B.A. LL.

B (Semester- V)

LABOUR LAWS- I

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 INDEX

1. Syllabus 3-4

2. Unit- Wise Demarcation of PYQs 5-6

3. Lecture Plan 7-8

4. Unit-III Descriptive Notes 9-31

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 LL.B. (Integrated) Five Years Degree Course

(Third Year)

V Semester

Paper Code : LB-503

Paper III

Labour Laws-I (The Industrial Relation Code and The Code on Wages)

Unit I: (Lecture 10)

i. Industrial Relation
ii. Industrial Jurisprudence
iii. Labour Welfare
iv. Labour Problem
v. Labour Policy in India
vi. International Labour Organization
vii. Trade Unionism and Collective bargaining-process its merit and demerit
viii. Definitions
ix. Bi-Partite forums
x. Trade Unions (Section 5-27)

Unit II: (Lecture 06)

i. Industrial Dispute Act,1947 Scope of Industry,

ii. Workmen, Employers, Industrial Disputes,
iii. Authorities under the Industrial Dispute Act,1947
iv. Procedure, Power and Duties of Authorities, Reference to Dispute to Boards , Courts
or Tribunals

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Unit III: (Lecture 04)

i. Strike, Lock-out, Lay-off, Retrenchment and closure

ii. Unfair Labour Practices, Penalties,
iii. Offences by Companies etc.
iv. Industrial Employment (Standing Order) Act, 1946

Unit IV: (Lecture 04)

i. Philosophy of Labour Welfare, Historical Development of Labour welfare,

ii. The Factories Act, 1948: Interpretation-competent person, Hazardous process,
manufacturing process , worker , factory occupier, health, Safety and welfare
iii. Working house of Adults, Employment of young persons, inspectors- appointment
and powers

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UNIT WISE DEMARCATION OF PYQ’s

Unit I:

a) What do you mean by “Industrial Relation”? Discuss the Indian labour policy explaining
how far it has been successful in resolving relevant labour problems. (2021)

b) Narrate the history and development of Trade Union Movement in India from the
nineteenth century till independence.(2021)

c) Discuss the rights and liabilities of a registered Trade Union under the Trade Unions Act,
1926. How is a political fund different from general fund? (2021& 2022)

d) Discuss the history and development of labour welfare legislation in India during the
twentieth century. Are “Labour Welfare” and “Industrial Growth” contradictory to each
other? (2021)

e) Discuss labour problems and labour policy in India emphasizing legislative provisions.
(2022)

f) Trace the history and development of Trade Union movement in India. Name any two
important Trade Unions of National level.(2022)

Unit II:

a) Define “Industrial Dispute” and “Workman” under the Industrial Disputes Act, 1947
citing relevant case-laws. (2021)

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 b) Discuss the constitution and jurisdiction of a Labour Court under the Industrial Disputes
Act, 1947. How is it different from that of a Labour Tribunal? (2021)

Unit III:

a) Discuss “Strike” as a means of collective bargaining process. What are the provisions
relating to prohibition of illegal strikes and lock-outs? What is the difference between
lay-off and retrenchment? (2021)

b) Discuss “Strike” as a means of collective bargaining process. What are the provisions
relating to prohibition of illegal strikes and lock-outs? What is the difference between
lay-off and retrenchment? (2021)

c) What is the aim of “Standing Orders” under the Industrial Employment (Standing Orders)
Act, 1946? Discuss the powers and functions at a certifying officer under the above
mentioned Act. (2021)

d) Discuss the main provisions of Industrial Employment (Standing orders) Act, 1946. What
is the role of certifying officer under it? (2022)

e) Discuss ‘Strike’ as a means of collective bargaining process. What are the prohibitions
regarding illegal strikes and lockouts. (2022)
f) Write short notes on any two of the following: (2022)

i)Lay-off

ii) Retrenchment

iii) Workman

Unit IV:

a) Explain the powers and duties of ‘Inspectors’ under the Factories Act, 1948 . (2022)

