Labour Law

Topic: Salient Features of the Industrial Employment (Standing Orders)

Act,1946
 TABLE OF CONTENTS

1. Introduction
2. Objective
3. Research questions
4. Scope and limitation
5. Aim and objective
6. Concept and Nature
7. Special features of the Act
8. Procedure for Approval of Standing order
9. Register of Standing order
10. Posting of Standing Order
11. Duration and Modification of Standing order
12. Payment of Subsistence Allowance
13. Penalty and Procedure
14. Interpretation of Standing Orders
15. Delegation of power and power to make Rules
16. Conclusion
17. Bibliography

TABLE OF CASES

1. U.P. State Sugar Corporation and Authority v. Bipin Kumar Mishra, (1994) I LLJ 1004
All
2. S.K. Sheshadri v. H.A.L. and others, ILR 1983 KAR 634
3. Eicher Goodearth ltd v. R K Soni, 1993 LLR 524 (Raj HC)
4. Rajastan SRTC v. Krishnakant, AIR 1995 SC 1715
5. Shahadra Saharanpur Light Railway Co. v. S.S. Railway Workers Union, 1969 AIR 513
1969 SCR (2) 131
 STATUTES USED

 Industrial Disputes(standing Orders)Act,1946

 INTRODUCTION
To avoid friction amongst the employers and workmen in an industry is the principal aim of
Indian legislation. It was considered that society had a vital interest in settlement of terms of
employment of industrial labour and labour problems. Therefore, steps were taken by the central
government to enact industrial employement (standing orders) act, 1946 with a view of
protection of workmen with regards to the terms of employement. There was no uniformity in
the conditions of service of workers until this act was brought. The demand for statutory service
conditions was first raised by Bombay cotton textile workers in 1927-28. The Bombay Industrial
disputes act,1938,for the first time provided, statutory standing orders. The labour investigation
committee 1944-46, observed : “An industrial worker has the right to know the terms and
conditions which he is expected to follow.” The industrial employement (standing orders) bill,
1946, was passed by the legislature and it received the assent on 23rd april,1946.

OBJECTIVE
The objective of this project is to conduct a brief study on the Industrial Disputes Standing Order
Act,1946.

RESEARCH QUESTIONS
 What are the special features of the act?
 What are Standing Orders?
 What are Model Standing Orders

SCOPE AND LIMITATION

This project is all about the Industrial Employment (standing orders) act,1946. Therefore, my
findings of the project are limited to the particular act and it covers almost all the sections of the
act.
 AIM AND OBJECTIVE
The aim and object of the Central Government was to introduce uniform Standing Orders and
provide equal conditions of service to the workmen employed in industrial establishment before
or after the Standing Orders came into force. After the enforcement of the Standing Orders, the
conditions laid down therein, will be binding on all those presently in the employment of the
concerned establishment and appointed thereafter.

In the Preamble, it has been clearly stated that it will deal with the conditions of labourers in an
industrial establishment. The employers shall have to define precisely the conditions of
employment and to make these conditions known to the workmen employed in their industries. It
provides uniformity of terms and conditions in respect of all workmen employed in the industry
and belong to the same category. All these conditions will be reduced to writing and to get them
implemented compulsorily with a view to avoid any unnecessary industrial unrest. These may be
described as written ‘Code of Conduct’ for workmen, and the working against these orders will
amount to indiscipline and will be described as an act of misconduct.

This Act will apply to all industrial establishments employing 100 or more workers or employed
on any day preceding 12 months. In several States, the governments have extended the
application of the“Industrial Employment (Standing Orders) Act, 1946”to the industrial
establishments employing 50 or more persons. Actually, there is no need to delimit the number
of employees. As long as the two parties of the agreement agree to enrich the productivity,
production and multi-skilling of the industrial establishment, the Standing Orders may be
prepared by the management in consultation with the federation or recognized unions. In case of
any disagreement, the disputed matter will be decided by the competent certifying authority.

On the basis of the judicial judgments given by the Supreme Court from time to time, the main
objectives may be given as below:

I.“To define, with sufficient precision, the principal conditions of employment in industrial
establishments under them and to make the said conditions known to workmen employed by
them.”
II. To“regulate standards of conduct of the employers and employees so that labourmanagement
relations could be improved.”

