THE ICFAI UNIVERSITY

STUDENT NAME- RIYA SINGH

ENROLLMENT ID- 19FLICDDN01106

COURSE- BBA.LLB(HONS)

SECTION- “B”

BATCH AND YEAR- 2019-2024 & 02 YEAR

SEMESTER- FIFTH

TOPIC – THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT 1946

SUBMITTED BY SUBMITTED TO

RIYA SINGH MR. SURYA SAXENA

INDEX

1. Introduction
2. Application of the Act
3. Exclusion of certain industrial establishments
4. Power to exempt: Section 14
5. Special features of the Act
6. Standing orders
7. Conditions for Certification of Standing Orders: Section 4
8. Deviation from Model Standing Orders
9. Certification Process: Section 5
10.Appeals: Section 6
11.Modification of Standing Order: Section 10
12.Payment of Subsistence Allowance: Section 10-A
13.Temporary Application of Model Standing Orders: Section 12-A
14.Penalties and procedure: Section 13
15.Interpretation of Standing Orders: Section 13-A
16.Delegation of Powers: Section 14-A
17.Power to make rules: Section 15
18.Conclusion
INTRODUCTION
One of the most recent developments in Indian labor-management is the concept of 'Standing
Orders.' Prior to 1946, employment arrangements were chaotic, with workers being hired on
an individual basis with uncertain and ambiguous terms of employment. The Act was enacted
as a straightforward solution to this problem, giving uniformity to the terms of employment
in industrial facilities in order to reduce industrial conflicts.

The Act's Preamble mandates that employers "establish with sufficient precision the terms of
employment" and make them clear to their employees.
The importance of making a law defining precisely the conditions of employment was
emphasized during discussions in the Tripartite Labour Conferences. To give effect to new
ideology the Industrial Employment (Standing Orders) Act, 1946 was passed by the central
government. It is obligatory upon all the employers covered by this Act to define conditions
of employment under them. The preamble of the act makes it amply clear that the Standing
Order shall deal with the "conditions of employment of workers in industrial establishment".
The object of the act is to regulate the conditions of recruitment, discharge, disciplinary
action, holidays etc. of workers employed in the industrial undertakings. The act has also
introduced uniformity of terms and conditions of employment in respect of workmen
belonging to the same category and discharging the same or similar work in an industrial
establishment.

SECTION 1 – APPLICATION OF ACT

Section 1 of the Act states that the Act applies to industrial establishments (within India)
employing more than a hundred workers at any time during the preceding year, unless the
appropriate government provides for the application of the Act to any such industrial
establishment employing less than a hundred workers.

Exclusion of certain industrial establishments

Certain industrial establishments have been excluded from its application via various
statutory provisions enlisted in this Act:

Section 1(4) excludes those establishments to which Chapter VII of the BIRA or MPIESOA
applies unless controlled by the Central Government.

Section 13-B excludes those establishments whose workmen are subject to the Fundamental
& Supplementary Rules; various Civil Services Rules; or any other rules provided by the
‘appropriate Government’.

The provisions of Sections 10 and 12-A (1) do not apply to the establishments under the
control of the States of Gujarat/Maharashtra.

SECTION 14: POWER TO EXEMPT

This section authorises the appropriate government to exempt conditionally or
unconditionally any industrial establishment or class of establishments from all or any of the
provisions of this act.

SPECIAL FEATURES OF THE ACT

 The employer of every industrial establishment to which the act applies is required to
frame draft SOs and to submit them to the certifying officer, who is generally the
Labour Commissioner, for certification;
 The definition of workmen under this act includes a ‘Supervisory Technical
Personnel’ under certain conditions;
 The certifying officer is empowered to modify or add to the draft SOs as to render
them certifiable under the act;
 A group of employers of similar industrial establishments may submit joint SOs for
certification;
 The act normally applies to every industrial establishment wherein 100 or more
workmen are employed;
 The certifying officers and appellate authorities shall have all the powers of a civil
court in respect of certain matters provided in S.19 of the act.
 The employer can be penalised for failure to submit draft SO for certification or for
contravention of any provision of the SO finally certified;
 The appropriate government may by a Gazette notification exempt any establishment
or class of IEs from any of the provisions of the Act
LEGAL NATURE OF STANDING ORDERS
 Certified SOs has a statutory force. The SOs implies a contract between the employer
and the workman. Therefore, the employer and workman, cannot enter into a contract
overriding the statutory contract as embodied in the certified SOs.
 While the SOs is in force it is not permissible for the employer to seek their statutory
modification so that there can be one set of SOs in respect of certain employees and
another for the rest.
 Therefore no workmen can be appointed by the employer on conditions different from
those defined in the SOs unless they are modified.
  The SOs duly certified become part of the statutory terms and govern all relations b/w
the employer and the employees. They are binding on both the employer and the
employee.
 To claim any exception to the said rule, it has to be shown that the SOs is inconsistent
with some operative provisions of the Industrial Disputes Act, 1947.
 CSOs cannot be deemed as a statutory concept, but can also not be confined to the
individualistic notions of a contract, as they transcend its limits. Hence, standing
orders effectuated in compliance with the statutory provisions may be considered as a
special kind of contract or a ‘statutory contract’.
 Herein, to answer the question of whether a contract can override in the CSO, it can
be concurred from the Western India case, that “the employer & workmen cannot
enter into a contract overriding the statutory contract as embodied in the CSO, except
when such a contract is entered into in compliance with Section 10(1), so as to modify
such CSO, but not otherwise.”

