1. North Brook Jute Co.

Their Workmen

The Works committee is not intended to supplant or supersede unions and cannot take
important decisions such as alteration of terms of service /Can only comment on
common interests and day to day working - (This is my observation- Could the Works
Committee really be called a collective bargaining mechanism???)/ This was also a
violation of Section 33 since a reference to an industrial tribunal was pending.

2. Firestone Tyre and Rubber Co. v The Management

This case deals with the powers of the labour courts, tribunals and national tribunals to
give appropriate relief in case of discharge of workmen under Section 11 A of the
Industrial Disputes Act. More particularly, the case deals with the proviso to Section 11 A
which says that the labour court, tribunal or national tribunal will rely only on the
materials on record and not take any fresh evidence in relation to the matter. The
endeavour of the Supreme Court was to provide a holistic interpretation of the provision
as a whole.

The position before the introduction of Section 11 A through an amendment in 1971 was
that a labour court or tribunal could not sit as a court of appeal and decide upon the
discharge or dismissal of a workman unless there had been a gross injustice or violation
of due process. However, the ILO recommended an appellate process and therefore,
Section 11 A , though not strictly an appellate mechanism was introduced.

With this background the following was the ruling of the Court (including an interpretation
of the proviso)-

The Court glanced at jurisprudence up to 1971 and came to the conclusion that till the
amendment, judicial opinion was in favour of allowing en employer or a worker to adduce
fresh evidence before a tribunal, even if a domestic enquiry was not conducted properly
or was defective. The reason for this opinion is that the enquiry conducted by the tribunal
is a composite enquiry which does not only enquire into the validity of the domestic
enquiry but the very action of the worker. Therefore, one cannot argue that because a
domestic enquiry was defective or not conducted, a worker could be automatically
reinstated. (Para 32)

Therefore , the question which comes up here is whether, Section 11-A has made any
changes to the position mentioned above .

This was the reasoning of the Court-

The Tribunal is now clothed with the power to reappraise evidence in the domestic
enquiry and satisfy itself. The tribunal can not only decide if the finding made out by an
employer is correct but also differ from the said finding if a proper case is made out.
Even if no enquiry has been held by the employer or the enquiry is defective, it is open to
the employer to adduce relevant evidence for the first time before the tribunal to justify
the order of dismissal or discharge .
Likewise, even the workers can adduce evidence for the first time
Whether evidence has been produced for the first time or not, or whether a domestic
enquiry has been held or not, it is the satisfaction of the tribunal that matters and it has
to come to a conclusion. Section 11-A gives full power to tribunals to go into evidence.
Power of Tribunal to alter the punishment imposed by an employer- The Tribunal can
reduce or change the punishment after weighing the evidence before it. This may be on
the basis of only the domestic enquiry or fresh evidence being taken into account.
Meaning of "Materials on Record" in the proviso-This is not limited only to material
produced before the domestic enquiry but further evidence placed before the tribunal
and material adduced for the first time in relation to that particular dispute.
"Fresh Evidence" relates to the material on record . The Tribunal cannot call for fresh
evidence as an appellate tribunal may do
The section is prospective in nature .

3. Gujarat Steel Tubes Ltd v Gujarat Steel Tubes Mazdoor Sabha

Standing orders terminating workmen need to be examined in order to investigate

whether the standing orders are punitive or not. If the orders are punitive in nature , then
reasons have to be given and workmen cannot be dismissed without notice as on may do
in cases of misconduct such as inciting, organising, participating or abetting an illegal
strike. In this case, though the strike was held to be illegal the court lifted the veil and
examined the real reason for dismissal of the workmen. A high Court does most certainly
have the power under Article 226 to enquire into decision of the arbitrator. The court held
that the arbitrator can bind even those who are not party to the dispute ( example being
workmen not directly party to the dispute ) and therefore the arbitrator is a part of the
infrastructure of the sovereign's dispensation of justice , thus falling within the rainbow
of statutory tribunals amendable to judicial review. (This is a very interesting aspect-
perhaps in labour disputes equating a private arbitrator to a public authority).The
arbitrator should have dealt with each dispute individually and falls under the definition
of Tribunal in Section 11 A.(Related to the point above). Thus justifying writ jurisdiction.

