2. Nature of standing orders under the Industrial Employment (Standing Order) Act,
1946
The Industrial Employment (Standing Order) Act, 1946 (hereby
referred to as ‘IESO’) precisely defines the conditions of
employment under an employer to both the employer and the
workmen.
Before the IESO Act was passed, there was a lack of order and clarity
regarding the terms of employment by an employer. The workmen at
that time were hired on a contractual basis individually, and in most
cases these contracts were either express or implied, thus often
leading to a misunderstanding of expectations between the employer
and the workmen.
3. EARLIER NO SAFEGUARDS AGAINST
DISCIPLINARY ACTION
In many cases, these terms and conditions of hiring were ambiguous
and led to friction between the workmen and the management. The
lack of rules for securing permanency of the job, fair deal and
disciplinary action on petty matters was a worrying problem for
industrial workmen. There was no provision against abrupt dismissal
or wrongful termination. The workmen had no safeguards
against any disciplinary actions that the employers took for
they didn’t have any guidelines or rules protecting their
interest. Even in large industries, if there was a standing order,
there was no particular guidelines that it had to follow or any
legislation governing the enforcement of the same.
4. IESO PASSED
With the concept of Trade Unionism coming into play, the State and
the Tripartite Labour Conference became the voice of the workmen
and helped pass the Industrial Employment (Standing Order) Act in
1946 to ensure clear and well-defined employment conditions
or standing orders that helped establish smoother working relations
between industrial workmen and employers.
The objective of the IESO Act is to regulate the conditions of
recruitment, discharge, disciplinary action, holidays, classification of
workers, mechanism of wage rates, attendance issues, etc.
5. TO DEFINE CONDITIONS: IESO ACT
FOLLOWED
Anything that requires ‘employers in industrial establishments
formally to define conditions of employment under them’ falls within
the scope of the IESO Act.
The Act makes it binding for employers to ‘define with sufficient
precision the conditions of employment and to make those conditions
known to the workmen.
The IESO Act helped introduce a uniformity or 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. Overall, the IESO Act helped bring regulation and a
sense of order amongst the workmen and the employers.
6. CONDITIONS TO BE CERTIFIED :
CERTIFYING OFFICER
This Act requires the employers to define the conditions of
service in their establishments and to put them in writing and then
get them certified by the Certifying Officer to avoid any unnecessary
industrial disputes in the future between the employers and the
workmen. The standing orders of the said industrial establishment
must conform to the model standing orders but not necessarily
consist only of the model standing order. If the establishment wishes
to add to the standing orders, then they can do so, provided the draft
of the same gets approved by the Certifying Officer.
7. PRIOR /SUBSEQUESNT EMPLOYMENT:
IESO APPLICABLE
In the case of Avery India Ltd. v. Second Industrial Tribunal, West
Bengal it was held that the provisions as to the age of retirement in
the standing orders of an establishment would apply to all the
employees irrespective of whether or not they were part of the
establishment where they work prior to or subsequent to the
standing orders coming into force, even though there was no such
provision for the age of retirement in the past.
8. Standing Orders
The term ‘Standing Orders’ refers to the rules relating to the
matters defined in the Schedule of the IESO Act. These matters
should be according to the Schedule, provided in Standing Orders
under this Act as follows:
• Classifications of workmen, e.g., temporary, permanent, apprentice,
probationers, etc.
• Manner of intimating to workmen periods and hours of work,
holidays, paydays and wage rates.
• Shift working.
• Attendance and late coming
9. • Conditions of procedure in applying for and the authority which may
grant leave and holidays.
• The requirement to enter premises by certain gates and liability to
search.
• Closing and reopening of sections of the industrial establishment, and
temporary stoppages of work and the rights and liabilities of the
employer and workmen arising therefrom.
10. • 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
executions by the employer or his agents or servants.
• Any other matter which may be prescribed.
It shall be obligatory upon the employer to make provision in the
Standing Orders in respect of any matter provided in the Schedule of
the Act. Once a provision is made it can be modified only in
accordance with the provision of Section 10(2) of the Act.
11. Nature of Standing Orders
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.
12. 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. 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…”.
13. 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. 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…”.
14. ARGUMENTS: IF AGAINST FUNDAMENTAL
RIGHTS
Arguments against the statutory nature of standing orders can be put
forward as follows:
• If we are to assume that the standing orders are statutory in nature,
then 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. Another aspect to consider is the infringement of Article
14 and the Right to Equality caused by assuming certified standing
orders as statutory in nature and applying it to workmen of like
industries and under similar circumstances.
15. NO LEGISLATIVE POWERS
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, we understand that certified standing orders are not delegated
legislation and hence, are not statutory in nature.
16. 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.
17. CERTIFYING OFFICER: ONLY MODIFIES OR
CERTIFIES DRAFT STANDING ORDERS
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. Another aspect to consider
would be that if we consider the standing order as an award, certain
provisions pertaining to limitations on lock-outs and strikes would
come into play as given under the Industrial Disputes Act, 1947.
Lastly, 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.
18. So we conclude that certified standing orders are neither completely
statutory in effect nor do they fall under the category of an award.
19. Standing Orders as special kinds of contracts
The certified standing orders have a statutory force but they are not
necessarily statutory in nature as we have already discussed.
The standing order implies a contract between the employer
and the workman. Therefore, the employer and workman cannot
enter into contract overriding the statutory contract as embodied in
the certified standing orders. While the standing orders are in force it
is not permissible for the employer to seek their statutory
modifications which leads to there being one set of standing orders in
respect of certain employees and another set for others.
20. Therefore, no workman can be appointed by the employer with terms
and conditions different from those defined in the standing orders
unless the standing orders are modified in accordance with the
provisions of matter discussed in the Schedule of the IESO Act.
It is not open to an Industrial Tribunal to ignore an existing standing
order in matters that refer to individual discipline. And no Industrial
Tribunal can make amendments and modifications in standing orders
unless they are contractual in nature.
21. Conclusion
When we consider the nature of Standing Orders individually as
statutory, contractual or as an award, we can conclude positively that
it doesn’t fit under any one category completely. There are solid
arguments against successful categorization of Standing Orders and
thus the nature of Standing Orders can be concluded as amorphous
and ambiguous in nature.
22. NEXT TOPIC
Scope and Coverage of the Industrial Employment (Standing Orders) Act, 1946
