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THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS)

ACT, 1946

OBJECT AND SCOPE1

The Industrial Employment (Standing Orders) Act, 1946 consists of 15 sections. The
objective of the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to
as the Act) is to require the employers to define with sufficient precision the conditions of
employment under them and the said conditions known to the workmen employed by
them.2
Prior to the enactment of the Industrial Employment (Standing Orders) Act, 1946, the
conditions of employment in the industrial establishments were governed by contracts
between employer and his workmen without the interference of the State. Non-interference
by the State caused the employers to lay down the conditions of the employment of their
choice- The conditions laid down by the employer promoted the interests of the employer but
ignored the interests of the workmen.
In many cases the conditions of employment were not reduced to writing and were governed
by oral agreements. Thus, the conditions of employment in many cases were not well defined
prior to the enactment of the Industrial Employment (Standing Orders) Act, 1946.
The Supreme Court in M/s. Glaxo Laboratories (I) Ltd. v. Presiding Officer, Labour
Court3, made the following observation:
"Moving from the days when whims of the employer were supreme, the Industrial
Employment Act, 1946 took a modest step to compel by statute the employer to
prescribe minimum conditions of service subject to which employment is given."

1 http://labour.bih.nic.in/Acts/industrial_employment_standing_orders_act_1946.pdf
2 The Preamble to the Industrial Employment (Standing Orders) Act, 1946.
3 AIR 1984 SC 505.

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Whereas in Sudhir Chandra v. Tata Iron and Steel Co. Ltd.4, the Supreme Court made the
following observation:
The Industrial Employment Act is a legislative approach to the laissez-faire rule of
hire and fire at sweet will It is an attempt at imposing a statutory contract of service
between two parties unequal to negotiate, on the equal footing."

WHAT ARE STANDING ORDERS

Standing Orders means rules of conduct for workmen employed in industrial
establishments. Standing orders means rules relating to matters set out in the schedule to the
Act. [Section 2(g)]. The schedule to the Act requires that following should be specified in
Standing Orders(a) classification of workmen i.e. temporary, badli, casual, permanent, skilled etc.
(b) manner of intimating to workmen working hours, shift working, transfers etc.
(c) Holidays
(d) Attendance and late coming rules
(e) Leave rules
(f) Leave eligibility and leave conditions
(g) Closing and reopening of sections of industrial establishment
(h) termination of employment, suspension, dismissal etc. for misconduct and acts or
omissions which constitute misconduct
(i) Retirement age
(j) Means of redressal of workmen against unfair treatment or wrongful exactions by
employer
(k) Any other matter that may be prescribed5.
The Industrial Employment (Standing Order) Act, 1946 aims at ensuring well defined, fair
and reasonable conditions of employment For this, the Act provides for the Schedule which
specifies the matters with respect to the Conditions of employment The Act requires the
employer to make rules relating to matters set out in the .Schedule. The rules relating to
4 1984 Lab IC 790 (SC).
5 http://www.citehr.com/20172-standing-orders-factories-act.html

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matters of conditions of employment set out in the Schedule are termed as Standing Orders
under the Act.
The Industrial Employment (Standing Orders) Act, I946 makes provision for the certifying
officer who adjudicates upon the fairness and reasonableness of the Standing Orders drafted
by the employers. The Standing Orders are certified by the certifying officer under the Act.
The certified Standing Orders make the terms and conditions of employment well settled in
writing and known to the employees before they accept the employment.
In Bagalkot Cement Co. v. R.K. Pathan6, the Supreme Court held as follows:
The object of the Industrial Employment (Standing Orders) Act, 1946 requires the
employers to make the conditions of employment precise and definite. The Act
ultimately intends to prescribe these conditions in the form of Standing Orders so that
what used to be governed by a contract thereto before will now be governed by the
statutory Standing Orders."
The Industrial Employment (Standing Orders) Act, 1946 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.7
In Bharat Petroleum Corporation Ltd. v. Maharashtra General Kamgar Union8, explaining
the object of Industrial Employment (Standing Orders) Act, 1946, the Supreme Court held as
follows:
"The Industrial Employment (Standing Orders) Act, 1946 was made by the
Parliament to require employers of all industrial establishments to define formally
the conditions of employment on which the workmen would be engaged. The object
underlying the Act, which is a beneficent piece of legislation is to introduce
uniformity of terms and conditions of employment in respect of workmen belonging
6 AIR 1963 SC 439.
7 Salim Erode Electricity Distribution Company (Pvt.) Ltd. Vs Employees Union, AIR 1966 SC 808.
8 1999 Lab IC 430 SC.