4. Indian Railway Construction Company v Ajay Kumar

Court cannot interfere with decision of internal enquiry if there was no impropriety

5. Sirsilk v Government of AP

Publication of Award is Mandatory and not directory

6. 6. Remington Rand v Their Workmen

Publication of Award is Mandatory and not directory

 7. 7. Dena Bank v Kirtikumar Patel

This case deals with the expression "full wages last drawn" under Section 17 B of the
Industrial Disputes Act. "Full Wages Last Drawn" are given their plain and literal meaning
. These wages are in the nature of subsistence wages and do not mean wages as on the
present date. HC or SC may order a higher quantum of wages in the interest of justice.

8. 8. Dena Bank v Ghanshyam

Here, the workman was awarded wages under Section 17 B at the present pay scale and
not under “full wages last drawn”. The Court did not refer to 17 B in its order. It was held
that should the appellant company succeed the worker would have to return to the
company any excess amount received.

9. 9. Hombe Gowda Educational Trust v State of Karnataka

Court cannot protect interest of workmen alone

/ Employees cannot be allowed to break rules with impunity/ Discretionary jurisdiction to
interfere with quantum of punishment is only be exercised when it is found that no
reasonable person will inflict such punishment.

10. 10. Scooters India Ltd v Labour Court

Even if the labour court finds that the internal enquiry was proper and followed the
principles of natural justice, it can interfere with the order of termination of service if it
deems fit.

11. 11. J.K. Synthetics v KP Agarwal

(This judgment is very important from the point of view of understanding how Section 11
A works in practice )

The main question which arose in this case was as follows-

When the punishment of dismissal is substituted with a lesser punishment, i.e stoppage
of increments for two years and consequently the employee is directed to be reinstated,
whether the employee is entitled to back wages from the date of termination to the date
of reinstatement. The power to correct an award under Section 6 (6) of the IDA does not
extend to merits. Therefore if the original award did not contain back wages, then the
corrected award cannot contain backwages.
\
This is what the court held-

Back wages are not an automatic consequence of reinstatement

Back wages are the discretion of the Court
Any income received by the employee during this period is to be taken into account
By ordering reinstatement, the court or tribunal is not ruling that the employer was wrong.
The Court is merely exercising its discretion to award a lesser punishment
When punishment is reduced as being excessive, there can be a direction for
reinstatement or nominal lump sum payment.
Reinstatement can be retrospective or prospective
Where misconduct is affirmed, reinstatement cannot be automatic and if directed,
cannot be automatically retrospective from the date of termination
Therefore backwages and other benefits do not automatically follow- this may amount to
rewarding the employee
In this cases, the denial of increment was held to be prospective .
The Court also held that there was no need for the labour court to interfere with the
decision of internal enquiry since the charge was serious.
Also please note the important the Court made about changing its approach towards
labour issues in light of market economy

12. 12. Management of Needle Industries v Labour Court

The government can refer an industrial dispute for resolution even without the
management or the workman specifically asking for a reference. Even where the
workman does not specifically ask for reinstatement or make a demand of the
management, there arises an industrial dispute.

13. 13. General Manager , Security Paper Mill v R.S Sharma

Where a settlement between management and a union on behalf of all the workers
arrived at in the course of conciliation proceedings , a subsequent settlement entered
into between management and another union not representing all the workers would not
be binding on those who were not parties thereto and not members of that union, in the
absence of a notice under S. 19 (2) terminating the earlier settlement.

14. 14. State of Madras v. C.P. Sarathy

A Court cannot examine the order of reference closely to see if there was any material
before the government to support its conclusion, as if the determination of the
government were a judicial or a quasi judicial determination. The determination of the
government is administrative in nature and the expediency of making a reference are
matters entirely for the government. Moreover, the government, in public interest, may
have to refer a dispute to prevent a strike or lockout. Moreover, it is not necessary that the
exact nature or details of the dispute be particularised. It is enough that there is a dispute.

