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An Inside Look At – Industrial Employment (Standing Orders) Act

Every employer subject to the Industrial Employment (Standing Orders) Act is required to have standing orders certified by submitting five proposal copies of the standing orders to the certifying officer, who may be a labour commissioner or a regional labour commissioner or any other officer who has authority under Act as the case may be.

Industrial Employment (Standing Orders) Act: An Overview

Prior to 1946,  workers were employed on the basis of uncertain and ambiguous terms of employment. The Act was designed as a simple response to this predicament, to bring about uniformity in the employment terms deployed in industrial settings in order to protect the Indian labour force.

The following are the objectives of the Industrial Employment (Standing Orders) Act:

  • To promote industrial peace and concord by advocating for fair labour practices.
  • To equip workers, factories, and working relationships with regular standing orders.
  • To ensure that employees understand the terms and conditions of their employment with the aim of reducing the exploitation of workers.

The Act’s model standing orders apply to an industrial establishment from the time the IESO Act becomes applicable to such establishments until the establishment’s standing orders are officially certified.

Applicability of the Industrial Employment (Standing Orders) Act

According to Section 1 of the Act, industrial establishments (within India) employing more than 100 workers at any given time or as noted on any day the previous year are subject to its provisions unless the appropriate Government makes an exception for any such industrial establishment employing fewer than 100 workers.

Nevertheless, certain industrial facilities have been exempted from its application:

  • If not controlled by the Central Government, Section 1(4) excludes facilities to whom Chapter VII of the BIRA or MPIESOA applies.
  • The establishments covered by the Fundamental & Supplementary Rules, various Civil Services Rules, or any other rules issued by the ‘relevant appropriate Government’  are not included as per Section 13-B.
  • The establishments under the administration of the States of Gujarat and Maharashtra are exempt from the stipulations under Sections 10 and 12-A(1).

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Scope of the Industrial Employment (Standing Orders) Act

According to Section 2(g) of the Act, ‘standing orders’ are the regulations pertaining to the issues listed in the Schedule, i.e.

  • Workmen classification into categories such as permanent, temporary, on probation, etc.
  • Manner of intimating workers about wages, working hours, holidays, etc
  • Procedure pertaining to leaves, shift working, temporary stoppages of work, termination of employment, and the notice period.
  • The misconduct-related mechanism, as well as the consequences.
  • Employee grievance redressal system 
  • Employee attendance tracking system
  • Manner maintaining workmen records and information etc.

Requirements Under the Industrial Employment (Standing Orders) Act

Certified standing orders are communicated within thirty days of the application. Unless there is an agreement between the employer and workers to the contrary, these standing orders are not subject to modification for six months from the day the standing orders or the last update went into force.

An employer or workers, or a trade union or other worker representative body, may apply to the certifying officer to change the standing orders, and such application must be accompanied by five copies of the proposed amendments.

Procedure for Certification of Standing Orders

Step 1: Once the draft standing orders are submitted, the certifying officer will send a copy to the trade union, along with a Form-11 notice, if applicable. In the absence of such a trade union, the Certifying Officer will elect three representatives from among the workers or authorize any officer in the workplace to do so and will provide them with a copy of the notice in Form-II.

Step 2: Any employer, workmen, trade union, or other specified representatives of any workman who is dissatisfied with the standing order may approach the certifying authority.

Step 3: Following the hearing, the Certifying Officer will make any required revisions to the draft standing order and certify it, and within seven days, copies of the authenticated standing order will be handed to the employer and the trade union or the specified workers’ representatives.

Step 4: Any employer, workmen, trade union, or other specified representatives of any workman who is dissatisfied with the Certifying Officer’s order may file an appeal in Form-IV in quadruplicate with the Appellate Authority within thirty days of the date on which copies of the certified standing orders are sent.

Step 5: The Appellate Authority will continue and provide a final ruling on the appeal petition after providing the appellant with a chance to be heard. His judgments will then be considered binding.

The Takeaway 

If a company fails to provide its standing orders or alters its standing orders without approval, the compliance officer may punish the company with a fine above ₹5,000 and, if the violation persists, a fine of more than ₹200 (two hundred) per day will be levied until the violation is remedied.

Moreover, if an establishment violates any standing orders after receiving certification under this Act, the employer shall be held liable for a fine of more than  ₹100, and in the event that the infringement persists, a fine of  ₹25 per day is levied.

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