an amendment on 31.12.1965, by Act 35/1965. By the
aforesaid amendment, a dispute raised by the workman with reference to
the matters referred to therein was deemed to be an industrial dispute.
(27)The learned Senior Counsel for the Management contends that, there is
absolutely no bar for an individual workman to settle a 2[k] dispute
relating to wage revision. The learned Senior Counsel heavily relies on
phraseology of Section 18[1] of the Act, to contend that the legislative
intent was clear and that there was absolutely no embargo on an
individual workman to settle disputes relating to wage revision, since at
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the end of the day, it is the cause of the individual workman, that the
Union seeks to espouse. The learned Senior counsel further contends that
a settlement, though individual, entered into by the employer with a
majority of workmen was binding on all other non-signatory workmen
also.
(28)The learned Senior counsel further submits that since the majority of the
workmen signed the 18[1] settlement, voluntarily accepting the wage
revision proposed by the management, and as the Tribunal itself found on
facts, that there was no evidence of any threat or coercion on the workmen
to sign the 18[1] settlement, the Labour Court, erred in rejecting IA No.1
of 2025. The learned Senior Counsel relied on various judgments of the
Hon’ble Supreme Court in support of his submission, that the settlement
entered into with the majority of workmen, was binding on the minority
workmen and that an Award could be passed in terms of such settlement.
(29)The learned Senior Counsel for the Union replying to the aforesaid
arguments submitted that any matter not covered by Section 2A, could be
raised only by the Union or group of workmen. According to the learned
Senior Counsel, a collective dispute pertaining to the conditions of service
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can be raised only under Section 2[k] of the ID Act. Consequently, an
individual workman has no independent role to play in matters involving
collective disputes. It is contended that the legislature has not conferred
upon the individual workman the authority to initiate a collective dispute.
The learned Senior counsel, therefore submits that as a necessary
corollary, an individual workman cannot seek to settle a collective dispute
raised under Section 2[k], since he is incapable of raising such a dispute in
the first place. The learned Senior Counsel submitted that, when an
individual workman had no right under the scheme of the Act, to
individually raise a dispute regarding a common cause like wage revision,
it was futile to contend that the individual workman could settle such
collective dispute. The learned Senior Counsel, also relied on several
judgments of this Court as well as the Hon’ble Supreme Court to drive
home the point, that a collective dispute cannot be settled individually
under Section 18[1] of the Act. The learned Senior counsel extensively
referred to materials on the concept of collective bargaining, tracing its
history to industrial revolution. The learned Senior counsel, submitted
that, if the argument of the Management is countenanced, the concept of
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collective bargaining and Trade Unionism, which is the back bone of the
Industrial Disputes Act, will be rendered nugatory, resulting in chaotic
consequences.
(30)In my view, the submissions of the learned Senior counsel, for the
Union may be conveniently examined under 2 distinct aspects. As one
relating to the concept of collective bargaining and trade unionism, which
are according to him, the back bone of the Industrial Disputes Act, being
rendered purposeless, if individual settlement are entertained in collective
dispute and the other aspect relating to the embargo placed on individual
settlement under the Scheme and the provisions of the Act for settling
collective dispute under Section 2[k] of the Act.
ON THE CONCEPT OF COLLECTIVE BARGAINING AND TRADE
UNIONISM:-
(31)Elaborating his arguments, the learned Senior counsel, for the Union
submitted that, if collective disputes were permitted to be settled through
individual workman, the concept of collective bargaining and trade
unionism will be rendered redundant. The learned Senior counsel, for the
union contended that concept of collective bargaining constitutes
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WP.No.13285/2025animating principle of the industrial disputes act and that the thread of
trade unionism pervades the entire statutory scheme. It was argued that
the acceptance of individual settlement in respect of disputes which are by
nature, collective disputes, would not merely dilute the role of Unions, but
would also imperil the protective object of the legislation itself. Such an
approach would render weaker class of workman vulnerable to the
superior economic strength of the employer, thereby facilitating
exploitation and engendering industrial unrest and chaos. The learned
Senior counsel submitted that the concept of collective bargaining, which
emerged out of the industrial revolution was a social necessity, since
individual workman who were by no means equal to the employers could
receive fair terms of employment only through collective bargaining. In
other words, the learned Senior Counsel contended that the worker who
was individually in a weaker position, than the employer, could only
attain fairness in the terms of the employment only through collective
bargaining.
(32)The learned Senior counsel, for the Union relied on several judgments of
the Hon’ble Supreme Court in support of the aforesaid submissions,
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WP.No.13285/2025namely, Ram Prasad Viswakarma Vs. The Chairman, Industrial
Tribunal reported in AIR 1961 SC 857, P.Vridachalam & Ors. Vs. The
Management of Lotus Mills, reported in 1998 (1) SCC 650, KCP Limited
vs. The Presiding Officer, reported in 1996 (10) SCC 446, Associated
Cement Companies Ltd. Vs. Workmen and Ors, reported in 1960 (1)
LLJ, K.C.P. Employees’ Association, Madras vs Management of
K.C.P. Ltd., Madras and others, reported in 1978 (2) SCC 42,
National Small Industries Corporation Ltd. Vs. Presiding Officer and
another, reported in 2005(3)LLN 719, Central Inland Water Transport
Corporation Limited and another Vs. Brojo nath Ganguly and others,
reported in 1986 (3) SCC 156.