III. To“maintain proper discipline, harmonious working conditions and achieve higher
productivity by providing satisfactory employment and working conditions.”

IV. “To provide for redressal of grievances arising out of employment or relating to unfair
treatment of wrongful exaction on the part of the employers against the employees.”

V. To“specify the duties and responsibilities of both the employers and the employees.

VI. To provide statutory sanctity and importance to the Standing Orders.

CONCEPT AND NATURE

The Industrial Employment Act, 1946 defines the meaning of ‘Standing Orders’ in section 2 (g).
These are the rules which relate to the matters explained in the Schedule. Under this section, the
employer has to make a draft of standing orders for submission to the certifying officers
regarding the matters prescribed in the Schedule. The matters which are referred in the Schedule
are as under:

a. The categories of the workers should be clearly defined, i.e., whether they are regular or
temporary on probation or badlis etc.

b. The working hours, rates of wages, holidays, pay-days should be intimated to the employees.

c. The shift of working should also be mentioned in the Schedule.

d. It should be clearly mentioned regarding the rules of attendance and late coming.

e. The authority which will sanction leave and holidays and how to apply should also be clearly
specified in the Schedule.

f. The requirement of entrance and exit from the premises and liability should also be specified.

g. The reopening and the closing of any section of the industry, temporary stoppage of work, the
rights and responsibilities of the employer arisen there-from should also be specified.
h. The notice for termination of employment should also be given by the employer.

i. The rules regarding the acts or omissions, suspension or dismissal for misconduct etc. be
given.

j. The means of redressal for wrongful act or unfair treatment by the employer or his nominee
should also be specified in the Schedule.

k. Any other matter which is deemed fit by the employer or employees.

The abovesaid items are not exhaustive. Certain items may be included whereas many other
important items may be excluded. The matters enumerated in the Schedule have been considered
by the judiciary in a number of cases like in the case of“U.P. Electricity Supply Co.”the Supreme
Court held: “The termination in item 8 doesn’t cover each and every form of termination or
cessation of employment. In view of this it held that it didn’t cover superannuation which is
automatic and did not require notice or any act on the part of employer or workmen. The court
agreed that if termination is to be read in a wider sense as meaning employment coming to an
end, there was no necessity to have item 9 because dismissal would then be covered by
termination.

SPECIAL FEATURES OF THE ACT

1. The employer of every industrial establishment to which the act applies is required to
frame draft standing orders and to submit them to the certifying officer, who is generally
the labour commissioner;
2. The definition of workmen under this act includes a “Supervisory Technical Personnel”
under certain conditions;
3. The certifying officer is empowered to modify or add the draft standing orders so as to
render them certifiable under the act;
4. A group of employers of similar industrial establishments may submit joint standing
order;
5. The government set out model standing orders, the draft standing order framed by an
employer should as far as practicable be in conformity with the model standing orders;
 6. The act normally applies to every industrial establishment wherein 100 or more workmen
are employed.
7. The certifying officer and appellate Authorities shall have all the powers of a civil court
8. The employers can be penalized for the failure to submit draft standing order for
certification or contravention of any provision of the standing order finally certified.
9. The appropriate government may by a gazette notification exempt any establishment or
class of establishment from any of the provisions of the act.
10. The appropriate government may after previous publication by notification in official
gazette, make rules to carry out the purpose of the act.

PROCEDURE FOR APPROVAL OF STANDINGS ORDER

The main provisions that deal for the approval of standing orders are:

1. Procedure for the submission of draft standing orders (sec 3)

2. Procedure for conditions of certification of standing orders (sec 4)
3. Procedure for certification of standing order (procedure for adoption) (sec 5)
4. Appeals (sec 6)

SUBMISSION OF DRAFT STANDING ORDERS

1. Every employer covered under the act has to prepare standing orders, covering the
matters required in standing orders. It is obligatory on the part of the employer to furnish
the draft standings order.
2. Within 6 months from the date on which this act becomes applicable to industrial
establishment, the employer shall submit to the certifying officers, 5 copies of the drafts
standing orders proposed by him. Ther draft shall include the prescribed particulars of the
workmen.
3. A group of employer under similar industrial establishments may submit a joint
draft/standing order under this section (in subject to the prescribed conditions)
 4. Provisions shall have to be made as such every matter set out in the schedule which may
be applicable to the industrial establishment and were model standing orders have been
prescribed.

