LABOUR LAW

INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1948

1. APPLICATION
The Act aims at making it mandatory for employers to mention their working conditions to
employees, deduce them in writing, and get the consent of the employees in order to prevent
and reduce industrial disputes and chaos.
It applies to every industrial establishment-
a. Which is situated in India,
b. And employs 100 or more workmen on any day of the preceding 12 months.

The appropriate Government may by a Gazette notification apply the Act to any Industrial
establishment employing such number of persons as specified in the notification. The
number of employees fixed by the Government may be less than 100. But the Appropriate
Government must give two months' prior notice of its intention to make any such extension
of the Act.

The Act does not apply to the following establishments

(1) Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations
Act, 1946 apply;

(2) Any industrial establishment to which the provisions of the M.P. Industrial Employment
(S.O.) Act, 1961 apply :

Provided that notwithstanding anything contained in the Madhya Pradesh Industrial

Employment (Standing Orders) Act, 1961, the provisions of this Act shall apply to all
industrial establishments under the control of the Central Government.

Shahdara S. Light Railway Co. v S.S. Railway Workers Union (1969) SC

This act requires the employers to define the conditions of service in their establishments
and to reduce them to writing and to get them compulsorily certified with a view to avoid
unnecessary industrial disputes.

Avery India Ltd. v Second Industrial Tribunal, West Bengal (1972) SC

The provision as to the age of retirement in the standing orders of an establishment would
apply to all employees irrespective of whether they entered into service prior to or
subsequent to the coming into force of the standing orders and even though there was no
such provision for retirement in the past.

Section 13 B, further lays down certain industrial establishments which are regulated by
the following rules and regulations are not covered under the Act, i.e. to which the act does
not apply. They are as follows-

a. The Fundamental and Supplementary Rules,

b. The Civil Service (Classification, Control, and Appeal) Rules,
c. The Civil Services (Temporary Service) Rules,
d. The Revised Leave Rules,
e. The Civil Service Regulations,
f. The Civilians Defence Service (Classification, Control and Appeal) Rules,
g. The Indian Railway Establishment Code,
h. Any other rules and regulations notified in the Official Gazette by the appropriate
government.

Evidently, these rules donot apply to industrial establishment under private management or
under statutory corporation. The appropriate court may extend the act to any class or classes
of industrial establishment as it deems fit.

U.P.S.E. Board v. Hari Shanker (1979) SC

Provisions of the standing orders act must prevail over sn 79(c) of the Electricity (Supply)
Act in regards to matters to which the standing orders act applies.

Section 14: POWER TO EXEMPT

 Section 14 of the Act authorises the appropriate Government to exempt conditionally or
unconditionally any industrial establishment or class of industrial establishments from all or
any of the provisions of this Act.

Raman Nambisan v. Madras State Electricity Board, 1967

➢ Section 14 enables the Government to exempt any Industrial establishment or clags of

establishments from all or any provisions of the Act and not a section of the industrial
establishment.

MAIN FEATURES OF THE ACT

Special features of the Act.—The following are some of the main features of the Industrial
Employment (Standing Orders) Act, 1946

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, for certification;
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 to 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 Orders
for certification;
5) The Government may by rules set out model Standing Orders for the purposes of this Act.
The Draft Standing Order framed by an employer should as far as practicable be in
conformity with the Model Standing Orders;
6) This Act normally applies to every industrial establishment wherein one hundred or more
workmen are employed;
7) The certifying officers and appellate authorities shall have all the powers of a Civil Court in
respect of certain matters provided in section 19 of the Act;
8) The employer can be penalised for failure to submit draft Standing Order for certification
or for 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 industrial establishments from any of the provisions of the Act;
10) The appropriate Government may after previous publication by notification in the Official
Gazette, make rules to carry out the purposes of this Act.

DEFINITIONS

SECTION 2(e)- INDUSTRIAL ESTABLISHMENT

The expression industrial establishment means-

(1) An industrial establishment as defined in clause (ii) of section 2 of the Payment of Wages
Act, 1936;
industrial or other establishment means any
(a) tramway service, or motor transport service engaged in carrying passengers or goods
or both by road for hire or reward;
(aa) air transport service other than such service belonging to or exclusively employed in
the military, naval or air forces of the Union or the Civil Aviation Department of the
Government of India;
(b) dock, wharf or jetty;
(c) inland vessel, mechanically propelled;
(d) mine, quarry or oil-field;
(e) plantation;
(f) workshop or other establishment in which articles are produced, adapted or
manufactured, with a view to their use, transport or sale;
(g) establishment, in which any work relating to the construction, development or
maintenance of buildings, roads, bridges or canals, or relating to operations connected with
navigation, irrigation or the supply of water, or relating to the generation, transmission and
distribution of electricity or any other form of power is being carried on.
(h) any other establishment or class of establishments which the Central Government or a
State Government may, having regard to the nature thereof, the need protection of persons
employed therein and other relevant circumstances, specify, by notification in the Official
Gazette.

