Class Notes- Industrial Relations and Labour Laws

Lecture- 10
Industrial Employment (Standing Orders) Act
The concept of ‘Standing Orders’ is one of the recent growth in relation to Indian labour-
management. Prior to 1946, there existed chaotic conditions of employment, wherein the workmen
were engaged on an individual basis with uncertain and vague terms of employment. The Act was
enacted as a simple measure to remedy this situation – by bringing about uniformity in the terms of
employment in industrial establishments so as to minimize industrial conflicts.

Objective of the Act

The objective of the Industrial Employment (Standing Orders) Act, are as follows:

• To provide regular standing orders for workers, factories, and working relationship.
• To ensure that the employee recognises the terms and conditions of the employees and thus
to minimise exploitation of the workers.
• To promote industrial peace and harmony by supporting fair industrial practices.

Applicability of the Act

The Act applies to the industrial establishments (within India) with an engagement of more than a
hundred workmen at present or as noted on any day in the preceding year unless provided by the
appropriate Government for application to any such industrial establishment – with less than a
hundred employees.

Under section 2(i) Industrial Establishment are the following entities are listed below:

• An industrial establishment as specified in section 2(i) of Payment of Wages Act.

• Factory as explained in Factories Act (where ten or more workers are in manufacturing
process with the aid of power or where twenty or more workers are in manufacturing
process without the aid of power)
• Railway Industry
• Establishment of contractor who employs workers for fulfilling the contract with the owner
of an industrial establishment under section 2(e).
• Workman as specified under section 2(s) of Industrial Disputes Act. Under Section 2(i)
workman covers skilled, unskilled, manual or clerical work.

Exclusion-

Workman does not include employees engaged in a managerial or administrative capacity or

supervisory capacity and also it does not include workers subject to Army Act, Navy Act or Air Force
Act or police or prison services.
Certification of Standing Orders
It is mandatory for every employer covered under the Industrial Employment (Standing
Orders) Act to get standing orders certified by submitting five draft copies of the standing orders to
the certifying officer such as labour commissioner or a regional labour commissioner and also
includes any other officer appointed to perform the functions of certifying officer.

Details Enclosed in Standing Orders

The particular information which is generally provided in the standing orders include:

• Workmen classification into categories such as permanent, temporary, on probation, etc.

• Method of informing the workmen about working hours, holidays, etc.
• Attendance, and conditions of granting leaves, etc.;
• Means of redressal for workmen, or any other matter.
• Temporary stoppages of work.
• Provisions concerning the termination of employment and the notice period.
• Actions/inactions which are treated as misconduct and the consequences for the fault.
• Grievance redressal mechanism in case of unjust or unfair treatment by the employer.
• Attendance marking system for workers.
• Employment termination and the notice thereof to be provided by both employer and the
workers.
• Procedure for availing leave and encashment, accumulation of leaves.
• Workmen records and information, etc.

Modification of Standing Order

Standing orders finally certified by the certifying officer is not liable to change, except by an
agreement between the employer and workers to the contrary, until the expiry of six months from
the date on which the standing orders or the last modification came into operation.

An employer or workers or a trade union or other representative body of the workman may
apply to the certifying officer to have the standing orders modified, and such application shall be
accompanied by five copies of the modifications to be performed.

Temporary Application of Model Standing Orders

Model standing orders apply to an industrial establishment from the time the Industrial Employment
(Standing Orders) Act (IESO Act) becomes applicable to such establishment till the time the standing
orders of the establishment are finally certified.

Certification Process
The procedure for certification of Standing Order, as prescribed under Section 5 of the Act, is
threefold:

• The Certifying Officer to send a copy of the Draft Standing Order to the workmen or trade
union, along with a notice calling for objections, that shall be submitted to him within 15
days of receiving such notice.
 • Upon receipt of such objections, the employer and workmen to be given an opportunity of
being heard, after which the Certifying Officer shall decide and pass an order for
modification of the Standing Order.
• Finally, the Certifying Officer shall certify such Standing Order, and thereby, within seven
days, send a copy of it annexed with his order for modification passed under Section 5(2).

Appeals
Any related party aggrieved by the order of the Certifying Officer may appeal to the ‘appellate
authority’ within 30 days, provided that its decision, of confirming such Standing Order or amending
it, shall be final. The appellate authority shall thereafter send copies of the Standing Order, if
amended, to the related parties within seven days.

Modification of Standing Order

A CSO cannot be modified, except on agreement between the related parties, until six months from
the last modification or operation of such standing order under Section 7. Further, subject to Section
10(1) and other provisions of this Act, the parties may apply to the Certifying Officer for
modifications in the standing order by annexing five copies of the proposal or a certified copy of the
agreement for modifications.

Payment of Subsistence Allowance

Where any workman is known to be suspended at the investigation or inquiry into
complaints or charges of misconduct against him, it is mandatory for the employer to pay to such
workman subsistence allowance at the following rates:

• For the first 90 (ninety) days: at the rate of 50% (percentage fifty) of the wages which the
workman was entitled to immediately preceding the date of such suspension.
• For 91 (ninety-one) to 180 (one hundred eighty) days: at the rate of 75% (percentage
seventy-five) of such wages of suspension if the delay in the completion of disciplinary
proceedings against such workman is not directly attributable to the conduct of such
workman. Virtually the order of suspension does not put an end to a workman’s service
though he is not permitted to work and is paid only substance allowance which is less than is
salary. This reduced rate of wages constitutes subsistence allowance.

Penalty

If an employer defaults to submit draft standing orders or modifies his standing orders, then the
concerned officer may impose a penalty which will be above Rs 5,000 (five thousand), and in the
case of a continuation of offence may impose a fine which will be above Rs 200 (two hundred) for
every day till the offence continues.

If the establishment does any act in violation of the standing orders after getting certified under this
Act, then the employer will be punishable with the penalty of which will be more than Rs 100 (One
hundred), and in the case of a continuation of offence may impose a fine of Rs 25 (twenty five) for
every day till the offence continues.
Interpretation of Standing Orders
Any question relating to the application/interpretation of this Act may be referred to the Labour
Courts constituted for this purpose, whose decision shall be final and binding on all parties.

Delegation of Powers
The appropriate Government may delegate its powers under the Act to an
Officer/Subordinate Authority to the Central or the State Government, as the case may be, and
subject to such directions as may be provided under the notification.

Power to make rules

The Act empowers the appropriate Government to make rules for the purpose of this Act, in
consultation with representatives of related parties, relating to:

• Additional matters to be included in the Schedule & the procedure for modification;
• Set out Modal Standing Orders;
• Procedure to be followed by Certifying Officers & appellate authorities;
• The fee to be charged for the copies of registered standing orders, and any other matter so
prescribed.
• Provided that the rules made by the Central Government be passed/annulled through each
House of Parliament without prejudice to the validity of anything done under it.