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LECTURE RE-PLAN

Unit I: (Lecture 10)

Lecture 1: Industrial Relation

Lecture 2: Industrial Jurisprudence

Lecture 3: Labour Welfare

Lecture 4: Labour Problem

Lecture 5: Labour Policy in India

Lecture 6: International Labour Organization

Lecture 7: Trade Unionism and Collective bargaining-process its merit and demerit

Lecture 8: Definitions

Lecture 9: Bi-Partite forums

Lecture 10: Trade Unions (Section 5-27)

Unit II: (Lecture 04)

Lecture 1: Industrial Dispute Act,1947

Lecture 2: Scope of Industry, Workmen, Employers, Industrial Disputes,

Lecture 3: Authorities under the Industrial Dispute Act,1947, Procedure

Lecture 4:, Power and Duties of Authorities, Reference to Dispute to Boards , Courts or
Tribunals

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Unit III: (Lecture 04)

Lecture 1: Strike, Lock-out, Lay-off, Retrenchment and closure

Lecture 2: Unfair Labour Practices, Penalties,

Lecture 3: Offences by Companies etc.

Lecture 4: Industrial Employment (Standing Order) Act, 1946

Unit IV: (Lecture 04)

Lecture 1: Philosophy of Labour Welfare, Historical Development of Labour welfare,

Lecture 2: The Factories Act, 1948: Interpretation-competent person, Hazardous process,

manufacturing process , worker , factory occupier, health, Safety and welfare

Lecture 3: Working hours of Adults, Employment of young persons,

Lecture 4: Inspectors- appointment and powers

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 DESCRIPTIVE NOTES
Unit III:

Lecture 1: Strike, Lock-out, Lay-off, Retrenchment and closure

Question 1) Write short notes on-

a) Strike
b) Lock-out
c) Lay-off
d) Retrenchment and
e) closure

Ans: The Industrial Disputes Act, 1947 was enacted to regulate industrial disputes in India and
promote harmony in industrial relations. It defines and governs key aspects such as strikes,
layoffs, retrenchment, and closure, providing a legal framework to ensure that the rights of both
employers and employees are protected. These terms have specific legal meanings under the Act,
with provisions addressing their conditions, legality, and compensation mechanisms.

a) Strike: A strike, as defined under Section 2(q) of the Industrial Disputes Act, refers to a
cessation of work by a group of workers employed in any industry, acting together, or a
collective refusal to continue work or accept employment. The aim is usually to express a
grievance or demand.

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To be considered lawful in public utility services, the Act mandates certain conditions under
Section 22:

- Workers must provide 14 days' notice to the employer before initiating a strike.

- The strike must occur within six weeks of the notice.

- A strike cannot commence during the pendency of conciliation proceedings and up to seven
days after they conclude.

For other industries, Section 23 prohibits strikes during the pendency of conciliation or
adjudication proceedings and when a settlement or award is in effect. Any strike in violation of
these provisions is deemed illegal under Section 24.

In the landmark case of T.K. Rangarajan v. Government of Tamil Nadu (2003), the Supreme
Court ruled that government employees do not have a constitutional right to strike. Another
important ruling, Indian General Navigation & Railway Co. Ltd. v. Their Workmen (1960),
clarified that a justified strike must be reasonable and proportionate to the demands of the
workers.

b) Lock-out: A lock-out is one of the key concepts related to industrial disputes under the
Industrial Disputes Act, 1947 (IDA). It is an action taken by employers to pressurize their
workers, typically by closing down the place of employment and suspending work. The
term is legally defined and regulated under the Act to prevent its misuse and ensure that
industrial relations are maintained within a lawful framework.

Definition of Lock-out (Section 2(l)): Under Section 2(l) of the Industrial Disputes Act, a lock-
out is defined as:

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“The temporary closing of a place of employment, or the suspension of work, or the refusal by
an employer to continue to employ any number of persons employed by him.”