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to the same category and discharging the same and similar work under the
industrial establishment and to make the terms and conditions of industrial
employees well settled and known to the employees before they accept employment."
Holding industrial peace also as one of the objectives of the industrial Employment
(Standing Orders) Act, the Supreme Court in Management, Shahdara (Delhi) Saharanpur
v. S.S. Railway Workers Union9, made the following observation:
"Object of Act is to require employers to define with certainty 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."

EXTENT AND APPLICATION OF THE INDUSTRIAL EMPLOYMENT

(STANDING ORDERS) ACT, 194610
EXTENT OF THE ACT [SEC 1 (2)]
According to Sec. 1 (2), the Act extends to the whole of India except the State of Jammu and
Kashmir.
APPLICATION OF THE ACT. [SEC. 1 (3)]
According to Sec. 1 (3), the Act applies:
(i)

to every industrial establishment wherein one hundred or more workmen are

employed or were employed on any day of the preceding twelve months; and

(ii)

to any industrial establishment employing less than one hundred workmen if the
appropriate Government issues notification to this effect under Sec. 1 (3).

Sub -section (3) of section 1 reads as under:

It applies to every industrial establishment wherein one hundred or more workmen are
employed or were employed on any day of the preceding twelve months:

9 AIR 1969 SC 513.

10 http://industrialemploymentact1946.blogspot.in/

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Provided that the appropriate Government may, after giving not less than two months' notice
of its intention so to do by notification ; in the official Gazette apply the provisions of this
Act to any industrial establishment employing such number of persons less than one hundred
as may be specified in the notification.
Whereas the Industrial Employment (Standing Orders) Act 1946 defines "appropriate
Government", "industrial establishment" and "workman" as under:

INDUSTRIAL ESTABLISHMENTS TO WHICH THE INDUSTRIAL

EMPLOYMENT (STANDING ORDERS) ACT, 1946 DOES NOT
APPLY11 ]SECS. 1 (4), 13-B]
Following are the industrial establishments to which the Act does not apply
I.

According to sec. 1 (4), nothing in this Act applies to

(i)

any industry to which the provisions of chapter VII of the Bombay

Industrial Act, 1946 apply; or

(ii)

any industrial relations establishment to which the provisions of the

Madhya Pradesh Industrial Employment (Standing Orders) 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.
II.

According to sec. 13-B, nothing in this Act shall apply to an industrial

establishment in so far as the workmen employed therein are persons to whom

(i)

the fundamental and supplementary rules;

(ii)

Civil Services (Classification, control and appeal) Rules,

(iii)

Civil Services (Temporary service) Rules,

(iv)

Reserved Leave Rules,

(v)

Civil services regulations,

11 http://llbanswers.blogspot.in/2013/01/industrial-employment-standing-orders.html

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(vi)

Civilians in Defence classification control and appeal service Rules of

the Indian Railway Establishment code, or

(vii)

any other rules or regulations that may be notified in this behalf by live
appropriate Government in the official Gazette apply.

EXEMPTION

FROM

THE

APPLICATION

OF

INDUSTRIAL

EMPLOYMENT ACT
According to Sec. 14, the appropriate Government may exempt any industrial establishment
or class of establishments from all or any of the provisions of the Act. Sec. 14 is as follows:
The appropriate Government may, by notification in the official Gazette, exempt,
conditionally or unconditionally, any industrial establishment or class of industrial
establishments from all or any of the provisions of this Act.

AUTHORITIES UNDER THE ACT AND THEIR POWERS

There are two types of authorities under the Act:
(1) CERTIFYING AUTHORITY
According to 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.
The certifying officer adjudicates upon the fairness and reasonableness of the draft
Standing Orders (Section 4).
According to Section 11: Every Certifying Officer shall have all the powers of a
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,

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Clerical or arithmetical mistakes in any order passed by a Certifying officer or errors
arising therein from any accidental slip or omission may, at any time, be corrected by
that Officer or the successor in office of such officer or authority, as the case may be.

(2) APPELLATE AUTHORITY

According to Section 2(a) "appellate authority" means an authority appointed by the
appropriate Government by notification in the Official Gazette to exercise in such
area as may be specified in the notification the functions of an appellate authority
under this Act.
Any order passed by the Certifying Officer can be challenged to the Appellate
Authority who shall further investigate into the fairness and reasonableness of the
provisions of any standing order.
According to Section 11: Every Appellate authority shall have all the powers of a
Civil Court for the purposes of:
(e) receiving evidence,
(f) administering oaths,
(g) enforcing the attendance of witnesses, and
(h) compelling the discovery and production of documents,
Clerical or arithmetical mistakes in any order passed by the Appellate Authority or
errors arising therein from any accidental slip or omission may, at any time, be
corrected by that Authority or the successor in office of such officer or authority, as
the case may be.

