KLE SOCIETY’S KLE COLLEGE OF LAW, NAVI MUMBAI

Conceptual Analysis of Industry and Standing Orders

SUBJECT – LABOUR LAW
BY

SUHAS KISAN BHILARE

CLASS - FYLLB
ROLL NO. 12 A

SUBMITTED TO
PROF. MRUNALINI JDHAV
(ASSISTANT PROFESSOR OF LABOUR LAW)
 KLE SOCIETY’S KLE COLLEGE OF LAW, NAVI MUMBAI

CERTIFICATE

This is to certify that the Research Project submitted by Suhas Kisan Bhilare, FYLLB,

(Roll no.) 12 A , Conceptual Analysis of Industry and Standing Orders is a record of research
work done by her during the academic year 2023-2024 under my supervision.

Place: Kalamboli, Navi Mumbai

Date: 19 Dec 2023

Prof, Adv. MRUNALINI JDHAV

Assistant Professor

Prof. Dinkar Gitte

Principal, KLE College of Law

Kalamboli, Navi Mumbai

 TABLE OF CONTENT

ABSTRACT

INTRODUCTION

MEANING OF STANDING ORDERS

BACKGROUND

NATURE AND STATUTORY NATURE

REFERENCES

CONCLUSION
 ABSTRACT

The Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as the ISO) was
enacted to require employers in industrial establishments to define with sufficient precision the
conditions of employment under them, and to make the said conditions known to workmen
employed by them. The ISO not only requires the employers to lay down conditions of service but
also requires that the conditions of service must be clearly laid down so that there may not be any
confusion or uncertainty in the minds of the workmen, who are required to work in accordance
therewith.1

INTRODUCTION
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It’s a shocking but bitter truth. These were the conditions of workers employed in the industry during
the 18th century. Nobody can imagine the harsh conditions in which they had to work. The employer
hired them on his terms and conditions and terminated them at any time without giving any reasons.
Huge deductions were made from their low wages for small and petty mistakes, which left them with
no money at all, as a result of which their conditions worsened and they lived a harsh and pathetic
life.

This grabbed the attention of the government, and so discussions and conferences were held on the
issue of better working conditions for labourers and workers. This led to the enactment of a number
of pieces of legislation in this regard that regulated the freedom of employers and provided better
working conditions for employees. One such piece of legislation is the Industrial Employment
(Standing Orders) Act, 1946. The present article gives an overview of the Act and the provisions
contained therein. It explains the objective and features of the Act and mentions the requirement of
submitting and certifying the standing orders. 2

MEANING OF STANDING ORDERS

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Standing orders set out rules and regulations for employees and working conditions in any
employment relationship. For example, many online streaming platforms require their customers to
subscribe and pay annual fees. This is a kind of standard order that sets out conditions for customers
to enjoy online streaming.

In the case of Saroj Kumar Ghosh v. Chairman, Orissa State (1969), it was observed that
‘termination of employment’ and superannuation cannot be equated. The former is a positive act by
which one of the parties can end the employment of the other, while the latter is an automatic
process. It was further observed that fixing the age for retirement, because of which the employment
of a person may cease, does not violate the Act.

If the standing order provides for a notice to be served on the employee to give him an opportunity to
present his side and reasons against the dismissal order, it must be obeyed and treated as a condition
precedent in order to make the dismissal order valid. This was held in the case of Lakshmiratan
Cotton Mills v. Workmen (1975). In the case of Associated Cement Companies Ltd. v. T.C.
Srivastava (1984), it was held that a second opportunity to appear and give reasons to the employee
is not necessary, neither under ordinary land law nor under industrial law. It can be given only if it is
mentioned in the standing order. But if no such opportunity is given, it does not vitiate any inquiry
that is otherwise valid.3

HISTORICAL BACKGROUND

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Earlier, the working conditions and conditions of employment were governed by the contracts
between employer and employee. The terms and conditions were not specified in detail, which led to
confusion and chaos. It often led to friction between them in an industry. In the 18th century, with
the advent of trade unions and workers’ unions in the country, the problems of workers and their
pathetic conditions were taken into consideration. The focus of the government was shifted to
industrial peace and better working conditions for the employees. The settlement of labour problems
became a major concern for the state. This is because it affected the productivity of industries and
their role in the economy of the nation.