15. 15. State of Bombay v. K. P. Krishnan

This judgment expands upon the previous decision, but please note, does not overrule it.
This case says that an order passed by the government under Section 12 (5) may be an
administrative order and the reasons recorded by it may not be justiciable in the sense
that their propriety, adequacy or satisfactory character may not be open to judicial
scrutiny. However, if a Court is satisfied that the reasons given by the government for
refusing to make a reference are extraneous and not germane then the Court can issue a
writ of mandamus.
Another important point discussed by the Court is that a reference under S. 12 (5) is a
reference under S. 10, since the government will not have the power to prohibit a strike or
lockout under S. 12 (5). Therefore the power under S. 12 (5) is a reference to S. 10

16. 16. Karnal Leather Karamchari Sanghatan v Liberty Footwear

The Publication of an arbitration agreement under S. 10(3A) of the IDA by the government
is mandatory. However the period of one month is directory. However, the award must be
published within a reasonable time.

17. 17.Avon Services Production Agencies (P) Ltd. V Industrial Tribunal Haryana
The government can can change its mind and refer a dispute after initially refusing to refer
it. Merely because the government rejects an initial request for reference, it cannot be
said that the industrial dispute has ceased to exist. The dispute may continue to exist and
if the government is of the opinion that it is expedient to refer the dispute, it may do so.

The SC also ruled that the language or format in which the demand was couched is hardly
decisive of the matter.

Also, retrenchment under S. 25 F cannot be disguised under S. 25 FFF.

18. 18. Rohtas Industries Ltd v. Rohtas Industries Staff

Though this judgment is not in the syllabus, it is important for the following reasons

· Even if a strike is illegal, workers do not have to compensate the management for
the loss of industrial productivity. Neither is there any such obligation enshrined in the
Industrial Disputes Act.
· Indian Courts cannot always rely upon the principles of common law and equity in
relation to labour law developed by English Courts since circumstances between the two
societies differ.
· An appeal can lie under Art. 226 from the decision of arbitrator under Section 10A.
An arbitrator under Section 10A falls within the rainbow of statutory tribunals amendable
to judicial review.

19. 19. Secretary, Indian Tea Association v Ajit Kumar Barat and Others
Echoed CP Sarathy to the limited extent based on the facts here that the respondent was
not a workman. However, this case also raises the question of whether if a workman
performs administrative or managerial tasks, he is excluded from the purview of the IDA.

20. 20.ndian Overseas Bank, Anna Salai v P. Ganesan and Delhi and Cloth and
General Mills-

Criminal proceedings and an internal enquiry can carry on simultaneously unless the
criminal proceedings involve a grave nature and complicated questions of law and fact.
The standard of proof and objectives of both sets of proceedings is different and internal
proceedings may deal with some matter beyond the scope of criminal proceedings.
 21. 21.Cox and Kings v Their Workmen-

If a reference on a dispute by the government to an industrial tribunal does not adjudicate

the matter on merits, then a second reference within a period of one year is valid. If the
decision on the first reference does not “adjudicate” the dispute, then it is not an award
under the IDA.

22. 22.Management of Hotel Imperial, New Delhi v. Hotel Workers Union-

The ordinary law of Master and Servant is modified by virtue of S. 33 of the IDA. While
there is no power to suspend unless there is an express clause to that effect, an employee
can suspend a worker pending confirmation of dismissal under S. 33 of the IDA. This is
the case even if there is no express power to suspend. Industrial law is not bound by the
same limitations as commercial law, in order to protect industrial peace or legitimize
trade union activities. However, this judgment also ruled that workers are not entitled to
a subsistence allowance during the period of suspension.

23. 23. Fakirbhai Fulabhai Solanki v Presiding Officer and Ram Lakhan v Presiding
Officer

Overruled the Hotel Imperial Judgment to the extent that subsistence allowance must be
paid to workers during the period of suspension pending confirmation of dismissal under
S. 33. If the dismissal is not accepted by the tribunal, worker will be reinstated with back
wages or any amount decided by the tribunal. Not paying a subsistence allowance will
vitiate the proceedings since it will be difficult for a worker to defend himself.