In simple terms, a lock-out occurs when an employer closes down their establishment or refuses
to give work to employees as a form of economic pressure during an industrial dispute. It is often
a response to strikes or demands by workers.

Legal Provisions Governing Lock-outs: Several sections of the Industrial Disputes Act, 1947,
regulate the conditions and legality of lock-outs.

1. Prohibition of Lock-out in Public Utility Services (Section 22(2)):

For industries categorized as public utility services, Section 22 imposes specific restrictions. A
lock-out in these sectors can only be legal if the following conditions are met:

- The employer gives a notice of lock-out at least 14 days before the lock-out commences.

- The lock-out cannot take place during the pendency of conciliation proceedings and seven days
after the conclusion of such proceedings.

Public utility services include industries such as water, power, transportation, and postal services,
which are essential for the public at large. In these sectors, lock-outs can cause significant
disruptions, so strict procedural requirements are in place.

2. Prohibition of Lock-out During Certain Periods (Section 23): Section 23 provides additional
restrictions on lock-outs across all industries:

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- No employer shall declare a lock-out during the pendency of conciliation proceedings before a
Board or during the pendency of adjudication proceedings before a Labour Court, Tribunal, or
National Tribunal.

- No lock-out can be declared in violation of a settlement or award that is in operation.

3. Illegal Lock-out (Section 24):

Section 24 defines illegal lock-outs. A lock-out is illegal if:

- It is declared in violation of Section 22 (public utility services) or Section 23 (pendency of

proceedings).

- It is in contravention of an existing settlement or award.

An illegal lock-out can lead to penalties for the employer and may also give workers the right to
legal recourse.

4. Penalties for Illegal Lock-out (Section 26): According to Section 26, if an employer is found
guilty of declaring an illegal lock-out, they are subject to the following penalties:

- Imprisonment for a term which may extend to one month, or

- A fine which may extend to Rs. 1,000, or

- Both imprisonment and fine.

Distinction between Lock-out and Strike

Although lock-outs and strikes both involve suspension of work, there is a crucial distinction:

- A strike is initiated by workers, often to pressurize the employer for better wages, working
conditions, or other demands.

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- A lock-out, on the other hand, is initiated by the employer to pressurize workers, usually in
response to a strike or during industrial negotiations.

Case Laws on Lock-outs: Several judicial pronouncements have interpreted the provisions
related to lock-outs, helping to clarify their legal scope and enforceability.

1. Management of Kairbetta Estate v. Rajamanickam (1960): In this case, the Supreme Court
observed that a lock-out is the counterpart of a strike, meaning both are weapons available to
either side in industrial disputes. A lock-out is deemed legal if it adheres to the statutory
requirements and is declared for legitimate reasons.

2. Express Newspapers (P) Ltd. v. Their Workmen (1962): The Supreme Court ruled that a lock-
out would be illegal if it is unjustified or if the employer’s actions are disproportionate to the
circumstances. In this case, the court held that the lock-out declared by Express Newspapers was
not justified because it was retaliatory and not in proportion to the workers’ actions.

3. Pratap Press v. Its Workmen (1960): This case dealt with the proportionality of a lock-out.
The Supreme Court held that while employers have the right to declare a lock-out in response to
a strike, the motive and circumstances must be carefully examined. If the lock-out is excessive or
aimed at victimizing workers, it will not be justified.

4. Statesman Ltd. v. Their Workmen (1976): In this case, the court emphasized that a lock-out is
justified only if it is declared for a genuine cause. If it is used as a method of intimidation or
coercion, it would be deemed illegal.

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 c) Lay-off: Lay-off, as per Section 2(kkk), refers to a situation where an employer is
temporarily unable to provide employment to workers due to circumstances beyond their
control, such as a shortage of raw materials, power, or an accumulation of stock.