STANDING ORDERS

Section 3 – Submission of draft Standing Orders

(1) Within six months from the date on which this act becomes applicable to an industrial
establishment, the employer of that establishment shall submit to the Certifying Officer 5
copies of the draft SOs proposed by him for adoption in his industrial establishment.

(2) The draft SO must make provision for every matter, set out in the schedule, which may be
applicable to the industrial establishment. In those cases where Model Standing Orders have
been prescribed the Draft Standing Orders shall be, so far as practicable, in conformity with
such model.

(3) The Draft Standing Orders submitted under this section shall be accompanied by a
statement giving prescribed particulars of the workmen employed in the establishment. The
name of the TU if any should also be sent along with the Draft Standing Orders.

(4) A group of employers in similar industrial establishments may submit a joint draft under
this section provided they satisfy the conditions, if any prescribed in this respect.

S.K. Sheshadri v H.A.L and others, (1983)

In this case, the Hon’ble Karnataka High Court held that, as long as the Standing Orders fall
within the Schedule to the Act, irrespective of the fact that they contain additional provisions
which are not accounted for in the MSOs, the Standing Orders would not be deemed to be
invalid or ultra vires of the Act. The MSOs only serve as a model for framing the Standing
Orders.

Hindustan Lever v Workmen, (1974)

In the present case, the issue relating to the ‘transfer of workmen’ was highlighted by
concurring that, the Manager is vested with the discretion of transfer of workmen amongst
different departments of the same company, so far as the terms of the contract of employment
are not affected. Further, if the transfer is found to be valid, the onus of proving it to be
invalid lies on the workmen in dispute.

SECTION 4 – CONDITIONS FOR CERTIFICATION OF STANDING

ORDERS:

The Certifying Officer (CO) shall certify the SOs under this act if:

1. Provision is made in the SO for every matter set out in the schedule, which is applicable to
the Industrial Establishment;

2. The Standing Orders are otherwise in conformity with the provisions of this act.

 The CO or the appellate authority shall have the power to adjudicate upon the fairness
or reasonableness of the provisions of the SOs.
 While doing so, the CO is directed to consider and weigh the social interest in the
claims of the employer and the demands of workmen.
 Modification of SOs is permissible under S. 10 but that can be achieved only by
adhering to the prescribed manner.

DEVIATION FROM MODEL STANDING ORDERS

 The appellate authority or the CO shall see whether the SOs satisfy the conditions
necessary for certifications.
 They can make necessary additions or modifications in draft SOs submitted to
them for certification so as to make the draft certifiable under the Act.
  It is incumbent upon the CO and the appellate authority to insist upon the
Standing Orders confirming to the Model SOs, unless the employer can satisfy
that it is not practicable for him to do so.
 In case of any deviation made by the Draft Standing Order, in matters provided
for in the Model Standing Order, the CO can judge the reasonableness on any
such departures made from the model rules.
 But if provision has been made in the draft Standing Order in respect of any
matter not contained in the Model Standing Order at all, it cannot be said that the
draft is not in conformity with the provisions of the model SO.