24. Managing Director, ECIL, Hyderabad v B . Karunakar and Ors. – This judgment
revolved around an amendment to Article 311 of the Constitution in 1976. The
amendment states that after an internal enquiry has been conducted by one
authority and a penalty imposed by another authority, it shall not be necessary to
give the person any opportunity of making representation on the penalty
proposed.
Therefore the question arose that where the enquiry authorities and the penalty
authorities are different, whether the employee accused of misconduct has the right to
defend himself on the penalty proposed.
The Court held as follows:
When the enquiry officer is not the disciplinary authority, the delinquent employee has a
right to receive a copy of the enquiry officer’s report before the disciplinary authority
arrives at its conclusions with regard to the guilt or innocence of the employee with regard
to the charges levelled against him. This is a part of natural justice.
The Court also held that, by virtue of the 42nd amendment, what is dispensed with is the
opportunity of making representation on the penalty proposed and not of the opportunity
of making representation on the report of the enquiry officer. Therefore, the employee can
still make a representation on the proposed penalty before the disciplinary officer arrives
at a conclusion on the innocence or guilt of the employee on the basis of the enquiry
officer’s report.
 25. Rajasthan State Road Transport Corporation and Ors. V Deen Dayal Sharma-
For an infringement of standing orders, the civil court’s jurisdiction is barred unless the
suit is based on a violation of the principles of common law or constitutional provisions
or other grounds. Otherwise, the jurisdiction of the labour court will prevail.

26. Tata Oil Mills v Workmen-

The relevant standing orders provided that the term “misconduct” shall be deemed to
mean and include, inter alia, drunkenness, fighting , riotous or disorderly or indecent
behaviour within or without the factory . In this case, the assault took place at a
considerable distance from the factory, but was because of a conflict over the incentive
bonus scheme. The court held that the assault was a violation of the standing orders.

27. Bharat Petroleum Corporation Ltd. V Maharashtra General Kamgar Union and
Ors. – The limitation of the right to representation of a delinquent is justified. The
right to representation is available to the delinquent only to extent specifically
provided in the service rules . The provision in the draft standing orders that the
workman was only permitted to be represented by a fellow workman of the same
establishment was neither unreasonable nor unfair and was in consonance with
the model standing orders which permitted representation of the delinquent by
the member of the union of which the delinquent was a member.

28. Associated Cement Companies Ltd. V Workmen and Anr-

Case based primarily on whether internal enquiry was conducted properly. (Please read
judgment).

29. Rohtak and Hissar Districts Electric Supply Co. Ltd v. State of UP-
The following points to be noted

· When the employees have not formed a proper union shows that they are not
organised enough, therefore their consent cannot have a decisive significance in
certification proceedings.
· Whether standing orders should include both gratuity and PF would depend on the
financial capacity of the employer.

30. Board of Trustees of the Port of Bombay v Dilipkumar Nadkarni-

If the presenting officer appointed by the disciplinary authority is a legal practitioner, then
the employee also has the right to be represented by a lawyer.

31. Management , Shahdara v. S.S. Railway Workers Union-

Modification of Standing Orders- Case based primarily on facts. (Please read judgment
including the objective of the 1956 amendment to the Act). Standing orders must be fair
and reasonable.

32. Crescent Dyes and Chemicals and Ltd.-

The question which came up in this appeal is whether a delinquent is entitled to be
represented by an office bearer of another trade union , who is not a member of a
recognised or unrecognised trade union functioning within the undertaking in which the
delinquent is employed. The Court ruled in the negative, based on the relevant standing
orders.

33. Depot Managar, A.P.S. R. T.C v Mohd Yousef Miya-

Whether a Criminal Trial and Internal Enquiry can be held at the same time depends on
the facts and circumstances of every case. (Please read facts ).

34. Kusheshwar Dubey v. Bharat Coking Coal Ltd- (Same as above)

35. Debotosh Pal Choudhury-

Internal enquiry held in accordance with proper procedure. (Please read facts).

36. General Manager BEST v Mrs. Agnes-

This case discussed the concept of Notional Extension of Employment under Section 3(1)
of the Act. The Court held that under Section 3(1) of the Act, the injury must be caused
to the workman by an accident arising out of and in the course of his employment.
However, employment does not necessarily end when the “down tool” signal is given or
when the workman leaves the actual workshop where he is working. There is a notional
extension as both the entry and exit by time and space. In the present case, it applied to
the BEST Bus service and the driver who travelled home on the BEST bus after finishing
his duties. His employment required him to travel on the BEST bus.

37. Saurashtra Salt Manufacturing Co. v Bai Valu Raja and Others-
A workman is not in the course of his employment from the moment he leaves home and
is on his way to work. He certainly is in the course of his employment if he reaches the
place of work or a point or area which comes within the theory of notional extension,
outside of which the employer is not liable to pay compensation for any accident
happening to him. The facts and circumstances of every case will have to examined very
carefully in order to determine whether the accident arose out of and in course of the
employment of a workman, keeping in view at all times, the theory of notional extension.

