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Section 53: Period of operation of settlements and awards

The Industrial Relations Code, 2020 (Act No. 35 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter VII: Mechanism for Resolution of Industrial Disputes
Competent Labour Forum
Act No. 35 of 2020
Section 52 All 104 Sections of Industrial Relations Code, 2020 Section 54

Legal Commentary & Landmark Judgments: Section 53

Section 53 of the Industrial Relations Code, 2020 prescribes the operational lifespan of settlements and awards (stipulated period or default one year), mandating that they continue in force indefinitely post-expiry until formally terminated by two months' written notice, while surviving as implied contractual conditions.

  • Statutory Operational Lifespan: A settlement or award operates for the period agreed upon, or for one year in the absence of an agreed term, during which no party can raise a dispute on covered matters.
  • Mandatory Two-Month Written Termination Notice: Continues to be binding even after the expiry of its operation period until the lapse of two months from the date on which written notice of intention to terminate is served by one party on the other.
  • Post-Termination Survival of Employment Terms: Termination of an award or settlement does not create a regulatory vacuum; its terms survive as implied contractual conditions of employment until replaced by a fresh award or settlement.
Key Landmark Precedents:
  • Life Insurance Corporation of India v. D.J. Bahadur (1981) 1 SCC 315: Landmark 3-Judge Bench decision ruling that upon termination of an industrial award or settlement, its terms do not perish but continue to govern employer-employee relations as implied contractual conditions until superseded by a new collective agreement.
  • South Indian Bank Ltd. v. A.R. Chacko AIR 1964 SC 1522: Supreme Court affirmed that the termination of an award merely lifts the statutory ban on raising fresh industrial disputes; it does not permit unilateral reduction of benefits conferred under the award.
Courtroom Practice & Strategic Litigation Guidance:

Management seeking to renegotiate wages or terms cannot unilaterally stop paying award benefits upon the expiry of the one-year period. Management must serve a formal two-month notice of termination under Section 53, initiate fresh collective bargaining, and preserve existing benefits until a new settlement is executed.

Section 52 All 104 Sections of Industrial Relations Code, 2020 Section 54