DISCUSSIONS:
(33)The Hon’ble Supreme Court in the case of Ram Prasad Viswakarma Vs.
The Chairman, Industrial Tribunal reported in AIR 1961 SC 857, held
as follows:-
“7. This view which has been re-affirmed by the
Court in several later decisions recognizes the
great importance in modern industrial life of32
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WP.No.13285/2025collective bargaining between the workman and
the employers. It is well known how before the
days of collective bargaining labour was at a great
disadvantage in obtaining reasonable terms for
contracts of service from his employer. As trade
unions developed in the country and collective
bargaining became the rule the employers found it
necessary and convenient to deal with the
representatives of workmen, instead of individual
workmen, not only for the making or modification
of contracts but in the matter of taking disciplinary
action against one or more workmen and as
regards all other disputes.”(34)The facts of the case show that the workmen whose cause was espoused
by the Union, prayed for representation by a person of his choice, as he
had lost faith in the secretary of the Union. The Hon’ble Supreme Court
while considering the question whether the petitioner was entitled to
separate representation, despite the Union espousing his cause, held that
the importance of collective bargaining has to be remembered. In that
context, the Court held as above.
(35)The Hon’ble Supreme Court in the case of P.Vridachalam & Ors. Vs.
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WP.No.13285/2025The Management of Lotus Mills, reported in 1998 (1) SCC 650, held as
follows:
“9. It has to be kept in view that the Act
is based on the principle of collective bargaining
for resolving industrial disputes and for
maintaining industrial peace. Thus principle of
industrial democracy is the bedrock of the Act. The
employer or a class of employers on the one hand
and the accredited representatives of the workmen
on the other are expected to resolve the industrial
dispute amicably as far as possible by entering into
the settlement outside the conciliation proceedings
or if no settlement is reached and the dispute
reaches the conciliator even during conciliation
proceedings. In all these negotiations based on
collective bargaining the individual workman
necessarily recedes to the background. The reins of
bargaining on his behalf are handed over to the
union representing such workman. The unions
espouse the common cause on behalf of all their
members. Consequently, settlement arrived at by
them with management would bind at least their
members and if such settlement is arrived at during34
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WP.No.13285/2025conciliation proceedings, it would bind even non-
members……”(36)The discussion on collective bargaining was made in the context of the
binding nature of 18(3) settlement entered into by some Unions on non-
signatory workmen/Unions.
(37)The Hon’ble Supreme Court in the case of KCP Limited vs. The
Presiding Officer, reported in 1996 (10) SCC 446, held as follows:
“25. It has to be kept in view that under the scheme
of labor legislations like the Act in present case,
collective bargaining and the principle of
industrial democracy permeate the relations
between the management on the one hand and the
Union which resorts to collective bargaining on
behalf of its members-workmen with the
management on the other…….”(38)Even in this case, the issue was the binding nature of the settlement
entered into by the authorised Union on behalf of the individual workman,
whose cause was espoused by it. The individual workmen disputed the
settlement as not binding on them. In that context it was held as above.
(39)The Hon’ble Supreme Court in the case of Associated Cement
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WP.No.13285/2025Companies Ltd. Vs. Workmen and ors. Reported in (1960) 1 LLJ 491,
held as follows:
“8…..Ordinarily, an individual dispute which is
not sponsored by the union or is otherwise not
supported by any group of workmen is not
regarded as an industrial dispute for the purposes
of the Act. A provision like that contained in s. 33A
is of course an exception to this rule. The basis of
industrial adjudication recognised by the province
of the Act clearly appears to be that disputes
between employers and their employees would be
governed by the Act where such disputes have
assumed the character of an industrial dispute. An
element of collective bargaining which is the
essential feature of modern trade union movement
is necessarily involved in industrial
adjudication……”(40)The dispute in the said case was whether a registered trade union
representing minority workmen governed by an Award, could give notice
to the other party intimating its intention to terminate the Award under
Section 19(6) of the ID Act. The issue in the case related to the
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WP.No.13285/2025interpretation of the expression “Any party bound by the Award”. The
Court held that the expression ”any party bound by the Award” did not
cover individual workman, but covered minority workmen.
(41)The issue in the case of K.C.P. Employees’ Association, Madras vs
Management of K.C.P. Ltd., Madras and others, reported in 1978 (2)
SCC 42, related to a bonus dispute. The Hon’ble Supreme Court while
considering the bonus issue held as follows:
“5…….In Industrial Law, interpreted and applied
in the perspective of Part IV of the Constitution,
the benefit of reasonable doubt on law and facts, if
there be such doubt, must go to the weaker section,
labour.”(42)This Court in the case of National Small Industries Corporation Ltd.
Vs. Presiding Officer and another, reported in 2005 (3) LLN 719, held
as follows:
“16. In our opinion the whole approach of
industrial law is that employer and employee do
not stand on an equal bargaining position.