38. Kerala State Electricity Board v Valsala –

Post the 1995 amendment, the relevant date for determining compensation should be
the date of the accident and not the date of adjudication.

39. Jaya Biswal and Others v Branch Manager, IFFCO TOKIO General Insurance
Co- Negligence of the deceased employee does not disentitle his dependants
from claiming compensation under the Act. In the instant case, the deceased was
on his way to deliver goods during the course of employment when he met with
the accident. The act to get back on the moving truck was just an attempt to regain
control of the truck, which given the situation, any reasonable person would have
tried to do. Therefore it was in the course of employment.

40. Regional Director, ESI Corporation v Francis De Costa-

The injury was caused by an accident while the employee was going to his place of
employment on a bicycle . He was hit by a lorry belonging to his own employers. The injury
was held to be not in the course of employment. The injury must be caused by the
employment per se.

41. Roshan Deen v Preeti Lal-

(case based primarily on facts and Section 17 of ECA which declares any agreement
where the workman relinquishes any right to get compensation from the employer for
personal injury as null and void.)

42. Rita Devi v New India Assurance-

This matter was decided under the MV Act. Murder can also be an “accident” arising out
of the use of motor vehicle/employment (depending on the facts and circumstances of
every case).

43. Mackinnon Mackenzie v Ibrahim Mahmmed Issak-

The words “ arising out of employment” are understood to mean that “ during the course
of employment, injury has resulted from some risk incidental to the duties of the service,
which, unless engaged in the duty owing to the master, it is reasonable to believe that the
workman would not have otherwise suffered.”

44. Rama Pandey v UOI-

Commissioning mother is the legal mother and is entitled to maternity leave/ child care
leave under the relevant rules. To curtail commissioning mother’s entitlement to leave
would work to her detriment as well as that of the child.

45. Pooja Jignesh Doshi v State of Maharashtra and Hema Vijay Menon v State of
Maharashtra- On the same lines as the judgment above.

46. Mini KT. V Divisional Manager, LIC-

A lady employee is entitled to leave on account of compelling family circumstances
which includes the disability of a child. Employers must provide for such circumstances.

47. Municipal Corporation of Delhi v Female Workers Muster Role-

Muster role (daily wage) workers who have completed more than three years of service
are entitled to maternity benefits same as regular workers.

48. Radhakishan Ramnath v State of Bombay-

Interpretation of General Clauses Act. Unamended Maternity Benefits Act took into
account the amended definition of Factory in the Factories Act, 1948.

49. Anshu Rani v State of UP-

Case based primarily on facts. Please read case.

50. Neera Mathur v LIC-

Lady candidate cannot be asked uncomfortable and delicate questions about her
pregnancy and the real reason for the unjustified dismissal was her pregnancy and not
the quality of her work.
 51. UOI v Asiya Begum-
The delivery of twins after having one child amounts to two deliveries and not one
delivery. The Central Civil Services (Leave) Rules apply only if the claimant has not more
than two children.

52. B. Shah v Labour Court, Coimbatore-

Wages under Section 5 (1) of the MBA include wages for everyday of the week, including
Sunday. A week means 7 days.

53. K. Chandrika v. Indian Red Cross Society- Case based on facts/S. 12 of the MBA/
Introduction
• Before 1946, the conditions of employment were chaotic. The workmen were
hired on an individual basis, and the terms of employment were mostly oral, and
at that were too vague (Manner of intimating to workmen periods and hours of
work, holidays, pay-days and wage rate). The bargaining power of labour was weak
due to age-old poverty, mass illiteracy, and ignorance.
• The Industrial Employment (Standing Orders) Act, 1946, was adopted as a “very
simple measure” to remedy the situation by requiring employers in industrial
establishments formally to define conditions of employment under them.
• The Industrial Employment (Standing Order) Act, 1946; the Industrial Disputes
Act, 1947, and The Trade Union Act, 1926 was consolidated by the Industrial
Relations Code, 2020. The Code was enacted in 2020 and stated conditions for
employment in industrial establishments.