SECTION 5 - CERTIFICATION OF STANDING ORDERS:

 When the Draft SOs is submitted to the CO, he shall forward a copy of it to Trade
Union, if any, of the workmen or where there is no TU to the workmen in such
manner as may be prescribed together with the notice in the prescribed Draft SOs.
 The workmen or the TU is required to submit the objections to the CO within 15
days from the receipt of the notice.
 The CO shall give the employer, TU or the representatives of the workmen
opportunity of being heard. He shall thereafter, decide whether any addition or
modification in the draft SOs is necessary or not to render it certifiable under the
Act and shall make an order in writing.
 The CO shall, after making modification, if any, certify the draft. He shall, within
7 days from certification of the draft, send order u/s 5(2) to the employer, TU or
other prescribed representative of the workmen.
 The purpose of framing the Standing Orders and getting them certified by the CO
is that the conditions of service of that employment shall be regulated by it.
 The manner in which the SOs are made and certified suggests that the SOs, when
certified, will be binding on the employees, who are at the time in service of the
employer.
 Certified Standing Orders are binding on all workmen whether originally
employed before or after the Standing Orders were certified. The SOs of an
establishment when certified by the CO, become the terms and conditions of
service b/w the employer and the employees.
  It is not the function of the CO to suggest how the parties will govern their
relationship on a personal level.
 CSOs cannot be deemed as a statutory concept, but can also not be confined to the
individualistic notions of a contract, as they transcend its limits. Hence, standing
orders effectuated in compliance with the statutory provisions may be considered
as a special kind of contract or a ‘statutory contract’.
 Herein, to answer the question of whether a contract can override in the CSO, it
can be concurred from the Western India case, that “the employer & workmen
cannot enter into a contract overriding the statutory contract as embodied in the
CSO, except when such a contract is entered into in compliance with Section
10(1), so as to modify such CSO, but not otherwise.”

APPEALS: SECTION 6

Any connected party aggrieved by the Certifying Officer's order may file an appeal with
the 'appellate authority' within 30 days, provided that the 'appellate authority's decision,
whether to affirm or change the Standing Order, is final. Within seven days, the appellate
authority must send copies of the Standing Order, as changed, to the associated parties.

MODIFICATION OF STANDING ORDER: SECTION 10

A CSO cannot be changed unless the relevant parties agree to do so within six months of the
last modification or operation of the standing order under Section 7. The parties may also
apply to the Certifying Officer for adjustments to the standing order by annexing five copies
of the proposal or a certified copy of the agreement for revisions, subject to Section 10(1) and
other requirements of this Act.

PAYMENT OF SUBSISTENCE ALLOWANCE: SECTION 10-A

Section 10-A of the Act provides that if a workman is suspended pending an investigation or
inquiry into his wrongdoing, the employer must provide a subsistence allowance of 50% for
the first 90 days and 75% for the remaining period if the delay is not attributable to the
workman. In the event of a dispute over such subsistence allowance, the Act provides an
appeal to the Labour Court established under IDA-1947, whose decision is final.
Furthermore, it specifies that, if more beneficial, the provisions applicable to a certain State
will take precedence over this Section.
TEMPORARY APPLICATION OF MODEL STANDING ORDERS:
SECTION 12-A

MSOs are to be adopted in the period between the applicability of this Act and the operation
of the CSO, despite the provisions of Sections 3–12, with Sections 9, 13(2), and 13-A
applying in the same way as they would to a CSO. It further states that if two types of
workers exist, and the daily workers use a CSO, the monthly workers should use the MSO.

PENALTIES AND PROCEDURE: SECTION 13

If an employer violates Section 3 or 10 of the Act, the Act makes it a criminal offence,
punishable by a fine of Rs. 5000 and an extra Rs. 200 per day for a continuing infraction. In
addition, if the CSO is violated, a punishment of Rs. 100 is imposed, plus an additional fee of
Rs. 25 each day if the violation continues. The Section specifies that no prosecution shall be
brought under it unless the competent Government has given its prior sanction, and that any
prosecution brought under it shall be tried only by courts not inferior to the
Metropolitan/Judicial Magistrate of Second Class.

INTERPRETATION OF STANDING ORDERS: SECTION 13-A

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: SECTION 14-A

The competent Government may delegate its powers under the Act to a Central or State
Government officer or subordinate authority, as the case may be, subject to the directions set
forth in the notification.

POWER TO MAKE RULES: SECTION 15

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 MSOs;
 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, however, that the Central Government's rules are passed/annulled by each House of
Parliament without affecting the legitimacy of anything done under them.

CONCLUSION

The Act is a statutory framework that formally defines the employment relationship between
the employer and the workers/trade union. The concept of'standing orders,' which is
amorphous in nature and is a statutorily proclaimed contract that represents the intent of the
parties regulated, is a significant initiative of this Act. Finally, while it lays out an example
concept, it necessitates extensive adjustments in the current employment scenario practised
by the primary employer in order to substantially achieve the Constitutional goal of providing
socio-economic justice.