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WP.No.13285/2025Industrial law recognizes that the workers are in a
weaker position than the employers who have
financial resources, management skills,
connections etc. Hence, the whole object of
industrial law is to help the weaker section in the
society (the workmen) and give them protection
from exploitation.”(43)The Hon’ble Supreme Court in the case of Central Inland Water
Transport Corporation Limited and another Vs. Brojo Nath Ganguly
and others, reported in 1986 (3) SCC 156, while dealing with the question
whether a Government company was a state within the Meaning of
Article 12 of the Constitution and whether an unconscionable term in a
contract of employment was void under Section 23 of the Contract Act,
held as follows:
“102. It was also submitted on behalf of the appellants
that Rule 9(i) was supported by mutuality inasmuch as it
conferred an equal right upon both the parties, for under it
just as the employer could terminate the employee’s service
by giving him three months’ notice or by paying him three
months’ basic pay and dearness allowance in lieu thereof, the38
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WP.No.13285/2025employee could leave the service by giving three months’
notice and when he failed to give such notice, the
Corporation could deduct an equivalent amount from
whatever may be payable to him. It is true that there is
mutuality in Rule 9(i)—the same mutuality as in a contract
between the lion and the lamb that both will be free to roam
about in the jungle and each will be at liberty to devour the
other. When one considers the unequal position of the
Corporation and its employees, the argument of mutuality
becomes laughable.”
(44)I have thoroughly gone through the aforesaid judgments. There is nodispute on the legal proposition adverted to in the above judgments with
regard to the importance of collective bargaining. However the facts
therein reveal that the contest in most of the cases was between individual
workman and the Union or between minority and majority Unions. I find
that in none of the judgments it is held that collective bargaining is the
only exclusive mode of settlement. I am of the view that while collective
bargaining is a cherished principle of industrial jurisprudence, the
Industrial Disputes Act, does not recognize it as the sole and exclusive
mode of dispute resolution. The statutory scheme of the act which will be
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WP.No.13285/2025dealt with elaborately hereafter, maintains a fine balance between
collective representation and individual choice.
(45)The Hon’ble Supreme Court on more than one occasion recognised the
object of the Act, which is to encourage settlement of industrial disputes
at the earliest possible stage and through multiple consensus avenues. The
apprehension that individual settlement would dilute trade unionism is in
my considered view misplaced. The statute does not confer a monopoly
of representation on Unions in every collective dispute, nor does it compel
the workman to await an uncertain collective outcome, when a lawful and
beneficial settlement is available to him. I am unable to accept the
contention that recognition of individual settlement under Section 18[1]
would erode the fabric of collective bargaining undermining trade
unionism. The industrial disputes act is a welfare legislation intended to
secure industrial peace through diverse mechanisms of dispute resolution
provided under the statutory framework. The Act consciously
accommodates both collective and individual settlements. In my view,
the freedom of individual workman to enter into voluntary settlement
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WP.No.13285/2025cannot be extinguished, merely because, collective dispute is espoused on
a collective plane. To hold otherwise would amount to subordinating
individual economic agency to institutional control which the act does not
contemplate.
(46)It is to be noted that every individual settlement is a product of free will
and is subject to scrutiny under the statutory machinery. The Act is
intended to resolve disputes and not to prolong collective negotiations,
which may or may not fructify. The workmen cannot be compelled to
await the uncertain collective outcome, when an immediate and beneficial
settlement is available. In my view, the denial of the right to individual
workman to settle the dispute, would elevate trade unionism to monopoly
authority, and will be contrary to the object of the act, which seeks to
foster industrial harmony, rather than industrial supremacy. Therefore, I
find that the apprehension of the Union that individual settlement would
erode trade unionism and collective bargaining is misplaced and hence,
rejected.
BAR UNDER THE PROVISIONS OF THE ACT:-
(47)The second aspect of argument of the learned Senior counsel for the
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WP.No.13285/2025Union, hinges on the provisions of the Act. The learned Senior counsel,
contended that a reading of Section 2[k], 2[p], and 18 of the Industrial
Disputes Act, as it stood prior to insertion of Section 2[A] on 1965, makes
it clear that settlements under Section 18[1] were contemplated only in the
context of collective dispute between the employer and body of workmen,
since no statutory recognition existed at that time for an individual dispute
to constitute industrial dispute. The learned Senior counsel, therefore
contended that the expression workmen occurring under Section 18[1]
though couched in the singular must necessarily be construed in the
plural, while dealing with the disputes under Section 2[k]. Argued, the
learned Senior counsel that Section 2[A] was introduced later in 1965,
creating a distinct category of industrial disputes and only thereafter,
enabled a settlement to be executed by a single workman in respect of the
dispute. According to the learned Senior counsel, the term workman in
Section 18[1] requires plural interpretation, so as to advance the object of
collective dispute resolution and industrial peace. The learned Senior
counsel, for the Union referring to the aforesaid provisions of the Act and
Rules, contends that the answer to 2[k] dispute can only be collective
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WP.No.13285/2025bargaining settlement arrived at, as prescribed by the Rules. The learned
Senior counsel, submits that though Section 18[1] refers to the term
‘workman’ in singular, it should be interpreted to read as ‘workmen’ in
plural. In support of the said contention, the learned Senior counsel relied
on the provisions of Section 13 of the General Clauses Act, which states
that unless there is anything repugnant to the subject or context the word
singular would include plural and vice versa. The learned Senior counsel
relied on the judgments of the Hon’ble Supreme Court in the case of
Collector of Customs, Bombay Versus United Electrical Industries
Limited, reported in 2000 (10) SCC 31 and in the case of Bhanushali
Housing Cooperative Society Limited Versus Mangilal and others,
reported in 2015 (10) SCC 277, in support of his contention. The learned
Senior counsel for the Union contended that the definition of settlement
under Section 2[p] of the ID Act, stipulates that a settlement by way of an
agreement entered into, otherwise than in the course of conciliation
proceedings, required to be signed by the parties, in a manner that may be
prescribed. The learned Senior counsel, further contends that Rule 25 of
the Tamil Nadu Industrial Disputes Rules, and under Rule 58 of the
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WP.No.13285/2025Industrial Disputes (Central) Rules, lay down the procedure for entering
into a settlement. The learned Senior counsel contends that Rule 25[2(c)]
of the Tamil Nadu Industrial Disputes Rules which was introduced with
effect from 09.07.1968, provides for settlement of 2[A] disputes and that
all the settlements under Section 2[k] are covered by Rule 25[2(b)]. The
learned Senior counsel, therefore contends that any settlement of a
collective dispute under Section 2[k], in contravention of the prescribed
procedure under the above Rules cannot be construed as settlement as
defined under Section 2[p] of the Act.