(2) a factory as defined in clause (m) Of section 2 of the Factories Act, 1948;
"factory" means any premises including the precincts thereof--
 (i) whereon ten or more workers are working, or were working on any day of the preceding
twelve months, and in any part of which a manufacturing process is being carried on with
the aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is being
carried on without the aid of power, or is ordinarily so carried on,--
but does not include a mine subject to the operation of [the Mines Act, 1952 (35 of 1952)],
or [a mobile mobile unit belonging to the armed forces of the Union, railway running shed
or a hotel, restaurant or eating place].
Explanation I -For computing the number of workers for the purposes of this clause all the
workers in different groups and relays in a day shall be taken into account;
Explanation II.--For the purposes of this clause, the mere fact that an Electronic Data
Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not
be construed to make it a factory if no manufacturing process is being carried on in such
premises or part thereof;

(3) a railway as defined in clause (4) Of section 2 Of the Indian Railways Act, 1890;
Indian Railways Act of 1890 has been repealed by Repealing Act, 1938
Section 3(4) defines Railways as-
the railway means the railway or any portion of the railway, for the public carriage of
passengers, animals or goods, and includes—
(a) all land within the fences or other boundary-marks indicating the limits of the land
appurtenant to the railway,
(b) all lines of rails, sidings, or branches worked over for the purposes of, or in connection
with, the railway;
(c) all stations, offices, warehouses, wharves, manufactories, fixed plant and
workshops, machinery and other works constructed for the purposes of, or in connection
with, the railway; and
(d) all ferries, ships, boats and rafts which are used on inland waters for the purposes of
the traffic of the railway and belong to or are hired or worked by the authority
administering the railway:

(4) the establishment of a person who for the purpose of fulfilling a contract with the owner
of any industrial establishment, employs workmen.
Karnataka Agro Industries Corporation Employees' Association v. State of Karnataka, 1987

Held that the Karnataka Agro-Industries Corporation cannot bind the workmen to the service
rules unilaterally prescribed by its Board of Management. Consequently Model Standing
Orders will be applicable to the workmen till the certified Standing Orders are brought into
force.

K. Thiruvenkataswmni v. Coimbatore Municipality, 1968

The Electricity Department Of Municipality is an 'industrial establishment' and also that the
Act and the model Standing Orders framed thereunder apply to a person who is an employee
of that department.

SECTION 2(g)- STANDING ORDERS

The expression 'Standing Orders" means rules relating to matters set out in the Schedule of this
Act. The following matters should according to the Schedule be provided in Standing Orders
under this Act:

(1) Classification of workmen, e.g., whether permanent, temporary, apprentice, probationers,

badlis or fixed term employment.
(2) Manner of intimating to workmen periods and hours of work, holidays, pay days and wage
rates.
(3) Shift working.
(4) Attendance and late coming.
(5) Conditions of procedure in applying for and the authority which may grant leave and
holidays.
(6) Requirement to enter premises by certain gates, and liability to search.
(7) Closing and reopening of sections of the industrial establishment, and temporary stoppages
of work and the rights and liabilities of the employer and workmen arising therefrom.
(8) Termination of employment and the notice thereof to be given by employer and workmen.
(9) Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct.
(10) Means of redress for workmen against unfair treatment or wrongful exactions by the
employer or his agents or servant.
(11) Any other matter which may be prescribed.
New Victoria Mills Co. Ltd. v. Presiding Officer Labour Court, 1970

That the misconduct for which an employee may be dismissed need not necessarily have been
committed in the course of his employment. Therefore, a workman employed as a sweeper who
has either been proved to have committed a theft or to have so acted as to facilitate or aid theft
may be guilty of such misconduct as to justify his dismissal. All that has to be shown is that the
alleged misconduct affects the competence of the employee for the particular kind of work he
does.

Rohtak and Hisar District Electricity Supply Company Limited v State of U.P. (1966)

The standing orders cannot provide for a matter not listed in the schedule to the Industrial
Employment (Standing Orders) Act, 1948.

