INTRO-
The Industrial Employment Act, also known as the Industrial Employment (Standing
Orders) Act, is a pivotal legislation enacted to regulate employment conditions in
industrial establishments across India. Enacted in 1946, it aims to promote industrial
peace, discipline, and fairness by establishing uniform standards for terms of
employment, such as working hours, wages, leave, and disciplinary procedures. This act
plays a crucial role in safeguarding the rights and interests of both employers and
employees, ensuring a harmonious working environment conducive to productivity and
growth in the industrial sector.
Under the Industrial Employment Act, the following authorities are involved in its implementation and
enforcement:
1. **Certifying Officer**: Responsible for certifying the standing orders proposed by the employer
and ensuring they comply with the provisions of the Act.
2. **Appellate Authority**: Handles appeals against the decisions of the Certifying Officer
regarding the certification of standing orders.
3. **Government**: The appropriate government at the state or central level has the authority to
make rules for carrying out the purposes of the Act.
4. **Inspector-cum-Facilitator**: Inspects industrial establishments to ensure compliance with the
Act and may also facilitate the settlement of disputes between employers and employees.
These authorities work together to ensure that the provisions of the Industrial Employment Act are
followed effectively in industrial establishments, promoting fairness and adherence to employment
standards.
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 officers under the Industrial Establishment Act are responsible for certifying the standing
orders submitted by the employer, ensuring they comply with the provisions of the Act, safeguarding
the interests of workers, and settling disputes related to the standing orders of the industrial
establishment. They play a crucial role in maintaining harmonious employer-employee relations and
ensuring fair labor practices within the establishment.
Section 3
(1) Within six months from the date on which this Act becomes applicable to an industrial
establishment, the employer shall submit to the Certifying Officer five copies of the draft
standing orders proposed by him for adoption in his industrial establishment.
Explained
1. Employers must create and submit five copies of their workplace rules (called ‘standing
orders’) to a Certifying Officer within six months after this law starts to apply to their
business.
2. The rules they create should cover all the topics listed in the law’s Schedule that are
relevant to their business. If there are any model rules provided by the government, the
employer’s rules should match these as closely as possible.
3. When submitting these rules, employers also need to provide details about their
workers, including which union they belong to, if any.
4. If certain conditions are met, a group of employers from similar businesses can submit a
joint set of workplace rules.
SECTION 4
Sec. 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
The Certifying Officer the appellate authority shall have the power to or 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 the social interest in the claims of the employer and the demands of
workmen permissible under section 10 but that can be Modification of Standing Orders is 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. The question as to fairness and
reasonableness of modification has been left by Legislature to the authorities empowered under the
Act and the Supreme Court under Art. 136 of the Constitution would not be justified in interfering
with conclusions of authorities unless an important principle of laws requiring elucidation is
involved. The Parliament has by amending sections 4 and 10 of the Act given dual remedy to the
workmen. One is to raise an industrial dispute under the Industrial Dispute act and the other by
conferring the right to individual workmen to Contest the Draft Standing Orders submitted by the
employer for certification on the ground that they are either not fair or reasonable and more
important is the right to apply for their modification.
REASONABLENESS OF STANDING ORDER:-
Section 3 of the Act empowers the Certifying Officer or the appellate authority to enquire into the
impracticability to follow the Model Standing Order and section 4 of the Act authorises them to
adjudicate upon the fairness or reasonableness of the Draft Standing Order. All
IPLEADERS-
According to Section 3 of the Act, the certifying officer or appellate authority is empowered to
inquire into the impracticality, if any, while Section 4 gives them the power to adjudicate and decide
the issue of fairness and reasonableness of the drafted standing order.
In the case of Jeewanlal Ltd. V. Workmen (1972), the Supreme Court held that the present day
tendency to fix the age of superannuation is usually 60 years unless and until the tribunal feels that
the work is hazardous or needs hard work and the workmen might lose efficiency.
Further, in the case of Associated Cement Co. Ltd. V. PD Vyas (1960), the Supreme Court modified
the standing order related to misconduct due to strikes and their incitement in order to include
illegal strikes within its ambit. This was considered reasonable and fair these enquiries by authorities
should be in an integrated manner and thus construed there will be no conflict between the two
sections. Where the by the employer for addition of a Standing Order providing age and ground of
Standing Order made no provision regarding age of retirement, an application retirement could not
be ordered as it could not be considered to be in conformity with the Model Standing Orders
With regard to the fixing of age of superannuation by Standing Orders the Supreme Court in
Jeewanlal Ltd. V. Workmen, observed that “the present day tendency was to fix the age of
superannuation generally at 60 years unless the Tribunal feels that the work of the operatives is
particularly arduous or hazardous where workmen may lose efficiency earlier.
In Associated Cement Co. Ltd. V. P.D. Vyas, the Certifying Officer modified the Draft Standing Orders
submitted by the management and in respect of the Standing Order relating to the notice period for
discontinuance of a shift, he increased the notice period from 14 days to one month to bring it in
conformity with the Model Standing Orders. On similar grounds the Standing Orders relating to
what amounted to misconduct in relation to strikes and incitement to strikes was modified to
include
Only illegal strikes. It was held that: “the cumulative effect of the provisions of the Act is that the
Certifying Officer 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.”