(48)The learned Senior counsel for the Management on the other hand
contends that from the Scheme of Section 18, it can be discerned that a
clear distinction is maintained between 18[1] settlements and 18[3]
settlements. Hence, the term workman in Section 18[1] cannot be read in
plural, without collapsing this statutory distinction and that, unless the
context clearly reveals a contrary intention, Rule 13 of the General
Clauses Act that singular includes plural has no application to Section
18[1] of the Act. The learned Senior Counsel submits that Rules provide
only for procedure and that they cannot override the substantive rights
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WP.No.13285/2025conferred by the Statute.
DISCUSSION:-
(49)In order to appreciate the contentions of the respective learned Senior
counsels, the relevant provisions which have already been extracted above
are discussed.
(50)Section 18[1] refers to individual settlement between the employer and
workman and Section 18[3] refers to collective settlements. Whereas, the
individual settlements are binding only on the parties to the settlement
arrived at otherwise, in the course of conciliation proceedings, 18[3]
settlements have wider binding effect. The Tamil Nadu Industrial
Disputes Rules as well as Central Rules provide for procedure for entering
into a Memorandum of Settlement.
(51)Before introduction of Section 2A on 31/12/1965 under Act 35/65 in the
ID Act, the individual disputes concerning the discharge, dismissal or any
other termination of an individual workman could not be raised by the
workman. It was only after the introduction of Section 2A, that an
individual workman could raise a dispute regarding his non-employment.
Under the Scheme of the Act, collective disputes can be raised only by the
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Union, however, the question that arises for consideration is whether
under the provisions of the ID Act, the individual workman is precluded
from settling such collective dispute. In other words, does the act prohibit
the individual workman from settling a collective dispute raised under
Section 2[k] ?
(52)Reading of Section 2[k] of the Act with Section 2(A) no doubt leads to
the conclusion that individual workman cannot raise a collective dispute
relating to service conditions etc. However, settlement of such collective
dispute raised through Union, in my view, under the scheme of the Act,
and its object, is not precluded. A collective dispute raised by the Union
is, at the end of the day, one espoused for the benefit of individual
workman. Therefore, in the absence of a settlement by the Union of such
dispute, an individual workman cannot be prohibited from exercising his
right of settling the dispute under Section 18[1] of the Act. In my view,
there is no impediment for an individual workman to enter into a
settlement for the resolution of the collective dispute, since there is no
explicit bar under the Act.
(53)The language of Section 18[1] does not impose any embargo on the
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workman to enter into individual settlement. It is the golden rule of
interpretation of statutes that when the language of a statute is plain, clear
and unambiguous, the Court is bound to give effect to it, as it stands even,
if the result appears harsh and inconvenient. It is also fairly well settled
that departure from the language of the statute and the literal meaning
attached to it, is permissible, only to avoid absurdity and that too to a
minimum extent. It is also a cardinal rule that legislative language is
presumed to be deliberate and purposeful. Admittedly, Section 18[1] is
in existence in the Act even before Section 2[A] was introduced.
Therefore when the legislature amended Section 2[A], the legislature in
its wisdom, refrained from amending Section 18[1], leaving it open to the
employer and workmen to settle their disputes, privately and individually.
(54)Further, the Act is a social welfare legislation enacted with an object to
promote industrial peace, regulate relationship between the employer and
employees, provide a mechanism for the settlement of the disputes, which
may impede production or disturb industrial harmony. The legislative
architecture reflects a duality : on the one hand, it recognises collective
character of industrial disputes : on the other, it accepts individual
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economic interest of the workman. Section 2[k] of the Act defines,
‘industrial disputes’ to include any dispute or difference between
employers and employers, or between employers and workmen, or
between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment. In certain
cases, legislature by way of statutory fiction under Section 2[A], has
treated the individual disputes as industrial disputes, to ensure access to
the dispute resolution machinery envisaged by the Act. Section 18[1] of
the Act empowers a workman to arrive at settlement of a dispute between
him and the Management. The provision, on its face, contemplates a
liberal settlement between the employer and the individual workman
irrespective of who raises the dispute. The legislative choice of the term
‘workman’, in my view, is not accidental or inconsequential. It must be
accorded effect in a manner consistent with settled legal principles of
statutory interpretation. Therefore, a purposive construction of Section
18[1] reveals that the legislature intended to preserve autonomy of
individual workman to resolve the collective dispute with the employer
through settlement, even without a special procedure for settlement. If the
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legislature had intended to preclude such settlement in respect of disputes
which have been espoused or have assumed to have collective character, it
would have made express provisions to that effect. The absence of such
restriction is indicative of deliberate legislative choice.
