UNIVERSITY INSTITUTE OF LEGAL STUDIES

PANJAB UNIVERSITY , CHANDIGARH

2021-2022

LABOUR LAW
TOPIC - THE INDUSTRIAL EMPLOYMENT (STANDING
ORDERS) ACT, 1946

SUBMITTED TO:
Dr. VIRENDER NEGI

SUBMITTED BY:
SIMRANJEET KAUR
ROLL NO. 39/18
B.A.LL.B (9th SEM) SECTION-A

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 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Dr. Virender Negi for

providing his able guidance throughout the execution and completion
of this project. I would also like to thank him for providing me with an
opportunity to further explore the topic – ‘THE INDUSTRIAL
EMPLOYMENT (STANDING ORDERS) ACT, 1946’.

I would also like to be thankful to the editors of the online resources

that I have consulted. I would also like to thank my friends for helping
me throughout the completion of project.

-SIMRANJEET KAUR

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 TABLE OF CONTENTS

S. NO. CONTENT PAGE NO.

1 INTRODUCTION 4

2 OBJECTIVE OF THE INDUSTRIAL EMPLOYMENT (STANDING 4-5

ORDERS) ACT, 1946

3 SCOPE AND APPLICATION OF THE INDUSTRIAL 6-7

EMPLOYMENT (STANDING ORDERS) ACT, 1946

4 STANDING ORDERS 7

5 PROCESS OF APPROVAL OF STANDING ORDERS 8-12

6 OTHER PROVISIONS OF THE ACT 12-15

7 REFERENCES 16

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 INTRODUCTION

In an earlier era, India didn’t really have as many laws connected with suitable employment
and labour practices, as it does now. As a result, workers did not have uniformity in their
service conditions as enforced by the standing orders act. This resulted in numerous
disruptions, conflict, and productivity loss between these employees and their managers; this
was particularly evident in industrial undertakings with significant workloads and numerous
staff. Thus the need for laws connected with suitable employment and labour practices was
felt.

There was no uniformity in the conditions of service of workers until The Industrial
Employment (Standing Orders) Act 1946 was brought.The frequent causes of friction between
management and workers in industrial undertaking in India were mainly, due to absence of
clear cut employment condition known to the workers.The demand for statutory service
conditions was first raised by Bombay cotton textile workers in 1927-28.The Bombay
industrial disputes act of 1938 provided, for the first time, for statutory standing orders.

The Labour Committee 1944- 1946 was created and they immediately spotted the key cause of
issues. There was a lack of understanding, on part of the employees, about employment
conditions. This committee maintained that the workers had a right to know all terms and
conditions related to their work and employment. They even demanded a special central law
that mandated employers to create, approve, and make legally binding employment terms and
get them enforceable by law. The Industrial Employment (Standing Orders) Act 1946 lists out
laws governing the contract as devised, duly signed and eventually terminated by either party.

OBJECTIVE OF THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT,

1946

There are three main objective of The Industrial Employment (Standing Orders) Act 1946, as
follow:

 To provide statutory purity and importance to standing orders

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  To maintain proper discipline, harmonious working conditions and achieve higher
productivity by providing satisfactory employment and working conditions. This is to
help minimize the exploitation of workers against their will and knowledge.
 To specify the duties and responsibilities of both the employers and the employees.
Thus it promotes industrial peace and harmony by supporting fair industrial practices.
 This act was enacted to enhance the productivity level and providing a healthy working
environment.

In the case of Barauni Refinery Pragati Sheel Parishad v. Indian Oil Corporation
Ltd.1, it was held that the object of the Act is to have uniform standing orders in respect of
matters enumerated in the Schedule to the Act, applicable to all workers irrespective of
their time of appointment.

It also provides employers the procedure for getting standing orders certified. If they fall
under the Industrial Employment (standing orders) Act, they are expected to register
themselves by giving in five draft copies of those standing orders. The standing orders are
sent to the certifying officers as appointed by the government, such as a regional labour
commissioner for assessment. The assessment and final certification of those standing
orders is successful provided when they have all of the following details.