Under Section 25C, workers who have completed at least 240 days of continuous service in the
previous 12 months are entitled to compensation during the lay-off period. The compensation is
typically 50% of the total wages they would have earned during this period.

For industries employing more than 100 workers, Section 25M stipulates that prior government
approval is necessary before initiating a lay-off. Additionally, a lay-off cannot occur during
conciliation or adjudication proceedings.

In Management of J. K. Hosiery Factory v. Its Workmen (1960), the court held that lay-offs
must be the result of genuine, uncontrollable circumstances, emphasizing that employers must
prove that conditions necessitating a lay-off were beyond their control.

d) Retrenchment: Retrenchment is defined under Section 2(oo) as the termination of an

employee’s service by the employer for reasons other than disciplinary action, voluntary
retirement, or superannuation. Retrenchment typically occurs to reduce surplus
workforce.

Section 25F lays down the conditions for a lawful retrenchment:

- The worker must have served for 240 days in the preceding 12 months.

- The employer is required to give one month’s notice or pay wages in lieu of notice.

- The employer must also provide retrenchment compensation, calculated as 15 days of average
pay for every completed year of service.

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- Additionally, a notice must be sent to the government.

For establishments with over 100 employees, Section 25N mandates prior government approval
before retrenchment.

In the State of Bombay v. Hospital Mazdoor Sabha (1960), the Supreme Court held that
"retrenchment" refers to all forms of termination of employment, except for those specifically
excluded by the definition in Section 2(oo). The Bharat Gold Mines Ltd. v. Regional Labour
Commissioner (1999) case clarified that a termination due to closure does not constitute
retrenchment and does not trigger the need for retrenchment compensation under Section 25F.

e) Closure: Closure, as defined in Section 2(cc), refers to the permanent shutting down of
an establishment or a part of it.

For industries employing less than 100 workers, Section 25FFA requires the employer to provide
a 60-day notice to the government before closing the establishment. For larger establishments,
Section 25-O mandates a 90-day prior approval from the appropriate government authority
before proceeding with a closure. If such approval is not obtained, the closure is considered
illegal.

When closure is approved or justified, Section 25-O(8) stipulates that workers who have been
employed for at least one year are entitled to compensation equivalent to 15 days of average pay
for every year of service.

In Orissa Textile Mills Ltd. v. State of Orissa (2002), the court ruled that employers must
demonstrate financial incapacity or other valid reasons for shutting down an establishment. The
Excel Wear v. Union of India (1978) case highlighted the constitutional right to close a business

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under Article 19(1)(g), while also affirming that this right may be regulated by law in the interest
of workers.

Overview of Key Sections:

1. Strike: Sections 2(q), 22, 23, 24

2. Lay-off: Sections 2(kkk), 25C, 25M

3. Retrenchment: Sections 2(oo), 25F, 25N

4. Closure: Sections 2(cc), 25FFA, 25-O

Conclusion: The Industrial Disputes Act, 1947 provides a comprehensive framework for
addressing key aspects of industrial relations like strikes, layoffs, retrenchment, and closure. By
establishing clear definitions, conditions, and processes for each of these situations, the Act seeks
to balance the needs of industries with the rights and welfare of workers. Various judicial
decisions have further shaped and interpreted these provisions, contributing to the development
of industrial jurisprudence in India.

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 Unit-III

Lecture 2: Unfair Labour Practices, Penalties,

Question 2) What do you understand by Unfair Labour Practices, discuss as mentioned

under Industrial Dispute Act 1947 with relevant sections and case laws with penalties.

Ans: The Industrial Disputes Act, 1947 aims to foster harmony between employers and
employees by regulating their rights and duties. One key area of the Act is the concept of unfair
labour practices, which are certain actions or omissions by employers or workers that violate the
principles of justice and equality in employment relations. To deter such practices, the Act also
prescribes penalties for engaging in unfair labour practices.