In U.P. State Sugar Corporation and Authority v. Bipin Kumar Mishra1, it was held that there is
no requirement under the act to frame standing order in respect to transfer, hence the employer
cannot be denied the normal right to transfer an employee from one place to another. The
employer cannot be denied the right to frame rules and regulations relating to transfer of
employees.

In S.K. Sheshadri v. H.A.L. and others2, the validity of the standing order which made unduly
lending in the company premises a misconduct was challenged a violative of art 14 the the
constitution. The said standing order was held not to be discriminatory. It was further held that as
long as standing orders fall within the schedule to the act, they would not be invalid or ultavirus
because they contain additional provisions not provided for in the model standing orders.

CERTIFICATION OF STANDING ORDERS

1. If provision is made therein for every matter set out in the schedule which is
applicable to the Industrial Establishment; and
2. If the standing orders are otherwise in conformity with the provision of this act and it
shall be the function of the certifying officer or appellate authority to reasonableness
of the provision of any standing orders.
3. The certifying officer receipt of the draft standing orders from the employer shall
forward a copy of the draft standing orders to the recognized trade union of the
establishment seeking submission of objection to draft standing orders if any.
4. If no such union exists, to three representatives of workmen in the establishment
elected t a meeting called for the purpose.
5. A notice in the prescribed form will be given inviting objections, if any, to the draft
standing orders within fifteen days of receipt of these orders.

1
(1994) I LLJ 1004 All
2
ILR 1983 KAR 634
 6. After giving opportunity of being heard to the parties, the certifying officer shall
decide whether or not any modification of the draft is necessary, and make an order in
writing accordingly.
7. In doing so, the certifying officer can adjudicate upon the fairness and reasonableness
of provisions in the drafts.
8. The certifying officer shall thereupon certify the standing orders with or without
modifications and forward the authenticated copies thereof to the employer and to the
trade union or other prescribed representatives of the workmen within seventy days
from the date of his orders.
9. The standing orders can into operation on the expiry of 30 days from the date on
which the authenticated copies of the standing orders are forwarded to the employer
and the workmen by the certifying officer.
10. The conditions of employment, which will be binding on the employer and workmen
from the date when they become operational.

In Eicher Goodearth ltd v. R K Soni3, it was held that once the standing orders are certified, they
supersede any term and conditions of employment, contained in the appointment letter.
Therefore, if there is any inconsistency between standing orders and appointment letter, the
provisions of standing orders shall prevail.

In Rajastan SRTC v. Krishnakant4, it was held that standing orders are binding on both:
employer and employee. Standing orders are the statutorily imposed conditions of service.
However, they are not statutory provisions themselves(standing orders “even when approved do
not become the law” in the sense in which rules and notifications issued under delegated
legislation become after they are published)

APPEALS

An aggrieved party may appeal to the appellate authority within thirty days from the date on
which the copies of the standing orders were sent to it by the certifying officer. The order of the
authority shall be final.

3
1993 LLR 524 (Raj HC)
4
AIR 1995 SC 1715
Section 6(1) empowers the appellate authority to do only two things:

1. Confirm the standing orders in the form certified by the certifying officer\
2. Confirm the standing order after amending them by making the necessary modifications
or additions.

The certified standing orders become enforceable on the expiry of 30 days from the date on
which the authenticated copies of the same are sent to the parties by the certifying officer. If an
appeal has been filed, it shall come into operation on the expiry of 7 days from the date on which
copies of the order of appellate authority are sent to the parties.

REGISTER OF STANDING ORDERS

A copy of all standing orders as finally certified under this act shall be filed by the certifying
officer in a register in the prescribed form. It shall furnish a copy of it to any person on payment
of the prescribed fees.