 Classification of all workers into categories like temporary, probation, permanent, etc.
 The method through which workmen are informed about holidays, working hours.
 Shift working
 Temporary suspensions of work.
 Notice periods and other provisions regarding the termination of employment.
 All actions and inaction that are to be treated as misconduct and consequences for said
faults.
 Grievance redressal procedure in cases of unfair treatment by the employer.
 Attendance system to be followed by all employees.
 Workmen information and records
 The process followed for obtaining an accumulation of leaves, leave encashment
 Employment termination as issued by employer and employees and notice thereof.

1
(1991) 1 SCC 4.

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SCOPE AND APPLICATION OF THE INDUSTRIAL EMPLOYMENT (STANDING
ORDERS) ACT, 1946

Section 1 of Act talks about application of The Industrial Employment (Standing Orders) Act
1946. Section 1 provides that act

 Extends to the whole of India

 Applies to every establishment wherein 100 or more workmen are employed on
any day preceding twelve months
 Once applicable to the establishment then it continuouse even if the number of
workmen employed gets reduced to less than 100 Continuous.
 It applies to Railways, Factories, Mines, Quarries, Oilfields, Tramways, Motor
Services, Docks, Plantations, Workshops, Civil Construction and Maintenance
works.
 It applies to all the skilled or unskilled, manual, supervisory, technical, clerical
work. Continuous.
 It applies to apprentices also.

Where does the Industrial Employment (standing orders) Act not apply ?

The Act does not apply to :

1. Any industry to which provisions of Chapter VII of the Bombay Industrial Relations
Act, 1946, apply; or
2. Any industrial establishment to which provisions of Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 apply.
3. The persons employed mainly in a managerial / administrative / supervisory capacity
drawing wages exceeding Rs.1600 are not covered.
4. Section 13-B of the Act specifically exempt certain industrial establishments from the
purview of the Act, viz., the industrial establishment in so far as the workmen employed
therein are persons to whom the
 Fundamental and Supplementary Rules,
 Civil Services (Classification, Control and Appeal) Rules,
 Civil Service (Temporary Services) Rules,

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  Revised Leave Rules,
 Civil Service Regulations,
 Civilians in Defence Service (Classification, Control and Appeal) Rules,
 Indian Railway Establishment Code, or
 Any other rules or regulations that may be notified in this behalf by the appropriate
Government in the Official Gazette apply.

Power to exempt: Section 14 provides that 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.

Features of The Industrial Employment (standing orders) Act

The Act envisages three important features, they are:

 Concept of Standing Orders;

 Adjudicatory powers of the Certifying Officer; and

 Certified Standing Orders (CSO)to have the force of law.

STANDING ORDERS

Section 2(g) of the Industrial Employment (standing orders) Act states that “standing orders”
are the rules relating to matters set out in the Schedule, i.e. with reference to:

 The classification of workmen;

 Manner of intimation to workers about work and wage-related details;

 Attendance, and conditions of granting leaves, etc.;

 Rights & liabilities of the employer/ workmen in certain circumstances;

 Conditions of ‘termination of’/‘suspension from’ employment; and

 Means of redressal for workmen, or any other matter.

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 PROCESS OF APPROVAL OF STANDING ORDERS

SUBMISSION OF DRAFT STANDING ORDERS:

Section 3 of the Industrial Employment (Standing Orders) Act 1946 imposed a statutory
obligation upon the employers to submit, individually/ jointly, five copies of a ‘Draft Standing
Order’ within six months of its applicability to the industrial establishment, which should be
inclusive of the matters enlisted in the Schedule and of the Model Standing Orders (MSO), if
any, and to which shall be annexed such documents containing particulars of the workmen
employed. The draft Standing Orders shall be accompanied by a statement containing
prescribed particulars of the workmen employed in the industrial establishment including the
name of the trade union, if any, to which they belong. If the industrial establishments are of
similar nature, a group of employers owning those industrial establishments may submit a joint
draft of Standing Orders subject to such conditions as may be prescribed.