Unfair Labour Practices:

Definition and Provisions: The concept of unfair labour practices was introduced into the
Industrial Disputes Act through Section 25T and 25U, following the adoption of
recommendations from the National Commission on Labour.

Definition (Section 2(ra)):

Unfair labour practices are defined as practices listed in the Fifth Schedule of the Act. They are
broadly categorized into two types:

1. On the part of employers and their trade unions.

2. On the part of workmen and their trade unions.

The Fifth Schedule outlines specific unfair labour practices committed by both employers and
workers:

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1. Unfair Labour Practices by Employers or Their Trade Unions (Schedule V, Part I)

Employers or their unions may indulge in unfair labour practices such as:

- Interference with the right to organize: Employers cannot interfere with, dominate, or support
the formation of trade unions. Example: Employers cannot promote a "company union" or
discourage employees from joining an independent union.

- Victimization: Discriminating against employees for participating in union activities or for

exercising legal rights.

- Refusal to bargain in good faith: Refusing to engage in meaningful negotiations with a

recognized trade union.

- Discriminatory actions: For example, not reinstating workers who participated in a legal strike
without valid reasons or discriminating based on union membership.

- Intimidation or coercion: Pressurizing workers to relinquish their right to unionize or

compelling them to participate in strikes against their will.

2. Unfair Labour Practices by Workers or Their Trade Unions (Schedule V, Part II)

Workers and their unions may engage in unfair labour practices such as:

- Coercion or intimidation of non-unionized workers: Pressuring non-members to join unions or

participate in strikes.

- Instigating or supporting illegal strikes: Encouraging or supporting strikes that do not comply
with legal requirements (e.g., no notice, in contravention of an award, etc.).

- Refusal to bargain in good faith: Workers or unions failing to negotiate sincerely with
employers.

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- Boycotting or picketing in a violent or coercive manner: Engaging in violence or coercion
during strikes or protests.

Relevant Case Laws:

- Sham Kant Satyanarayan Kesari v. Standard Coal Co. (1958): This case dealt with
victimization and reinstatement of workers who participated in union activities. The court ruled
that victimization of workers for union involvement constituted unfair labour practices.

- Balmer Lawrie & Co. Ltd. v. Workmen (1964): In this case, the court upheld that employers'
refusal to engage in genuine negotiations with unions amounted to unfair labour practice.

Penalties for Unfair Labour Practices:

The Industrial Disputes Act provides specific penalties for engaging in unfair labour practices,
ensuring that the law is enforced and that violators are held accountable.

Penalties (Section 25U):

Section 25U imposes penalties on employers, workers, or trade unions found guilty of engaging
in unfair labour practices. The prescribed penalty is as follows:

- Any person who commits any unfair labour practice under Section 25T shall be liable to be
punished with:

- Imprisonment for a term which may extend to six months; or

- Fine which may extend to Rs. 1,000; or

- Both imprisonment and fine.

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This penalty applies equally to both employers and workers who engage in unfair practices as
outlined in the Fifth Schedule.

Relevant Case Laws:

- Durgapur Casual Workers Union v. Food Corporation of India (1989): In this case, the
Supreme Court penalized the employer for indulging in unfair labour practices by discriminating
against casual workers in terms of wages and working conditions.

- Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978): This landmark case
dealt with issues related to industrial adjudication and emphasized the need for fairness in labour
practices, though it focused more broadly on the definition of industry under the Industrial
Disputes Act.

Conclusion: The Industrial Disputes Act, 1947, plays a vital role in maintaining industrial peace
by prohibiting unfair labour practices and establishing a fair balance between the rights of
employers and workers. Through Sections 25T and 25U, the Act ensures that unfair practices
like victimization, coercion, and refusal to negotiate are penalized, thereby promoting good faith
negotiations and ensuring just treatment of workers and employers alike. Various judicial
interpretations have further clarified and reinforced the application of these provisions.