This need to precisely define employment conditions became a burning topic of discussion in the
Tripartite Labour Conferences, as a result of which the Industrial Employment (Standing Orders)
Act, 1946, was enacted. The Act makes it compulsory for the industries governed by it to define the
working conditions of employees, that they must be known to them, and that they must give consent
to all the conditions. The aim is to regulate the conditions of employment, the appointment of
employees, their discharge, disciplinary actions to be taken against them, if any, holidays, etc. It
helped in creating uniformity in the conditions and a better working environment for the employees
belonging to the same category of employment. 4

NATURE

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Though the legal nature of Standing Orders is mostly considered to be statutory in nature and the
same has been reinforced in several judgements by the Apex Court, there have been several
arguments debating the claim. The nature of Standing Orders has been considered as contractual at
times, and an ‘award’ at others. Meanwhile, the argument that the nature of Standing Order is
ambiguous and inconclusive seems to stand corrected as it fails to be put in one category without
solid arguments against the claim of its nature as statutory, contractual or an award.

STATUTORY

The very first argument of Standing Orders as being statutory in nature comes from the case The
Bagalkot Cement Co. Ltd. Vs. R.K. Pathan & Ors. wherein the Supreme Court stated that:

“The object of the Act as we have already seen, was to require the employers to make the conditions
of employment precise and definite and the act ultimately intended to prescribe these conditions in
the from of standing orders so that what used to be governed by a contract hereto before would now
be governed by the statutory standing orders…”.

This decision of the Supreme Court was relied upon in various other judgements to conclude that
Standing Orders, once certified, are statutory in nature. This was reinforced by the High Court of
Gujarat in the case of Tata Chemicals Ltd. And Ors. vs Kailash C. Adhvaryu wherein the judge
distinguished between a statutory obligation and a contractual obligation and therefore came to the
conclusion that certification of standing orders under the IESO Act creates statutory rights and
obligations.

Another argument pertaining to the statutory nature of standing orders is that the Certifying Officer,
in certifying the draft of the standing orders made by the employer, is part of a delegated legislation.
The process of hearing from both parties before certifying the standing orders may as well be seen as
a consultation of sorts to those affected by the decision. This, in turn, makes the Certifying Officer,
part of a rule-making process, thus making the entire process statutory in nature5

CONCLUSION

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It can be concluded that the Act has been able to prevent and reduce the problems faced by
employees and workmen. It regulated the working hours, disciplinary actions, and other conditions
of employment. This reduced the freedom of employers to hire workers on any terms and conditions.
These conditions were usually harsh, and the workers did not have any option but to accept them in
order to earn a living. Due to the doctrine of laissez faire, the government could not intervene in such
matters. But with the introduction of the concept of the welfare state, there has been a change in
ideology. The aim of the government in this regard now is to secure good working conditions and a
decent standard of living with the help of social security measures.

However, with the enactment of the Act, the situation has changed, and there has been an
improvement in the terms and conditions of employment. Workers now enjoy a friendly working
environment with regulated wages and time for rest. The contract of employment signed by them
contains all the clauses and provisions that provide conditions for their employment. It can be said
that the Act is social legislation enacted for the welfare of the working class. With the help of such
enactments, the government seeks to protect the interests of employees and undertakes to establish
harmonious relations between employer and employee. Because of such ideologies and measures,
one who provides work is no longer a master, and one who works is no longer a servant. There is a
relationship between employer and employee. 6

REFERENCES

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
https://www.teamleaseregtech.com/resources/acts/article/25/industrial-employment-standing-
orders-act-1946/
 https://ruralindiaonline.org/en/library/resource/the-industrial-employment-standing-orders-
act-1946/
 https://www.ilo.org/dyn/natlex/natlex4.detail?
p_lang=en&p_isn=48111&p_country=IND&p_count=482&p_classification=02&p_classcou
nt=38
 https://labour.delhi.gov.in/labour/industrial-employment-act-1946
 https://taxguru.in/corporate-law/employment-standing-order-act-1946-delhi.html
 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1807649
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