Let me start by saying that the issue of validity of the existing statutory settlement vis-à-vis the Labour Codes is a grey area. A lot will depend on if and how the Courts deal with this issue. Nevertheless, it is a subject that merits bestowing some thought to.
Before we get into the implications of the Labour Codes on existing statutory settlements, a little understanding of the relevant statutory provisions will be apposite.
Let me point out that the Industrial Relations Code (“IRC”) has similar provisions compared to Industrial Disputes Act on how settlement is to be made, on whom the settlement is binding, when does a settlement take effect and for how long it remains in force, once a valid settlement agreement comes into existence.
Under the Scheme of IDA as well as the IR Code, employers and their workers are free to enter into a settlement. Such settlement can be entered into without or without involvement of any formal mechanism under the IDA/IRC.
Based on the definition of the term “Settlement” given in section 2(p)...