(55)The distinction between the disputes that inherently require collective
resolution and those which, while often raised collectively, retain an
individual economic dimension, is well founded in industrial
jurisprudence. The disputes such as layoff, strike, lockout, closure or
other matters of broad industrial concern, typically involve multiple
workman and contemplate collective bargaining. Those disputes by their
very nature require settlement by collective bargaining. Disputes
concerning wage revision, although effect a class of workmen also bear
upon individual economic rights of each workman. It is one thing to say
that the Union or cohort of workmen may pursue redress collectively, it is
quite another to say that the statute deprives an individual workman of his
capacity to settle his own claim.
(56)The wording in Section 18[1] must therefore be read in consonance with
the object of the Act – to facilitate peaceful resolution of disputes.
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Further, if an individual workman, acting voluntarily without coercion
with full knowledge of his rights, chooses to settle a dispute relating to his
wages, there is no rational basis for a statutory embargo to such
settlement, merely because the dispute has been espoused collectively
under Section 2[k].
(57)In my view, to hold otherwise would produce a enormous result. It
would compel a workman to forgo the resolution of his own claim,
notwithstanding his willingness to settle, by placing him at the behest of a
protracted collective negotiations, which the Act seeks to ameliorate. The
facts of the present case fortify the view of this Court that the legislature
consciously and with definite purpose, has not thought it fit to impose any
statutory embargo on the settlement of collective disputes through
individual workman. The writ petition filed by the Union in
WP.No.23686/2025 is itself illustrative of this position. The dispute
relating to the wage revision for the year 2019 culminated in a Failure
Report, however, even thereafter, the dispute has not been referred for
adjudication till date. It is only after or an inordinate lapse of nearly six
years that the Union has approached this Court seeking the writ of
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mandamus. Such prolonged inaction on the part of the Union cannot be
countenanced to the detriment of the workmen concerned. If a Trade
Union seeks to retain its relevance and representative character, it must
equally recognise that wage revision disputes cannot be allowed to linger
endlessly, leaving the workmen in a state of perpetual uncertainty. The
law does no compel a workman to await indeterminate adjudicatory
process, when an immediate and tangible benefit is available.
Pragmatism, as much as principle, must guide industrial relations for a
concrete benefit in hand, cannot be likely sacrificed for a speculative and
uncertain outcome in future.
(58) It is well settled that the settlement under Section 18[1] operates as a
bar to any further proceedings in respect of that dispute, insofar as it
affects the parties to the settlement. The salutary object of this provisions
is to confirm finality and to incentivise the settlement as a preferred mode
of dispute resolution (Amalgamated Coffee Estates Ltd. and others vs.
Their Workmen and others, reported in 1965 (2)LLJ 110, Herbertsons
Limited vs. The Workmen of Herbertsons Limited and Others, reported
in 1976 (4) SCC 736, New Standard Engineering Company Ltd vs.
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N.L.Abhyankar and Ors., reported in 1978 (2) SCC 133 and TATA
Chemicals Ltd. vs Workmen Represented by Chemicals Kamdar
Sangh, reported in 1978 (3) SCC42) Interpreting Section 18[1] to
preclude individual settlement in respect of wage revision disputes, in my
view, would undermine the object of the Act and diminish the very
efficacy of the statutory machinery for settlement.
(59)In view of the above discussion, I am of the view that the judgments
relied on by the learned Senior counsel for the Union in Collector of
Customs, Bombay vs United Electrical Industries Limited, reported in
2000 (10) SCC 31 and in Bhanushali Housing Cooperative Society
Limited vs. Mangilal and others, reported in 2015 (10) SCC 277, for the
legal proposition that under Section 13 of the General Clauses Act,
singular shall include plural and vice versa, are not applicable,since the
legislative intent is clear under Section 18[1], to empower individual
workman to settle disputes including wage revision with the employer.
Such settlements are not ousted merely because, the dispute has been
espoused collectively, what is required in each case is an enquiry into
voluntariness and lawfulness of the settlement – if the settlement is free
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from vitiating factors and accords with the aforesaid statutory scheme, it
must be upheld. From the facts of the case, it is noted, the Tribunal
found that there were no vitiating circumstances in 18[1] settlements
signed with the individual workman.
(60)Heavy reliance was placed on Rule 58[2(b)] of the Industrial Disputes
(Central) Rule and 25[2(b)] of the Tamil Nadu Industrial Disputes Rules,
to contend that the 2[k] settlement can be signed only by any officer of the
Trade Union of workmen or five representatives duly authorized in this
behalf at the meeting held for the purpose. In the case of State Rules, the
settlement can be signed only by the President or Secretary of a registered
Trade Union of workmen or by two office bearers of the union authorised
by the President or Secretary or by five representatives of workmen duly
authorized in this behalf at a meeting of the workmen held for the purpose
and attended by a majority of the workmen concerned; provided that
where the number of workmen affected is not more than two, the
settlement may be signed by the workman or workmen concerned. Based
on the said provision, the learned Senior counsel for the Union
vehemently contended that any settlement in violation of the aforesaid
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procedure is not a settlement at all.