Object of the Act: That the object of the Act is to have uniform Standing Orders providing
for the matters enumerated in the Schedule to the Act, that it was not intended that there
should be diVerent conditions of service for those who are employed before and those
employed after the Standing Orders came into force and finally, once the Standing Orders
come into the force, they bind all those presently in the employment of the concerned
establishment as well as those who are appointed thereafter. (Agra Electric Supply Co.
Ltd. v. Aladdin, (1969) 2 SCC 598; U.P. Electric Supply Co. Ltd. v. Their Workman, (1972) 2
SEC 54)

Application of the standing order act, 1946

• This Act applies to every industrial establishment wherein one hundred or more
workmen are employed or were employed on any day of the preceding twelve
months.
• Section 28 of the IRC requires that the provisions of Standing Orders shall apply
to every industrial establishment wherein three hundred or more than three
hundred workers, are employed, or were employed on any day of the preceding
twelve months.
• Section 2(e) of the Act provides entities covered under industrial establishment.
Following are the entities listed as Industrial Establishment:
i. An industrial establishment as defined in clause (ii) of Section 2 of the Payment
of Wages Act, 1936, or
ii. A factory as defined in clause (m) of Section 2 of the Factories Act, 1948, or
iii. A railway as defined in clause (4) of Section 2 of the Indian Railway Act, 1890,
or
The establishment of a person who, for the purpose of fulfilling a contract with the
owner of any industrial establishment, employs workmen.

Non- Application of the standing order act, 1946

• Section 1(4) of the Standing Order Act provides industries excluded from the
ambit of the Act:
• any industry to which the provisions of Chapter VII of the Bombay Industrial
Relations Act, 1946, apply; or
• any industrial establishment to which the provisions of the Madhya Pradesh
Industrial Employment (Standing Orders) Act, 1961 apply
iv. The provisions of this Act shall apply to all industrial establishments under the
control of the Central Government .
• Further, as provided under Section 13B of the Act, the Standing Order Act
[Section 28(2) IRC] does not apply to the industrial establishment where the
workers employed are the persons to whom the rules below apply. The rules are
as follows:
i. The Fundamental and supplementary rules
ii. Civil services (temporary services) rules
iii. Civil services (classification, control and appeal) rules
iv. Indian railway establishment Code
v. Revised leave rules
vi. Civilians in defence service (classification, control and appeal) rules
Civil service regulations

• The Industrial Employment (Standing Orders) Act 1946 introduced the standing
order to review the law governing the relationship between the employee and
employer.
• Section 2(g) of the Industrial Employment (Standing Order) Act, 1946, defines
the Standing Order as rules relating to matters set out in the Schedule. (Section
2(zj), IRC)
• Standing orders are binding and must be followed by the employer and employee.
• 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.
Matters provided in Standing Order Act, 1946: The schedule

• Classification of workmen, e.g., whether permanent, temporary, apprentices,

probationers, or badlis.
• Manner of intimating to workmen periods and hours of work, holidays, pay-days
and wage rates.
• Shift working.
• Attendance and late coming.
• Conditions of, procedure in applying for, and the authority which may grant leave
and holidays.
• Requirement to enter premises by certain gates, a liability to search.
• Closing and reporting of sections of the industrial establishment, temporary
stoppages of work and the rights and liabilities of the employer and workmen
arising there from.
• Termination of employment, and the notice thereof to be given by employer and
workmen.
• Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct.
• Means of redress for workmen against unfair treatment or wrongful exactions by
the employer or his agents or servants.
Any other matter which may be prescribed.

Statutory nature of Standing Orders

• 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., 1963 AIR
439 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, AIR 1964 Guj 265 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.

Arguments against the statutory nature of standing orders:

• If we are to assume that the standing orders are statutory in nature, then if they
are in contradiction to the fundamental rights given to citizens in our constitution;
the constitutional validity of these statutory rights and obligations against our
fundamental rights can be argued by parties under Article 32 and Article 226 of
the constitution.
• Section 10(1) of the IESO Act clearly states that even after the certification of the
standing orders, they are liable to change on agreement between the employers
 and the workmen. This is in complete contradiction to the statutory nature of
standing orders as no statute can be modified on agreement between two parties.
Provisions with true statutory effects are not susceptible to amendments based
on agreements between two parties.
• Lastly, the Act imposes restrictions on the bargaining power of the employers
curtailing the freedom of contract so that employers must present draft standing
orders which are compatible with the statute. In no way does the Act delegate any
legislative powers to any authority but rather, it imposes an obligation on an
individual employer to make rules keeping in mind the model standing orders
given in the schedule. Furthermore, the Certifying officer has only limited judicial
power. Thus, certified standing orders are not delegated legislation and hence,
are not statutory in nature.