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 Unit-III

Lecture 3: Offences by Companies etc.

Question 3) Discuss Offences by Companies under the Industrial Disputes Act, 1947.

Ans: The Industrial Disputes Act, 1947 (IDA) governs industrial relations and disputes between
employers and employees in India. While the Act primarily deals with dispute resolution, strikes,
lock-outs, retrenchment, and related matters, it also addresses offences committed by companies
and the corresponding liabilities for such offences. Specific sections lay down the legal
framework for holding companies and their responsible officials accountable for violations of the
Act.

Section 32: Offences by Companies: Under Section 32 of the Industrial Disputes Act, 1947,
when an offence is committed by a company, the Act clarifies who can be held responsible.
Section 32 reads:

“Where a person committing an offence under this Act is a company or other body corporate, or
an association of persons (whether incorporated or not), every director, manager, secretary,
agent or other officer or person concerned with the management thereof shall, unless he proves
that the offence was committed without his knowledge or that he exercised all due diligence to
prevent the commission of the offence, be deemed to be guilty of such offence.”

This provision essentially states that when an offence is committed by a company or corporate
entity, its responsible officers, such as directors, managers, and others involved in the company’s
management, can be held liable unless they prove their innocence by demonstrating that:

- The offence was committed without their knowledge, or

- They exercised due diligence to prevent the offence.

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The objective of Section 32 is to prevent companies from evading liability by attributing blame
solely to subordinate employees. It holds the top management and decision-makers accountable
for any contravention of the Act by the company.

Key Points under Section 32

1. Liability of Officers: The directors, managers, secretaries, agents, and other officers concerned
with the management of the company are presumed liable for the offence unless they can prove
their innocence.

2. Vicarious Liability: Section 32 introduces the principle of vicarious liability, where an

individual can be held responsible for an offence committed by another (in this case, the
company) due to their position of authority.

3. Defence of Due Diligence: Officers can escape liability if they prove that the offence occurred
without their knowledge or despite taking all necessary precautions (due diligence).

4. Scope of the Section: This section applies to all bodies corporate, including private companies,
public companies, and even associations of individuals (whether incorporated or not). This
ensures comprehensive coverage and prevents any form of escape from liability.

Offences Covered Under Section 32

Offences under the Industrial Disputes Act for which companies and their responsible officials
may be held liable include:

- Illegal lock-outs (Section 24).

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- Non-compliance with awards and settlements (Section 29).

- Failure to pay compensation to retrenched employees (Section 25F).

- Failure to comply with notice requirements for closure, lay-offs, and retrenchment (Section
25FFA, Section 25F, Section 25N).

- Non-adherence to procedures in public utility services (Section 22).

Penalties for Offences by Companies

Section 25Q and Section 31 of the Act outline the penalties for non-compliance:

1. Section 25Q: Penalty for lay-off or retrenchment without following the prescribed procedures.
Companies and individuals in violation can face imprisonment for a term which may extend to
one month, or a fine which may extend to Rs. 1,000, or both.

2. Section 31: Penalty for other offences such as:

- First-time offences: Fine which may extend to Rs. 100.

- Subsequent offences: Fine which may extend to Rs. 200.

- Failure to comply with settlement or award: Fine which may extend to Rs. 5,000.

These penalties ensure that companies and their responsible officers are held accountable for
violating the provisions of the Act.

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Relevant Case Laws

Several judicial rulings have further clarified the application of Section 32 and the liability of
corporate officers for offences under the Industrial Disputes Act.

1. Maharashtra State Road Transport Corporation v. Labour Court, Aurangabad (1970):

In this case, the court held that where an industrial award or settlement is not complied with, the
management of the company, including its directors and officers, can be held liable. The court
emphasized that corporate officers cannot escape liability by claiming ignorance of the
company's violations, especially when they are in a position to prevent such contraventions.