MAIN FEATURES OF THE ACT

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Following are the main features of the Industrial Employment (Standing Orders) Act, 1946:
1. Employers to draft standing orders.
2. Certifying officer to certify the draft standing orders.
3. Duration and modification of certified standing orders.
4. Penalties
EMPLOYERS TO DRAFT STANDING ORDERS [SECTION 3]
Standing Orders are the terms and conditions of employment on which the workmen are
employed by the employer. The Act requires the employers to draft standing orders for their
industrial establishments. Drafting of standing orders is compulsory for the employers who
employ or have employed one hundred or more workmen on any day of the preceding twelve
months.
The essential requirements of Section 3 are:
(1) Employer shall submit 5 copies of the draft Standing Order to the Certifying Officer.
(2) Copies shall be submitted within 6 months from the date on which the Act becomes
applicable to the Industrial Establishment.
(3) Provision shall be made in such draft for every matter set out in the Schedule.
CERTIFYING OFFICER TO CERTIFY THE DRAFT STANDING ORDERS [S. 5]
The Act makes provision for the certifying officer. Certifying officer is appointed by the
appropriate Government. The certifying officer certifies the draft standing orders submitted to
him by the employers. The certifying officer adjudicates upon the fairness and reasonableness
of the draft Standing Orders. The certifying officer may refuse to certify the draft Standing
Orders if the conditions of employment in the draft Standing Orders do not include any of the
matters specified in the Schedule of the Industrial Employment (Standing Orders) Act, 1946.
Essentials of Section 5 are:
(1) The Certifying Officer shall forward a copy thereof to the trade union or the
workmen, whichever the case may be.
(2) Copy is to be accompanied by a notice requiring objections, if any, which the
workmen may desire to make to the draft standing orders to be submitted to him
within fifteen days from the receipt of the notice.

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(3) After giving an opportunity of being heard to both the parties, the Certifying Officer
shall decide whether or not any modification of or addition to the draft submitted by
the employer is necessary and shall make an order in writing accordingly.
(4) The Certifying Officer shall thereupon certify the draft standing orders, shall within
seven days thereafter send copies of the certified standing orders to the employer and
to the trade union or other prescribed representatives of the workmen.

DURATION AND MODIFICATION OF CERTIFIED STANDING ORDERS

Section 7 provides that, Standing orders shall, unless an appeal is preferred under Section
6, come into operation on the expiry of thirty days from the date on which authenticated
copies thereof are sent under sub-section (3) of Section 5, or where an appeal as aforesaid is
preferred, on the expiry of seven days from the date on which copies of the order of the
appellate authority are sent under sub-section (2) of Section 6.
The certified standing orders are ordinarily not subject to modification within six months of
their certification. (Section 10)
Procedure for Modification of Standing Orders12:
(a) The Standing Orders finally certified under the Act, cannot be modified before six months
from the date of operation of last modification.
(b) The application for modification of the Standing Orders should be accompanied with five
copies of the modifications proposed to be made.
(c) If the employer and the workmen have agreed to the proposed modification to the
Standing Orders a copy of such agreement should be enclosed.
(d) Any modification of the Standing Order shall be certified in the same manner as the first
standing orders.

12 http://www.shareyouressays.com/91801/essay-on-the-industrial-employment-act-1946-in-india

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PENALTIES AND PROCEDURE13 (SECTION 13)

(1) An employer who fails to submit draft standing orders as required by Section 3 or
who modifies his standing orders otherwise than in accordance with Section 10, shall
be punishable with fine which may extend to five thousand rupees, and in the case of
a continuing offence with a further fine which may extend to two hundred 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 extend to one hundred rupees, and in the case of a continuing offence with a
further fine which may extend to twenty-five rupees for every day after the first
during which the offence continues.
(3) No prosecution for an offence punishable under this section shall be instituted except
with the previous sanction of the appropriate Government.
(4) No Court inferior to that of [a Metropolitan or Judicial Magistrate of the second class]
shall try any offence under this section.
(5)

OTHER PROVISIONS
(1)SECTION 8: 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 maintained for the purpose, and
the Certifying Officer shall furnish a copy there of to any person applying there for on
payment of the prescribed fee.

(2) SECTION 9: POSTING OF STANDING ORDERS

The text of the standing orders as finally certified under this Act shall be prominently
posted by the employer in English and in the language understood by the majority of
his workmen on special boards to be maintained for the purpose at or near the
entrance through which the majority of the workmen enter the industrial
establishment and in all departments thereof where the workmen are employed.

13 http://labour.bih.nic.in/Acts/industrial_employment_standing_orders_act_1946.pdf