The Labour Committee in 1944-46 found that there was a substantial lack of understanding on the part of employees about their employment conditions. This often became the cause for friction between the management and workers in industrial undertakings. The right of workers to know all terms and conditions related to their work and employment was felt as mandatory. This was deemed necessary to help minimize the exploitation of workers against their will and knowledge. As a result, the Industrial Employment (Standing Orders) Central Act, 1946 came into force which mandates any industrial establishment to formally define conditions of employment with sufficient precision, thereby promoting fair industrial practices. The Industrial Employment (Standing Orders) Central Rules, 1946 (https://pblabour.gov.in/Content/documents/pdf/acts_rules/industrial_employment_standing_orders_rules.pdf) were also published, as required by Section 15(1) of the Industrial Employment (Standing Orders) Act, 1946. These rules were recently amended in 2018 (https://labour.gov.in/sites/default/files/FTE%20Final%20Notification.pdf).
The Act consists of 15 Sections and a Schedule:
Section 1(3) states that the Act is applicable to all industrial establishments that employs 100 or more persons. Section 1(4) further states that the Act shall NOT be applicable to industrial establishments that fall under the provision of Chapter 7 of the Bombay Industrial Relation Act, 1946 or the Madhya Pradesh Industrial Employment (Standing Orders) 1961.
Section 3 of the Act mandates, employers of all industrial establishments to submit five copies of the draft Standing Orders (i.e. a set of rules pertaining to working of an establishment) to the Certifying Officer for adoption (as proposed by the Certifying Officer), within six months from the date on which this Act becomes applicable. Employers are mandated to cover all matters set out in the Schedule of the Act, listed below, to be included while drafting the Standing Orders.
- Classification of workers (whether permanent, temporary, apprentices, probationers, or badlis)
- Publication and communication of work time, holidays, pay days, and wage returns
- 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 workers arising there from.
- Termination of employment, and the notice thereof to be given by employer and workers.
- Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
- Means of redress for workers against unfair treatment or wrongful exactions by the employer or their agents.
- Any other matter which may be prescribed.
As outlined in Section 5 of the Act, in case of no discrepancy, the Certifying Officer is required to send seven copies of the certified Standing Orders back to the employer and to the trade union or the representative of workers.
Section 6 of the Act highlights that the decision taken by the Appellate Authority will be considered as final in case any party (employer, workers, trade union) feels aggrieved by the certified Standing Orders.
According to Section 7, in case of discontent, an appeal should be made within 30 days from the date on which authenticated copies of the certified Standing Orders are sent to the concerned parties or else, the certified Standing Orders shall come into operation.
As per section 10(1), certified Standing Orders under this Act cannot be modified until expiry of six months from the date on which the Standing Order or the last modification came into operation. Only an employer or worker is eligible to apply to the Certifying Officer for modification of Standing Orders.
Section 10(a) outlines that when a worker is suspended, the worker is entitled to 50 percent of their wages during the first 90 days of an ongoing or pending investigation or charges of misconduct or inquiry into a complaint; 75 percent of wages are to be provided for the remaining period of suspension if the delay in completion of disciplinary proceedings against such worker is not directly attributable to the conduct of the worker.
Section 11 of the Act establishes that every Certifying Officer shall have all the powers of a civil court.
In Section 13 of the Act, all penalties and procedures are enumerated. These are applicable if an employer fails to submit draft Standing Orders, or the employer does not comply with the certified Standing Orders or leads to contravention of the law.