Matters not covered by the Schedule.
The question whether provision may be made in the Standing Orders in respect of any matter, which
is neither covered by any item of the Schedule nor by the Model Standing Orders but which is fair
and reasonable, the Supreme Court did not express any categorical opinion on this point in U.P.
Electricity Supply Co. v. T.N. Chatterjee. However, in the Hindu v. Its Secretary the Madras High
Court has held that there is no bar in making provision in the Standing Orders about any matter
which is not covered by the Schedule, but it is obligatory to make provision with regard to matters
covered by the Schedule.
In Rohtak and Hissar District Supply Co. Ltd. V. State of U.P.” the Supreme Court has held that the
employer cannot insist upon adding a condition to the Standing Order which relates to the matter
which is not included in the Schedule. It was further held that provision may be made in the
Standing Order concerning the rights and liabilities of the employer and the employees and their
enforcement by an internal arrangement between the employer and his employees. It is not
permissible under the Act to introduce appeals to outside authority and thereby extend the scope of
the provisions which can legitimately be made by the Standing Orders
SECTION 5-
Bare Act
(1) On receipt of the draft under section 3, the Certifying Officer shall forward a copy thereof to the
trade union, if any, of the workmen, or where there is no such trade union, to the workmen in
such manner as may be prescribed, together with a notice in the prescribed form 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.
(2) After giving the employer and the trade union or such other representatives of the workmen as
may be prescribed an opportunity of being heard, the Certifying Officer shall decide whether or
not any modification of or addition to the draft submitted by the employer is necessary to
render the draft standing orders certifiable under this Act, and shall make an order in writing
accordingly.
(3) The Certifying Officer shall thereupon certify the draft standing orders, after making any
modifications therein which his order under sub-section (2) may require, and shall within seven
days thereafter send copies of the certified standing orders authenticated in the prescribed
manner and of his order under sub-section (2) to the employer and to the trade union or other
prescribed representatives of the workmen.
EXPLAINED
Part 1: When an employer submits their proposed workplace rules (draft standing orders), the
Certifying Officer must share a copy with the workers’ trade union, or directly with the workers
if there isn’t a trade union. The workers are given a 15-day notice to raise any objections to
these proposed rules.
Part 2: The Certifying Officer will listen to both the employer’s and the workers’ (through their
trade union or representatives) views before deciding if any changes are needed to the
proposed rules to make them officially acceptable. The Officer will then write down their
decision.
Part 3: After making any necessary changes, the Certifying Officer will officially approve the
workplace rules and send authenticated copies of these rules and the written decision to both
the employer and the workers’ representatives within seven days.
General Manager Bhilai Project V. Steel Workers Union AIR 1954 S.C. 1333
Where an application for certification of Standing Order was made to a Certifying Officer who did
not have jurisdiction to deal with it at the time of the application, but acquired such jurisdiction later
on, and had the jurisdiction when the order certifying the draft Standing Orders was made by him it
was held that “the application for certification of the Standing Orders though invalid at the time it
was made because the officer had no jurisdiction to deal with them, became a valid application
when he did acquire jurisdiction; to put the matter in another way, the application should be
deemed to have been reviewed immediately after the officer acquired jurisdiction in the matter and
that jurisdiction having continued upto the date of certification, the certification also would be
within his jurisdiction and binding.”
It Is not the function of the Certifying Officer to suggest how the parties will govern their
relationship outside the ambit of Standing Orders that he has certified
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 thereof to any person applying therefore on payment of the prescribed fee.
After the rules for workplace management (called “standing orders”) are officially approved, the
person in charge of certifying these rules (the “Certifying Officer”) must keep a copy in a special
record book. If someone wants a copy of these rules, they can get one from the Certifying Officer by
paying a fee.
Section 11
(1) Every Certifying Officer and appellate authority shall have all the powers of a Civil Court for
the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses,
and compelling the discovery and production of documents, and shall be deemed to be a civil
court within the meaning of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of
1974).
(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.
Simplified Act
(1) People who review and certify employment-related orders (Certifying Officers) and those
who hear appeals against these orders (appellate authorities) have the same powers as a regular
court when it comes to gathering evidence, making people swear to tell the truth, making sure
witnesses show up, and forcing people to hand over documents. For certain legal purposes, they
are considered to be just like a civil court.
(2) If there are small mistakes like typos or math errors in any decisions made by a Certifying
Officer or an appellate authority, or if something was accidentally left out or added, these errors
can be fixed by that same Officer or authority, or by whoever takes over their job, at any time.
Explanation using Example
Imagine a scenario where a manufacturing company has revised its employment policies, and a
group of employees believes that these new policies are unfair. They file a complaint with the
Certifying Officer under The Industrial Employment (Standing Orders) Act, 1946. During the
hearing, the Certifying Officer exercises their powers similar to those of a Civil Court, such as
summoning the HR manager of the company to testify and provide the employee handbook and
other relevant documents.