(61)The aforesaid Rules are admittedly, procedural in nature providing for
the manner of entering into and recording of settlements. It is trite in law
that rules providing for procedure cannot override substantive rights
conferred by the statute. Though the law is well settled, a reference to the
judgment of the Hon’ble Supreme Court in the case of Ispat Industries
Ltd. Versus Commissioner of Customs, Mumbai, reported in 2006 (12)
SCC 583, can be made here. The Rules have to be read in conjunction
with the main provision. Therefore, while interpreting the rule, it has to
be seen if it sub-serves the main object of the provisions in the parent
statute. The Hon’ble Supreme Court in the said judgment held as follows:
“29. The Customs Act falls in the second
layer in this hierarchy whereas the Rules made
under the Act fall in the third layer. Hence, if there
is any conflict between the provisions of the Act
and the provisions of the Rules, the former will
prevail. However, every effort should be made to
give an interpretation to the Rules to uphold its
validity. This can only be possible if the Rules can
be interpreted in a manner so as to be in54
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WP.No.13285/2025conformity with the provisions in the Act, which
can be done by giving it an interpretation which
may be different from the interpretation which the
rule could have if it was construed independently
of the provisions in the Act. In other words, to
uphold the validity of the rule sometimes a strained
meaning can be given to it, which may depart from
the ordinary meaning, if that is necessary to make
the rule in conformity with the provisions of the
Act. This is because it is a well-settled principle of
interpretation that if there are two interpretations
possible of a rule, one of which would uphold its
validity while the other which would invalidate it,
the former should be preferred.”
(62)The contention with regard to the Rules, in my view cannot becountenanced, for the simple reason that the Rules are merely facilitative
and regulatory in character and cannot have the effect of abrogating or
diluting the statutory right expressly recognised under Section 18[1],
enabling the individual workman to enter into voluntary settlement with
the employer.
(63)To construe the Rules as disabling the individual workman would be to
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WP.No.13285/2025convert the procedural safeguard into a substantive fetter. It is pertinent
to note that it is well settled legal position that Rules cannot override the
Act. When Section 18[1] specifically creates a right in individual
workman to enter into individual settlement with the Management
otherwise, than through conciliation, the procedure provided under the
Rules 58 and Rule 25 of the central and State Rule respectively cannot
extinguish the statutory right conferred on the workmen to settle the
dispute.
(64)Further, Section 2[p] which defines settlement, contemplates two
categories of settlements. One, in the course of conciliation proceedings
and the other entered into otherwise than in the course of conciliation. The
provision includes within itself, a written agreement signed by the parties
in such manner as may be prescribed. The procedural requirements under
Rule 58 of the Central Rules and the Rule 25 of the State Rules, in my
considered view, governs settlement entered into with the Union in
collective disputes as well as settlements relating to disputes under
Section 2[A]. The expression ”as may be prescribed” occurring in Section
2[p] is directory in nature. Settlement under Section 18[1], being a
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WP.No.13285/2025product of private negotiation between the Management and the
individual workmen, is essentially bilateral, contractual and binding only
on the parties to the agreement. Therefore, no specific procedure is
statutorily mandated for such a 18[1] settlement. When the Rules are read
harmoniously with the substantive provision, it becomes evident that the
rigour of procedural requirements is intended to operate primarily in
respect of settlements entered into through the Union in the context of
collective disputes and in respect of settlements concerning disputes
falling under Section 2[A] where the consequences travel beyond the
contracting parties. In such situations, the procedure prescribed under the
Rules requires strict adherence. In any event, the Rules are intended to
facilitate expeditious attainment of the substantive object of industrial
justice rather than to defeat the settlement entered into voluntarily. [1997
SCC Online Mad 1463].
BINDING EFFECT OF THE SETTLEMENT:-
(65)The next question would be the binding effect of the 18[1] settlement
arrived at between Management and the majority of the individual
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WP.No.13285/2025workman on the non-signatory workmen, whose dispute is pending
adjudication.
(66)The learned Senior counsel, for the Management submitted that the 18[1]
settlement arrived at with majority of the workmen was binding on all
other non-signatory workmen whose reference was pending adjudication.
The learned Senior counsel, relied on the following judgments of the
Hon’ble Supreme Court in the cases of Amalgamated Coffee Estates Ltd.
and others vs. Their Workmen and others, reported in 1965 (2)LLJ 110,
Herbertsons Limited vs. The Workmen of Herbertsons Limited and
Others, reported in 1976 (4) SCC 736, Tata Engineering & Locomotive
Company Ltd vs. Their Workmen, reported in 1981 (4) SCC 627, New
Standard Engineering Company Ltd vs. N.L.Abhyankar and Ors.,
reported in 1978 (2) SCC 133 and TATA Chemicals Ltd. vs Workmen
Represented by Chemicals Kamdar Sangh, reported in 1978 (3) SCC42,
in support of his submission.