In the case of S.K. Sheshadri v H.A.L and Ors 2, 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.

In the case of Hindustan Lever v Workmen 3, 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.

In the case of Management of Continental Construction Ltd. v Workmen of Continental

Construction 4, the employer’s right to terminate the service of a probationer was recognised
by declaring that, if a person is an employee on probation, it is an inherent power of the
employer to terminate during/ at the end of the probationary period, provided, that even while

2
ILR 1983 Kar 634.
3
AIR 1974 SC 17.
4
ILR 2004 KAR 54.

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acting in accordance with the Certified Standing Orders (CSO), the employer’s action be fair
and consistent with the principles of natural justice.

CONDITIONS FOR CERTIFICATION OF STANDING ORDERS:

Section 4 of the Act declares that it shall be the function of the Certifying Officer or appellate
authority to Adjudicate upon the fairness or reasonableness of the provisions of the Standing
Orders. The Act has imposed a duty on the Certifying Officer, to consider the reasonableness
and fairness of the Standing Orders before certifying the same. The Certifying Officer is under
a legal duty to consider that the Standing Orders are in conformity with the Act. If the
Certifying Officer finds that some provisions, as proposed by the employer relate to matters
which are not included in the Schedule, or if he finds some provisions are unreasonable he must
refuse to certify the same. Certification of any such Standing Order would be without
jurisdiction.

The conditions upon the fulfilment of which, a standing order can be certified are as follow:

 Deviation from Model Standing Orders- Section 4(b) when read with Section 3(2) of the
Act, requires the draft standing order to, as far as practicable, be in conformity with the
Model Standing Orders (MSO), hence, in cases where it cannot be so claimed, the
appropriate authority may permit deviation from the MSO, and negate the addition of
such impracticable provision in the Standing Order.
 Reasonableness of Standing Order- The proviso to Section 4 of the Act, as amended by
Amendment Act of 1956, necessitates the Certifying Officer or appellate authority to
adjudicate upon the fairness or reasonableness of the contents of such Draft Standing
Order in order to proceed with its certification.
 Matters not covered by the Schedule- The Act contemplates by itself that the Standing
Orders must cover matters included in the Schedule initially, and those which may be
added to the Schedule by the appropriate Government in exercise of the authority
conferred on it under Section 15. Any other provisions of such kind may be made if so
certified by the Certifying Officer to be fair and reasonable under Section 4 of the Act.
 Different set of Standing Orders- “Once the standing orders are certified, they constitute
the conditions of the service binding upon the management and the employees serving
already and in employment or who may be employed after certification.” This implies
that different set of standing orders cannot exist in respect of distinct sections of workmen
or the employers, for that would frustrate the intent of the legislature by rendering the

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 conditions of employment as indefinite & diversified, just as existed prior to the
enactment of the said Act.

In the case of Air Gases Mazdoor Sangh, Varanasi v. Indian Air Gases Ltd. 5,it was
observed that the Certifying Officer has a mandatory duty to discharge and he acts in a quasi-
judicial manner. Where a matter is not included in the Schedule and the concerned appropriate
Government has not added any such item to the Schedule, neither the employer has a right to
frame a Standing Order enabling him to transfer his employees nor does the Certifying Officer
have jurisdiction to certify the same. The consent of the employees to such standing orders
would not make any difference.

CERTIFICATION PROCESS

Section 5 of the Act prescribe threefold procedure for certification of Standing Order:

 On receipt of the draft Standing Order from the employer, the Certifying Officer to send
a copy of the Draft Standing Order to the workmen or trade union, along with a notice
calling for objections, that shall be submitted to him within 15 days of receiving such
notice.