POSTING OF STANDING ORDERS

The text of the standing order finally certified shall be prominently posted by the employer in
English and in language understood by majority of the workmen on special board to be
maintained for that purpose at or near the entrance through which the majority of workmen enter
the industrial establishment.

DURATION AND MODIFICATIONS OF STANDING ORDERS

Standing orders, finally certified shall not except an agreement between the employer and the
workmen, be liable to modify until the expiry of 6 months from the date on which the standing
orders or last modification thereof came into operation.

An employer, workmen, trade union, or any representative body of workmen may apply to the
certifying officer to have the standing orders modified and such applications shall be
accompanied by 5 copies of the modification proposed to be made and where such modification
are proposed to be made by agreement between employer and the workmen a certified copy of
that agreement shall be filed along with the application.

In Shahadra Saharanpur Light Railway Co. v. S.S. Railway Workers Union5, the standing orders
relating to termination of service of permanent workmen was modified requiring the employer
top give reasons and communicating the pay in lieu of notice. The modification held to be fair
and reasonable. But the modification of standings order requiring the giving of second show
cause notice at the stage of imposing punishment of removal cannot be considered as fair and
reasonable.

PAYMENT OF SUBSISTENCE ALLOWANCE

1. Where the employer suspended the workmen pending investigation or inquiry into
complainant or charges of misconduct against the workmen the subsistence allowance
shall be payable
2. At the rate of 50% of wages which the workmen was entitled to immediately preceding
the date of such suspension for the first 90 days of suspension; and\
3. At the rate of 75% of such wages for the remaining period of suspension if there is delay
in completion of disciplinary proceedings against such workmen is not directly
attributable to the conduct of such workmen.
4. If any dispute arises regarding the subsistence allowance payable to a workmen, it may
be reffered to the labour court constituted under I.D.Act,1947.

PENALTIES AND PROCEDURES

1. An employer who fails to submit draft standing orders as required by sec 3 or who
modifies standing orders otherwise than in accordance with sec 10, shall be punishable
with fine which may extend to 5000 rupees and in case of a continuing offence with a
further fine which may extend to 200 rupees for every day after the first, during which
the offence continues.
2. An employer, who does any act in contravention of the standing orders finally certified
under this act for his industrial establishment shall be punishable with fine which may

5
 1969 AIR 513 1969 SCR (2) 131
 extend to 100 rs, in case of continuing offence with a further fine which may extend to 25
rs per day.
3. No prosecution for an offence punishable under this section shall be instituted except
with the previous sanction of appropriate government.
4. No court, inferior to that of a presidency magistrate or magistrate of second class shall,
try any offence under this section.

INTERPRETATION OF STANDINGS ORDER

If any question arises as to the interpretation of a standing order certified under this act, any
employer, workman, or trade union may refer the question to any of the labour courts constituted
under the industrial disputes act, and specified for the disposal of such proceedings by the app.
Gov by notification in the official gazette and the l court to which is referred to, shall after giving
the parties an opportunity of being heard, decide the question, and such decision shall be final
and binding on the parties.

DELEGATION OF POWER AND POWER TO MAKE RULES

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. 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.
 CONCLUSION

It is to conclude that the Industrial Employment (standing Orders)Act is a regulatory regime to

formally define the employment relations between the workmen/trade union and the employer. A
very prominent initiative of this Act is the concept of ‘standing orders’ which is amorphous in
nature being a contract promulgated statutorily, that represent the will of the parties so regulated.
Finally, it may be stated that, though it lays an exemplary notion, it requires thorough reforms in
respect of the present scenario of employment practised by the principal employer so as to fulfil
the Constitutional objective of securing socio-economic justice substantially.

BIBLOGRAPHY

1. https://blog.ipleaders.in/industrial-employment-standing-orders-act-1946/, last
accessed on 9th sep,2020.
2. https://s.docworkspace.com/d/AON1yFKm64c86aOd5t2dFA, last accessed on 9th
sep,2020.
3. https://www.toppr.com/guides/legal-aptitude/labour-laws/industrial-employment-
standing-orders-act-1946/, last accessed on 9th sep,2020.