(67)In the case of Amalgamated Coffee Estates Ltd. and others vs. Their
Workmen and others, reported in 1965 (2)LLJ 110, the Hon’ble Supreme
Court in para 5 held as follows:
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WP.No.13285/2025“5. The settlement appears to us also to be a
fair one. We are therefore of opinion that the two
appeals should be decided in accordance with the
settlement. Even those estates which were not
parties to the settlement are prepared to abide by
it. We think that in the interest of uniformity and
industrial peace the settlement should bind all
estates which were represented before the Special
Tribunal.”(68)The Hon’ble Supreme Court in the said judgment recognized that fair
settlement could be accepted as binding, if it was in the interest of
uniformity and industrial peace. The judgment in Herbertsons Limited
vs. The Workmen of Herbertsons Limited and Others, the Hon’ble
Supreme Court in para 27 held as follows:
“27……These factors, apart from what has
been stated above, and the need for industrial
peace and harmony when a union backed by a
large majority of workmen has accepted a
settlement in the course of collective bargaining
have impelled us not to interfere with this
settlement.”59
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WP.No.13285/2025(69)In the case of New Standard Engineering Company Ltd vs.
N.L.Abhyankar and Ors., the Hon’ble Supreme Court in para 7, held as
follows:
“7. Settlement of labour disputes by direct
negotiation or settlement through collective
bargaining is always to be preferred for, as is
obvious, it is the best guarantee of industrial peace
which is the aim of all legislation for the settlement
of labour disputes. In order to bring about such a
settlement more easily, and to make it more
workable and effective, it is no longer necessary,
under the law, that the settlement should be
confined to that arrived at in the course of a
conciliation proceeding, but now includes, by
virtue of the definition in Section 2[p] of the Act, a
written agreement between the employer and the
workmen arrived at otherwise than in the course of a
conciliation proceeding where such agreement has been
signed by the parties in the prescribed manner and a copy
thereof has been sent to the authorised officer….”(70)The learned Senior Counsel for the Management referring to the
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WP.No.13285/2025aforesaid para in the said judgments, submitted that the Hon’ble Supreme
Court acknowledged that the settlement of disputes by direct negotiations
is to be preferred, since it is the best guarantee of industrial peace, which
is the main object of the Act and therefore, industrial settlements entered
into with a majority of workmen were binding on non-signatory
workmen, whose dispute was pending adjudication.
(71)The judgments relied on by the learned Senior counsel for the
Management, in my view do not support the contention of the
Management.
(72)From the facts of the aforesaid judgments, it is evident that the disputes
arose out of settlements entered into with the Unions, either majority or
minority and therefore the Hon’ble Supreme Court on being satisfied that
the settlements were fair and reasonable, declared the same as binding.
(73)In none of the judgments relied on by either side, the question of binding
effect of an 18[1] settlement entered into by majority of individual
workman, on non-signatory workman or Union arose.
(74)The scheme of the Act leaves no ambiguity on the binding effect of
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WP.No.13285/2025settlements contemplated under Section 18. Section 2[p] envisages two
distinct categories of settlements – the first being the settlement arrived at
by negotiation between the employer and the workman and the second,
being a settlement concluded in the course of conciliation proceedings. It
is in the recognition of this dual framework, that the legislature, under
Section 18, calibrated the extent of the binding force. A settlement falling
under Section 18[1] being the product of bilateral arrangement arrived at
outside of conciliation, is statutorily binding only upon parties who are
signatories thereto. Conversely, a settlement under Section 18[3] having
been arrived at in the course of conciliation, carries a vital effect and
extends to the entire body of the workmen specified therein including the
non-signatory workman. If the contention of the learned Senior counsel
for the Management that Section 18[1] settlement entered into with
majority individual workmen is binding, is accepted, it will, in my view,
amount to obliterating the clear legislative distinction between the two
categories of settlements and would in effect, re-write the statutory
scheme. Such a construction would be contrary to the express language
of the provision and would render nugatory the manifest legislative intent
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WP.No.13285/2025underlying Section 2[p] and Section 18. In my view, the distinction
drawn by the legislature between the two classes of settlements, is both
deliberate and substantive. Though the settlements are recognized as an
integral part of dispute resolution mechanism, their binding force must be
confined to the statutory text. In this context, the judgment of the Hon’ble
Supreme Court in the case of M/s.TATA Chemicals Ltd. vs The
Workmen Represented by Chemicals Kamdar Sangh, reported in 1978
(3) SCC 42, is worthy of reference.
(75)The Hon’ble Supreme Court in the said judgment examined and analysed
Section 18 of the Act and held as follows:
“12. The consequences of the aforesaid
two categories of settlement which are quite
distinct are set out in Section 18 of the Act which
reads as under:
“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.
(2) Subject to the provisions of sub-section (3), an
arbitration Award which has become enforceable63
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WP.No.13285/2025shall be binding on the parties to the agreement
who referred the dispute to arbitration.
(3) A settlement arrived at in the course of
conciliation proceeding under this Act or an
arbitration Award in a case where a notification
has been issued under sub-section (3-A) of Section
10-A 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
proceeding 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 are 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.”