 Upon receipt of such objections, the employer and workmen to be given an opportunity
of being heard, after which the Certifying Officer shall decide and pass an order for
modification of the Standing Order.

 Finally, the Certifying Officer shall certify such Standing Order, and thereby, within
seven days, send a copy of it annexed with his order for modification passed under
Section 5(2).

EFFECT OF CERTIFICATION

The Act is a special law in regard to matters enumerated in the Schedule and the regulations
made by the employer with respect to any of those matters. These are of no effect unless
such regulations are notified by the Government under Section 13B or certified by the
Certifying Officer under Section 5 of the Act.

5
(1977) IILLJ 503 All.

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 REGISTRATION OF STANDING ORDERS

Section 8 of the act provides Certifying Officer has to file a copy of all the Standing Orders
as certified by him in a register maintained for the purpose in the prescribed form. He shall
furnish a copy of the same to any person applying there for on payment of the prescribed
fee.

APPEALS

Section 6 provides that Order of the Certifying Officer can be challenged by any employer,
workman, trade union or any other prescribed representatives of the workmen. This implies any
related party aggrieved by the order of the Certifying Officer may appeal to the ‘appellate
authority’ within 30 days, provided that its decision, of confirming such Standing Order or
amending it, shall be final. The appellate authority shall thereafter send copies of the Standing
Order, if amended, to the related parties within seven days.

In the case of Khadi Gram Udyog Sangh v. Jit Ram 6, it was observed that the appellate
authority has no power to set aside the order of Certifying Officer. It can confirm or amend
the Standing Orders. The appellate authority can not remand the matter for fresh
consideration.

DATE OF OPERATION OF STANDING ORDERS

Section 7of the act provides that Standing Orders shall come into operation on the expiry of
30 days from the date on which the authenticated copies are sent to employer and workers
representatives or where an appeal has been preferred, they will become effective on the
expiry of 7 days from the date on which copies of the order of the appellate authority are sent
to employer and workers representatives.

POSTING OF STANDING ORDERS

Section 9 of the act provides that Standing order should be displayed in English and local
language on special Notice Board at or near entrance of the establishment.

MODIFICATION OF STANDING ORDERS

Section 10 provides employers are prohibited to modify the Standing Orders once they are
certified under this Act except on agreement between the employer and the workmen or a

6
(1975) IILLJ 413 P H.

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 trade union or other representative body of the workmen. Further, subject to Section 10(1)
and other provisions of this Act, the parties may apply to the Certifying Officer for
modifications in the standing order by annexing five copies of the proposal or a certified copy
of the agreement for modifications.Such modification will not be affected until the expiry of
6 months from the date on which the Standing Orders were last modified or certified as the
case may be. Section 10(2) does not contain any time limit for making modification
application by employee.

In the case of Indian Express Employees Union v. Indian Express (Madurai) Ltd. 7, it
was observed that the workmen are entitled to apply for modification of the Standing Orders
at any time.

DISCIPLINARY ACTION

The most important use of standing order is in the case of disciplinary action. A workman can
be punished only if the act committed by him is misconduct as defined under the standing
orders. Model standing orders contain such acts like insubordination (rebel), disobedience,
fraud, dishonesty, damage to employers' property, taking bribe, habitual absence or habitual
late attendance, habitual neglect of work, strike in contravention of law etc as misconduct.
The certified standing orders may cover other acts as misconduct, if approved by Certifying
Officer.

TEMPORARY APPLICATION OF MODEL STANDING ORDERS

Section 12-A provides that until the standing orders are certified, Model Standing Orders
prepared by the Government shall automatically apply. In case where there are no certified
Standing Orders applicable to an industrial establishment, the prescribed Model Standing
Orders shall be deemed to be adopted and applicable.

In the case of Indian Iron and Steel Co. Ltd. v. Ninth Industrial Tribunal 8, it was
observed that where there are two categories of workers, daily rated and monthly rated but

7
(1999) ILLJ 490 Ker.
8
2000 (87) FLR 314.