Standing Orders as an ‘award’

• Section 4 of the IESO Act states that the decision maker or the Certifying Officer,
after hearing both the parties, adjudicates upon the “fairness or reasonableness”
of standing orders laying down the conditions of the employment. This, in turn,
makes standing orders as a kind of “award”. But this cannot be the case, as the
Industrial Disputes Act, 1947 does not consider the Certifying Officers as the
decision makers in matters of industrial disputes and thus the standing orders
cannot be an award.
• Also, the Certifying Officer does not, in any way or form, settle an industrial
dispute; he merely modifies or certifies the draft standing orders after hearing both
the parties.
• Section 13(2) of IESO Act makes the employer liable for any contravention of the
standing orders, thus contradicting the principle that an award is as binding and
applicable to one party as it is to the other.

Standing Orders as special kinds of contracts:

• An argument in favor of the contractual nature of standing order comes from the
case of Buckingham and Carnatic Co. Vs. Venkatayga, 1964 AIR 1272
wherein Justice Gajendragadkar stated that:
“The certified Standing Orders represent the relevant terms and conditions of service
in a statutory form, and they are binding on the parties at least as much, if not more, as
private contracts embodying similar terms and conditions of service.”
• Another statement in favor of the contractual nature of standing order comes
from Mettur Industries Ltd Vs. A.R. Varma And Ors, AIR 1959 Mad 479 the
High Court of Madras stated that:
“Reading the Act as a whole it is clear that the standing orders form part of the contract
between the management and every one of its employees.”
v. Lastly, in an amendment of the Industrial Disputes Act, 1964, the following was
added to Section 33:
“[(2) During the pendency of any such proceeding in respect of an industrial dispute,
the employer may, in accordance with the standing orders applicable to a workman
concerned in such dispute [or, where there are no such standing orders, in accordance
with the terms of the contract, whether express or implied, between him and the
workman...]

Section 3: Submission of draft standing orders

• Section 3 of the Act requires the employer to submit draft standing orders within
six months from the date on which this Act becomes applicable to an industrial
establishment. Section 3(2) provides that in the draft thus submitted provision
shall be made for every matter set out in the Schedule which may be applicable
to the industrial establishment, and where Model standing orders have been
prescribed shall be, so far as is practicable, in conformity with such model.
• As an effect of this provision the certifying offer has to be satisfied that the draft
standing orders deal with every matter set out in the Schedule and are otherwise
in conformity with the provisions of the Act. It is quite true that this requirement
does not mean that the draft standing order must be in identical words, but it does
mean that in substance it must conform to the model prescribed by the
appropriate government. (Associated Cement Co. Ltd. v. P. D. Vyas, AIR 1960
SC 665)
• A similar view has been endorsed by the Supreme Court in Rohtak and Hissar
Districts Electric Supply Co. Ltd. V. State of U.P., AIR 1966 SC 1471.

Section 4: Conditions for certification of standing orders & Section 30(7), IRC

• The proviso to Section 4 of the Act, as amended by Act 56 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.
• 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 employer(s), for that would frustrate the intent of the
legislature by rendering the conditions of employment as indefinite & diversified,
just as existed prior to the enactment of the said Act.
 Standing Order > Employment agreement

• In Western India Match Co. Ltd. v. Workmen, AIR 1973 SC 2650, the question
that came before the SC for consideration was whether an agreement made
between the employer and workman, which is inconsistent with the Standing
Order, will prevail over the Standing Order.
• According to the standing order, a workman shall not be kept on probation for
more than two months. If he has worked during these two months to the
satisfaction of the company, he becomes permanent. The employment
agreement mentions probation period of six months.
• The Court is of the opinion that the employment agreement is inconsistent with
the Standing Order to the extent of the additional four months’ probation. The
terms of employment specified in the Standing Order would prevail over the
corresponding terms in the contract of service in existence on the enforcement of
the standing order.