13. A bare perusal of the above quoted
section would show that whereas a settlement64
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WP.No.13285/2025arrived at by agreement between the employer and
the workmen otherwise than in the course of
conciliation proceeding is binding only on the
parties to the agreement, a settlement arrived at in
the course of conciliation proceeding under the Act
is binding not only on the parties to the industrial
dispute but also on other persons specified in
clauses (b), (c) and (d) of sub-section (3) of Section
18 of the Act. We are fortified in this conclusion by
a decision of this Court in Ramnagar Cane &
Sugar Co. Ltd. v. Jatin Chakravorty where it was
held as follows (SCR pp. 772-73):
“When an industrial dispute is thus
raised and is decided either by settlement or by an
Award the scope and effect of its operation is
prescribed by Section 18 of the Act. Section 18[1]
provides that a settlement arrived at by agreement
between the employer and the workmen otherwise
than in the course of conciliation proceeding shall
be binding on the parties to the agreement;
whereas Section 18(3) provides that a settlement
arrived at in the course of conciliation proceedings
which has become enforceable shall be binding on65
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WP.No.13285/2025all the parties specified in clauses (a), (b), (c) and
(d) of sub-section (3). Section 18(3)(d) makes it
clear that, where a party referred to in clause (a)
or clause (b) is composed of workmen, all persons
who are 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, would be bound by the
settlement…. In order to bind the workmen it is not
necessary to show that the said workmen belong to
the Union which was a party to the dispute before
the conciliator. The whole policy of Section 18
appears to be to give an extended operation to the
settlement arrived at in the course of conciliation
proceedings, and that is the object with which the
four categories of persons bound by such
settlement are specified in Section 18, sub-section
(3).”(76)The Hon’ble Supreme Court, in the aforesaid judgment, reiterated that
the Court cannot enlarge the scope of settlement beyond what the statute
contemplates, nor can it impose collective binding effect when the
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WP.No.13285/2025legislature expressly confined it to the executing parties. The judgment
underscores the distinction between the two categories of settlements, is
not merely procedural but structural and jurisdictional. To extend Section
18[1] Settlement, to non-signatory workmen would amount to effacing the
statutory demarcation and negate the carefully crafted legislative scheme.
The contention of the Management, if accepted, would amount to reading
into Section 18[1], a consequence expressly reserved by the legislature for
settlements in conciliation under Section 18[3]. In my view, such an
interpretation, not only defeats the plain language of the provision, but
also renders otiose the very distinction that the Act has consciously
preserved.
(77)To sum up, [1]Section 2[p] contemplates two distinct categories of
settlements:-Settlements by private negotiations and settlements in the
course of conciliation. [2]Section 18 gives effect to the legislative
classification by prescribing two different binding regimes ; [3] settlement
under Section 18[1] is binding only upon the parties to the settlement,
namely, the employer and the signatory workman ; and [4]settlement
under Section 18[3] being one concluded in conciliation alone carries an
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extended binding effect upon the non-signatory workmen and others
specified therein.
(78)Extending the binding effect of Section 18[1] settlement to non-
signatory workmen, would be contrary to the express language of the
statute and inconsistent with the law declared by the Hon’ble Supreme
Court. I am therefore of the view, that the contention that settlement
under Section 18[1] binds non-signatory workmen, cannot be sustained as
it is in direct violation of the statutory framework embodied in Section
2[p] and Section 18 of the ID Act.
(79)Under the circumstances, the order of the Industrial Tribunal upholding
the individual 18[1] settlements, but at the same time, rejecting the
Managements, prayer for an Award in terms of the individual settlements
arrived at by the majority workman, is in consonance with the legislative
scheme and thus suffers from no infirmity.
(80)The plea of the Union regarding the conduct of the Management in not
permitting the outside office bearers in engaging and negotiating the
bargaining process with the Management on the ground that it amounts to
unfair Labour Practice, is not discussed in view of the aforesaid finding of
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this Court that the individual workman are not precluded under the Act
from entering into individual settlements of the collective disputes, raised
under Section 2[k] regarding wage revision. Further, since this Court has
found that the settlement regarding wage revision [2[k] dispute] can be
settled under Section 18[1] of the Act, the contention that the
Management indulged in unfair labour practice by not permitting the
outside office bearers to engage in the negotiation process, need not be
considered and discussed here. In any event, the Union is at liberty to
raise the issue before the Industrial Tribunal in the pending proceeding.
The other factual contentions raised by the learned Senior counsel for the
Management do not also deserve consideration since this Court has found
that the settlement is not binding on the Union and other non-signatory
workmen but is binding only on the Management and the individual
workman.
(81)On the submission of the learned Senior counsel for the Union,
regarding the scope and ambit of interference under Article 226 of the
Constitution of India, in certiorari jurisdiction, I find that it is not
necessary to consider the issue, since the impugned order of the Industrial
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Tribunal is not interfered with.
(82)For all the above reasons, I find that the impugned order of the Industrial
Tribunal is fair, just and reasonable and in consonance with the law and
therefore, the same does not call for any interference. Hence, the writ
petition is dismissed. No costs. Consequently, connected miscellaneous
petition is closed.
09.01.2026
Index:Yes
Neutral Citation:Yes
Speaking Order
Internet:Yes
dsn/AP
To
1.The General Secretary
Caterpillar India Private Thozhilalar Sangam
Melnallathur Gramam
Thiruvallur District 602 002.
2.The Authorised Signatory,
Management,
Caterpillar India Private Limited
Melnallathur Gramam
Thiruvallur District 602 002
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WP.No.13285/2025
N.MALA, J.,
dsn/AP
Order in
WP.No.13285/2025
09 .01.2026
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