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 the certified Standing Orders are in respect of daily rated workmen only, then Model Standing
Orders can be applied to monthly rated workmen. Once the standing orders are specified, they
supersede any "terms and conditions of employment contained in the employment letter.

Payment of subsistence allowance

Section 10 A was inserted by the Amendment Act of 1982. Section 10 A provides that where
any workman is suspended by the employer pending investigation or inquiry into complaints
or charges of misconduct against him, the employer shall pay to such a workman the
subsistence allowance

 At the rate of 50% of the wages which the workman was entitled to immediately
preceding the date of such suspension, for the first 90 days of suspension: and
 At the rate of 75% of such wages for the remaining period of suspension if the delay
in the completion of disciplinary proceedings against such workman is not directly
attributable to the conduct of such workman.
 Any dispute regarding subsistence allowance may be referred by the workman or the
employer, to the Labour Court constituted under the Industrial Disputes Act, 1947.
 However, if the provisions relating to payment of subsistence allowance under any
other law for the time being in force are more beneficial, then the provisions of such
other law shall be applicable.

In the Case of BPCL v. Petroleum Employees Union 9, it was held that right to get the
subsistence allowance during the period of suspension is an unconditional right and it cannot
be affected by requiring the suspended workman to mark his attendance to get the subsistence
allowance.

PENALTIES AND PROCEDURE

Section 13 of the Act makes it a penal offence in case of a violation of Section 3 or 10 of the
Act by the employer, by imposing a fine of Rs. 5000 and an additional Rs. 200 per day for a
continuing offence. Further, in case of an infringement of the Certified Standing Order , a
fine of Rs. 100 and an additional of Rs. 25 per day for a continuing offence. The Section

9
W.P.No.17450 of 2011.

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declares that no prosecution shall be instituted under it except on prior approval by the
appropriate Government, and whence instituted, be tried only by such Courts not inferior to
the Metropolitan/Judicial Magistrate of Second Class.

INTERPRETATIONS OF STANDING ORDERS

Section 13-A provides that any question relating to application or interpretation of a Standing
Order certified under this Act, can be referred to any Labour Court constituted under the
Industrial Disputes Act, 1947 by any employer or workman or a trade union or other
representative body of the workmen. The Labour Court, to which the question is so referred,
shall decide it after giving the parties an opportunity of being heard. Such decision shall be
final and binding on the parties.

POWER TO MAKE RULES

Section 15 of 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 Model Standing Orders;

 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 that the rules made by the Central Government be passed/annulled through each
House of Parliament without prejudice to the validity of anything done under it.

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 STANDING ORDERS ACT- AMENDMENT

 “Fixed Term Employment” has now been introduced irrespective of the industry of
work.
 The amendment also directs that no employer of an industrial establishment shall
convert the posts of the permanent workmen existing in his industrial establishment on
the date of commencement of the Industrial Employment (Standing Orders) Central
(Amendment) Rules, 2018 as fixed term employment thereafter.
 The hours of work, wages, allowances shall not be less than that of permanent workman
and all statutory benefits available to a permanent workman proportionately according
to the period of service rendered by him even if his period of employment does not
extend to the qualifying period of employment required in the statute.

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 REFERENCES

BOOKS
 S.N. Misra, Labour & Industrial Laws, Central Law Publications,
Allahabad, 25th ed (2010).
 Meenu Paul ,Labour and Industrial Laws, Allahabad Law Agency,
Faridabad.

WEBSITES
 All about INDUSTRIAL EMPLOYMENT (STANDING ORDER) ACT,
1946, LexForti Legal News Network, accessed at
https://lexforti.com/legal-news/all-about-industrial-employment-standing-
order-act-1946/
 Yamini Jain, The Industrial Employment (Standing Orders) Act, 1946,
ipleaders, accessed at https://blog.ipleaders.in/industrial-employment-
standing-orders-act-1946/
 www.manupatra.com
 www.scconline.com

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