SUBMISSION OF DRAFT STANDING ORDERS

SECTION 3- Submission of Draft Standing

(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 five
copies of the Draft Standing Orders proposed by him for adoption in his industrial
establishment.

(2) The Draft Standing Ordet•s 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 industrial establishment. The
name of the Trade Union, if any to which workmen belong, should also be sent along with the
Draft Standing Orders.

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

Hindustan Lever v. Workmen, 1974

It was held that if the order of transfer is prima facie valid the burden of proving that it is invalid
lie on the workmen and in the absence of any finding that the transfer order was mala fide or
vitiated by unfair labour practice the award directing the reposting of the workman in his
original department was bad.

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

The validity of the Standing Order which made unduly lending in the company premises a
misconduct was challenged as violative of Art. 14 of the Constitution. The said Standing Order
was held not to be discriminatory. It was further held that as long as the Standing Orders fall
within the Schedule to the Act, they would not be invalid or ultra vires because they contain
additional provisions not provided for in the Model Standing Orders.

U.P. State Sugar Corporation & Another v. Bipin Kumar Mishra, 1994

There is no requirement under the Act to frame standing order in respect of transfer, hence the
employer cannot be denied the normal right to transfer an employee from one place to another.
The employer cannot also be denied the right to frame rules and regulations relating to transfer
of employees.

Sompal Singh v. Artificial Limbs Mfg. Corpn. of India, 1995

The certified Standing Order covering the terms and conditions applicable between the
workman and the employer will prevail and the condition of transfer contained in the order of
appointment cannot be applied, Hence employees cannot be transferred.

Management of Continental Construction Ltd. v, Workmen of Continental Construction,

2003

The Division Bench of the High Court held that since the workmen ignored transfer orders for
months, the Management was justified in drawing the inference that the workmen had
abandoned service and thereby forfeited their appointments. Even the termination of the
workman during his probation was held to be a discharge simpliciter and the proceedings did
not cast any stigma on his conduct. The wårkmen failed to prove charge of mala fide against
the Management.

SECTION 4- Conditions for certification of standing orders-

The Certifying Officer shall certify the Standing Orders under this Act if :—

(1) provision is made in the Standing Order for every matter set out in the Schedule, which is
applicable to the industrial establishment; and

(2) the Standing Orders are otherwise in conformity with the provisions of this Act.

Western India Match Co. v Workmen, 1973

The Certifying Officer or the appellate authority shall have the power to adjudicate upon the
fairness or reasonableness of the provisions of the Standing Orders. While doing so the
Certifying Officer is directed to consider and weigh social interest in the claims of the employer
and the demands of workmen.

Shahadara Saharanpur Light Railway Co. v. S.S. Railway Workers Union, 1969

Modification of Standing Orders is permissible under section 10 but that can achieved only by
adhering to the prescribed manner. Modification of Standing Order requiring giving of reasons
in cases of discharge of workman was held to be fair and reasonable.

SECTION 10- DURATION AND MODIFICATION OF CERTIFIED STANDING ORDERS:

Certified standing orders may be notified on the application of the employer or the workmen
after the expiry of 6 months after the certified standing orders or the last modification thereof
came into operation.

However under certain circumstances, the modification may be applied for within 6 months
after the certified standing order or the last modification thereof come into operation.

Geep Industrial Syndicate Ltd. v. Industrial Syndicate Employees Union, 1999

The Karnataka HC held that modification under section 10 includes addition or deletion of
particular clause in standing orders already certified.

Sn. 10 (1)- Modification within 6 months on an agreement between employer and workmen

Accd. To Section 10(1), a modification of a certified standing orders within 6 months of its
coming into operation is permissible only on an agreement between the employer and his
workmen.
Likewise, a modification of certified standing orders within 6 months of its last modification
is permissible only on an agreement between employer and his workmen.

Shahdara Saharanpur Light Railway Co. Ltd. v. S.S. Railway Workers Union, 1969,

It was held that section 10 does not state that once a Standing Order is modified and the
modification is certified, no further modification is permissible except upon proof that new
circumstances have arisen since the last modification. An application for modification would
ordinarily be made where

(1) a change of circumstances has occurred, or

(2) where experience of the working of the Standing Orders last certified results in
inconvenience, hardship, anomaly etc., or

(3) where some fact was lost sight of at the time Of certification, or

(4) where the applicant feels that a modification will be more beneficial. It is clear that in
categories other thanvthe first one, there will be no change of circumstances.