2. Gujarat Electricity Board v. Hind Mazdoor Sabha (1995): In this case, the Supreme Court
held that corporate responsibility must be interpreted broadly to ensure that companies comply
with the provisions of labour laws. The court upheld the liability of top-level management for
offences committed by the company under the Industrial Disputes Act, as they are presumed to
be in charge of the company’s affairs.

3. J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Labour Appellate Tribunal (1963):
This case dealt with the liability of corporate officers in case of non-compliance with an
industrial tribunal’s award. The court held that the onus is on the company’s management to
prove that they exercised due diligence or that the offence occurred without their knowledge. If
this cannot be proven, they are deemed guilty under Section 32.

4. Raghubir Singh v. General Manager, Haryana Roadways (2001): The Supreme Court held
that Section 32 ensures that all persons responsible for the management of a company are held
accountable for offences under the Act unless they can prove the lack of involvement or
knowledge. The case emphasized the importance of due diligence in managing company affairs
related to industrial disputes.

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Defence Available to Officers under Section 32: While Section 32 establishes vicarious liability,
it also provides defences for corporate officers. These defences include:

-Lack of Knowledge: If an officer can prove that the offence was committed without their
knowledge, they can avoid liability. For instance, if the offence was committed by lower-level
employees without the knowledge or involvement of the management.

- Exercise of Due Diligence: Officers can also defend themselves by demonstrating that they
took all reasonable steps to prevent the offence. This means showing that they implemented
policies, procedures, and controls to ensure compliance with the law.

Conclusion: The Industrial Disputes Act, 1947 ensures that companies and their officers are held
accountable for violations of the Act's provisions. Through Section 32, the Act establishes a
mechanism for the prosecution of companies and their management, emphasizing vicarious
liability while also providing defences of due diligence and lack of knowledge. Case law has
reinforced these principles, ensuring that management cannot escape responsibility for offences
committed by the company, and must adhere to the Act's provisions to avoid legal consequences.

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 Unit- III

Lecture 4: Industrial Employment (Standing Order) Act, 1946

Question 4) Discuss (Standing Orders) as mentioned under Industrial Employment Act,

1946

Ans: The Industrial Employment (Standing Orders) Act, 1946 was enacted to regulate the
conditions of employment in industrial establishments in India. The primary purpose of the Act
is to ensure that employers define and communicate the terms of employment clearly to the
workers and to provide a uniform framework for working conditions, rights, and responsibilities
of both employers and employees.

The Act applies to industrial establishments employing 100 or more workers (though some states
have reduced this number) and mandates that every industrial establishment must define and
maintain "standing orders" that outline the employment terms. These standing orders must be
certified by the relevant authorities and made available to the employees.

Key Objectives of the Act

1. Clarity in Terms of Employment: To ensure that employees are made aware of their terms
and conditions of employment.

2. Prevention of Arbitrary Actions: To prevent employers from changing employment terms

unilaterally.

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3. Harmonization: To bring uniformity in employment practices across industries by having a
standardized set of standing orders.

4. Dispute Prevention: By clearly defining rights and duties, the Act aims to reduce industrial
disputes and maintain industrial harmony.

Key Provisions of the Act

1. Applicability (Section 1)

- The Act applies to every industrial establishment employing 100 or more workers.

- State governments have the power to extend the Act to establishments employing fewer
workers.

2. Definition of Standing Orders (Section 2(g))

- Standing orders are rules relating to the terms of employment, such as classification of
workmen, work hours, attendance, misconduct, disciplinary actions, leave, etc.

3. Submission of Draft Standing Orders (Section 3)

- Employers must submit draft standing orders within six months from the date on which the Act
becomes applicable to their establishment.

- The draft standing orders must conform to the Model Standing Orders provided by the
government.

4. Certification of Standing Orders (Section 5)

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- After submission, the draft standing orders are reviewed by the Certifying Officer.