After the hearing, the Certifying Officer issues an order to amend certain policies. However, the
employees later notice a clerical error in the order, where the probation period for new
employees is stated as '60 days' instead of the '90 days' that was agreed upon during the hearing.
They approach the Certifying Officer, who then uses the power granted by section 11(2) of the
Act to correct this arithmetical mistake, ensuring that the order accurately reflects the decision
made
.
IPLEADERS-
The certifying officer and the appellate authority have been vested with power on deciding on
the matters arising in course of certification and afterwards. Under Section 11 of the Act. The
certifying officer and appellate authority shall have all powers of the civil court within the
meaning of Section 345 and Section 346 of the Code of Criminal Procedure, 1973 (“CrPC”).
While exercising powers of civil court, appellate authority may-
Receive evidences;
Administer oaths;
Enforce the attendance of witnesses; and
Compel the discovery and production of documents.
If the order of appellate authority or certifying officer has some clerical or arithmetical mistakes,
then it can be corrected by respective officers or their offices. Further, errors arising from any
accidental slip or omission in the slip may also be corrected.
When can any order be challenged under Article 226 of the Indian Constitution?
Article 226 of the Constitution of India empowers the High Courts for issuing writs. However,
under certain circumstances, the appeal against the order of the certifying authority or the
appellant authority may be entertained under the Article 226 of the Constitution of India.
In the case of Narendra Pal Gahlot v. State of Uttar Pradesh, (1994) LLR 21 (All) the employees
were terminated from service which was challenged in this case. The employee’s claim that a
specific clause of Certified Standing Order of the establishment was violative of Article 14 and
Article 16 of the Indian Constitution, as orders are interpreted to terminate employees without
serving any chargesheet, without enquiry and without giving any opportunity of hearing.
The way of termination of their employment violated the principles of natural justice. The
Allahabad High Court held that in such cases where the orders are violative of the principles of
natural justices and their rights, then such orders can be questioned under Article 226 of the
Constitution of India.
Conclusion –
The preamble of the Act states that the object of the Act is to require employers in industrial
Establishments to define with sufficient precision the conditions of employment under them and to
Make the said conditions known to the workmen. Accordingly, the object of the Act is to have Uniform
Standing Orders providing for matters enumerated in the Schedule to the Act. The object of The Act is to
regulate with precision the conditions of recruitment, discharge disciplinary actions, Leave etc. of
workers employed in industrial establishment. This is a Central Act and as such extends To the whole of
India. It applies to (a) every industrial establishment wherein 100 or more workmen Are employed; or
(b) wherein 100 or more persons were employed on any day of the preceding 12 Months and © the
establishment of a contractor who employs workmen in order to fulfil a contract With the owner of an
industrial establishment.
Case laws-
Bharatiya Kamgar Karmachari Mahasangh v. Jet Airways Ltd. (2023)
Facts of the case
In this case, the respondent owned and operated aviation companies. He entered into a contract with
169 temporary workmen. In the model standing orders under the Bombay Industrial Employment
(Standing Orders) Rules, 1959, it was specified that the employees upon completion of 240 days of their
employment must be considered as permanent employees. Despite this, the employees upon
completion of 240 days of employment were still treated as temporary.
The trade union decided to take action against the practices of the employer. On 2 nd May 2002, the
employer and the trade union entered into settlement to resolve the dispute. As per this settlement, the
employees were given numerous benefits as an award if the employees give up their demand of getting
permanent employment. On this basis, the employer didn’t grant permanent employment to the
employees.
The Industrial Tribunal and Bombay High Court held that mere completion of 240 days does not give the
employees the right to claim permanency. The model standing order is not a statutory provision.
Thereafter, it was the after was appealed to the Supreme Court.
Issues raised
Which is the Appropriate Authority empowered to issue the Standing Order(s) under the Industrial
Employment (Standing Orders) Act, 1946 (hereinafter referred to as ‘The Act’)?
Whether private agreement/settlement between the parties would override the Standing Order?
Judgment of the Court
The Supreme Court held that since the company was not under the Central government’s control, the
“Appropriate Authority” in this matter would be the state government. The Supreme Court held that any
such contract cannot take place which overrides the statutorily provided Certified Standing Order. The
Supreme Court quashed the orders from the lower courts and gave a decision in favour of the trade
union
SECTION 12- Oral evidence in contradiction of standing orders not admissible
SECTION 13- PENALTIES
SECTION 13A- Interpretation, etc, of standing orders
If there is any confusion or disagreement about how a company rule (standing order) should be applied
or understood, anyone involved—like an employer, employee, trade union, or employee representative
group—can ask a Labour Court to clarify it. The Labour Court will listen to all sides before making a
decision. This decision will be final and must be followed by everyone involved.
SECTION 13B- Act not to apply to certain industrial establishments
This law does not apply to workplaces where employees are governed by specific government service
rules and regulations. These include Fundamental and Supplementary Rules, various Civil Service Rules,
Leave Rules, Service Regulations, and any other rules for government workers that are officially
announced by the government.