Section 10 does not lay down any restriction on the right to apply for modification except those
that are provided in that section itself. It was further observed by the Supreme Court that "the
Act is a beneficient piece of legislation, and, therefore, unless compelled by any words in it the
Court would not be justified in importing in section 10 through inference only a restriction to
the right conferred by it on account of supposed danger of multiplicity of applications'.

The object of providing a time Of 6 months for modification from the date the Standing Orders
or the modification came into operation was to allow the Standing Orders to work for a
sufficiently long time to see whether they work properly or not. Even that time limit is not rigid
because a modification even before six months is permissible by an agreement with the parties.

Section 10(2)- who can make an application for the modification of the certified standing orders

An application for modification of the certified standing orders is made to the certifying officer
under section 10(2) of the act. The application for modification to the certifying officer may be
made by

i) An employer
 ii) Workmen
iii) A trade union
iv) Other representative body of the workmen

An application must be accompanied by 5 copies of the modifications proposed to be made.

The modification may be proposed to be made by an agreement between the employer and the
workmen. In such case, a certified copy of that agreement must be filed along with the
application.

Modification applied for is to be fair and reasonable-

Indian Oil Corporation v Joint Chief Labour Commissioner and Appellate Authority, (1990)

The workmen demanded modification of certified standing order and fix the age of
superannuation at years. It was held that the Authority has jurisdiction to modify standing order
even in conflict with model Standing Order provided such modification is fair and reasonable.
Therefore, the age of superannuation, can be raised to 60 years.

SECTION 13- Penalties and Procedure

Non-submission Of draft Standing Orders by the Employer within the time limit specified in
the Act is made penal under section 13 Of the Act. Similarly modification of the Standing
Orders otherwtise than in accordance with the provision laid down in section 10 of the Act shall
also be punishable.

➢ For these failures a fine extending to rupees five thousand may be imposed upon the
employer.
➢ In case of continuing offence a further fine extending to rupees two hundred per day after
the first day during which the offence continues may be imposed upon the employer.
➢ 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
extend to one hundred rupees and in the case of continuing offence -with a further fine
which may extend to twenty-five rupees for every day after the first during which the
offence continues.
No prosecution for an offence punishable under section 13 Of this Act shall be instituted except
with the previous sanction of the appropriate Government.

No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the second

class shall try an offence under section 13 of the Act.

Sabhapati Singh v U.P. State Road Transport Corporation, (1994)

The Allahabad HC held that the provision regarding the retirement age of the govt. employees
working in the corporation on deputation is to be interpreted as 58 years and not as 60 years.

CERTIFYING OFFICER

Section 2(c)- “Certifying Officer” means a

Labour Commissioner or,

a Regional Labour Commissioner, and

includes any other officer appointed by the appropriate Government, by notification in the
Official Gazette, to perform all or any of the functions of a Certifying Officer under this Act.

Sn 4(6)- Function of Certifying officer-

Accd to sn 4(6), function of the certifying officer is to adjudicate upon the fairness or
reasonableness of the provision of any standing order.

Section 11- POWER OF CERTIFYING OFFICER

Every Certifying Officer and appellate authority shall have all the powers of Civil Court for
the purposes of-

a) receiving evidence,
b) administering oaths,
c) enforcing the attendance Of witnesses, and
d) compelling the discovery and production of documents
The certifying officer is deemed to be a Civil Court within the meaning of section 345 (now
384- Procedure in certain cases of contempt) and 346 (now 385- Procedure where court
considers that case should not be dealt with under section 384 of CrPC).

Correction of mistakes- section 11(2)

Clerical or arithmetical mistakes in any order passed by a Certifying Officer or appellate

authority, or errors arising therein from any accidental slip or omission may, at any time, be
corrected by that officer or authority or the successor-in-office Of such officer or authority, as
the case may be.

Associated Industries v. B.B. Singh, 1972

Supreme Court observed that the fact under section 11 of the Act, the Certifying Officer and
the Appellate Authority have all powers of a Civil Court for certain specified purpose will not
convert them to a 'Court', nor the fact that the matter was agitated in a writ petition before the
High Court will make the proceeding before Labour Court "a civil proceeding in a Court".

N.G.E.F. Ltd. Byappanapnlli v. Industrial Tribunal, 1970

It was held that : "the authority had wrongly overlooked the scope of the application and that
he erred in considering application for modification of Standing Orders. The Appellate
Authority had obligation to draw up the Standing Orders in conformity with the orders passed
in appeal placed before it.

Therefore, in view of the court the order suffered from material omissions in the matters
certified and the application made by the employer under section 11 (2) Of the Act, was wholly
competent."