- The Certifying Officer examines whether the standing orders are fair and just and whether they
conform to the Model Standing Orders.

- Both the employer and the employees (through their representatives) can be heard before the
certification.

5. Conditions for Certification (Section 4)

- Standing orders must be fair and reasonable.

- They must address all matters specified in the schedule of the Act.

- The schedule includes areas such as:

- Classification of workers (permanent, temporary, probationers).

- Manner of providing working hours, holidays, and overtime.

- Conditions for termination, suspension, or dismissal.

- Procedures for addressing misconduct and taking disciplinary actions.

6. Appeals (Section 6)

- If any party (employer or employee) is dissatisfied with the certified standing orders, they may
appeal to the Appellate Authority within 30 days of certification.

- The decision of the Appellate Authority is final and binding.

7. Modification of Standing Orders (Section 10)

- Employers or workers may apply for modifications to the standing orders.

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- Modifications can only be made after approval from the Certifying Officer.

- Standing orders must be modified when there are changes in the nature of work or employment
conditions.

8. Duration and Validity (Section 7)

- Once certified, standing orders come into effect within 30 days of certification.

- The standing orders remain in force until they are modified through a legal process.

9. Posting of Standing Orders (Section 9)

- Certified standing orders must be prominently displayed in the establishment in the language
understood by the majority of the workers.

10. Penalties (Section 13)

- Fines for contraventions of the Act range from Rs. 100 to Rs. 5,000, depending on the nature
of the offence.

Model Standing Orders

The Act provides Model Standing Orders that serve as guidelines for drafting standing orders.
Employers are required to follow these models, ensuring that there is standardization across
industries regarding employment terms. Some areas covered by the Model Standing Orders
include:

- Classification of workers (permanent, temporary, probationers).

- Conditions for termination, suspension, or dismissal.

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- Procedures for addressing misconduct and taking disciplinary action.

- Leave and holiday entitlements.

Relevant Case Laws

1. Associated Cement Companies Ltd. v. Their Workmen (1960): In this landmark case, the
Supreme Court of India ruled that standing orders form part of the contract of employment. The
standing orders cannot be unilaterally altered by the employer, and any modification or variation
must comply with the provisions of the Industrial Employment (Standing Orders) Act.

2. Rajasthan State Road Transport Corporation v. Krishna Kant (1995): The Supreme
Court held that the Industrial Employment (Standing Orders) Act prevails over other laws, such
as the Contract Act, in cases of service conditions. Standing orders certified under the Act
govern the relationship between the employer and the employee and supersede any inconsistent
contract terms between the employer and individual employees.

3. U.P. State Electricity Board v. Hari Shankar Jain (1978): In this case, the Supreme Court
emphasized that standing orders are statutory and binding. The employer cannot bypass the
certified standing orders, and the terms of employment must strictly adhere to the standing orders
certified under the Act. The case reinforced that the standing orders must be followed in matters
like suspension, dismissal, and punishment.

4. Glaxo Laboratories (I) Ltd. v. Presiding Officer, Labour Court, Meerut (1984): The
Supreme Court held that the certification process of standing orders provides a fair balance
between the interests of employers and workers. The Court reiterated that certified standing
orders cannot be arbitrarily altered by the employer and that due process is essential for any
modification or alteration.

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Conclusion: The Industrial Employment (Standing Orders) Act, 1946 is a significant piece of
legislation that ensures transparency and fairness in industrial employment. It mandates that the
terms and conditions of employment are clearly defined and communicated to employees
through certified standing orders, which help reduce disputes and establish a consistent legal
framework for industrial relations.

This Act provides an essential regulatory mechanism by establishing a structured relationship

between the employer and the employee. The requirement for standardized standing orders,
along with the procedures for their modification and certification, contributes to promoting
industrial harmony and ensuring that employees are aware of their rights and obligations. The
interpretation and implementation of the Act through various case laws further strengthens its
role in fostering a fair industrial environment in India.

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