Evaluer.

Simplifying Human Resource Documentation

The Industrial Employment

(Standing Orders) Act, 1946
Practical Compliance
Reference

Handbook

In this handbook we will

Evaluer on address the following:
 What the Standing Orders Act
Employment Law means.

 Registers to be maintained by an
establishment.

 Checklist and dos and don’ts for

an establishment.
Evaluer. Simplifying Human Resource Documentation

There are various labour legislations that disregard the

concept of private contract of service between an employer
and employee. Standing Order Act is one of them. The
Standing Orders Act provides for provision to define the
contract of service between an employer and employee. The
scheme of the Standing Order Act requires an employer to
formally define the conditions of employment for workmen.
In other words, define in writing the conditions of service
and rule of discipline under which workers have to work. In
fact, it is a statuary contract of service between the
employer and employee. An employer cannot enter into an
agreement with a workman which is inconsistent with the
The Industrial Employment
Standing Order. The terms of the standing orders will prevail
Standing Order Act, 1946
over the corresponding terms in the contract of service. An
(“Standing Order Act”)
employer additionally cannot enforce simultaneously the
standing orders regulating the classification of workmen and
a special agreement with an individual workman settling his
categorization. Provisions of certified standing orders and
the terms specified, become service conditions of the
workmen.
It is mandatory for the employer to get standing orders
certified. In case an employer fails to get the standing orders
certified, the model standing orders (define model standing
order) will be applicable. It is therefore advisable that
instead of applying the model standing orders, an employer
should get the standing orders certified.
Evaluer. Simplifying Human Resource Documentation

1.1 SALIENT FEATURES OF THE STANDING ORDERS ACT

1.1.1 APPLICABILITY OF THE STANDING ORDER ACT

The Standing Order Act applies to every industrial establishment wherein 100 (hundred) or
more workmen are employed or were employed in the preceding 12 (twelve) months. Once
the Standing Order Act becomes applicable to an establishment it does not cease to apply
due to subsequent fall in the number of workmen in the establishment.

1.1.2 WORKMAN UNDER THE STANDING ORDER ACT

It’s important to note that the Standing Order Act and subsequent certification of standing
orders apply only to workmen of an organization, not to its employees. The term workman
has not been defined in the Standing Order Act itself, but it has been adopted from clause (s)
of section 2 of Industrial Dispute Act, 1947. Accordingly a workman means:
“Any person (including an apprentice) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or
reward, whether the terms of employment be express or implied, and for the
purposes of any proceeding under this Act in relation to an industrial dispute, includes
any such person who has been dismissed, discharged or retrenched in connection
with, or as a consequence of, that dispute, or whose dismissal, discharge or
retrenchment has led to that dispute, but does not include any such person: i) who is
subject to the Air Force Act, 1950 (45 of 1950),or the Army Act, 1950 (46 of 1950), or
the Navy Act, 1957 (62 of 1957); or ii) who is employed in the police service or as an
officer or other employee of a prison; or iii) who is employed mainly in a managerial
or administrative capacity; or iv) who, being employed in a supervisory capacity,
exercises, either by the nature of the duties attached to the office or by reason of the
powers vested in him, functions mainly of a managerial nature.”

1.1.3 CERTIFICATION OF DRAFT STANDING ORDERS

Evaluer. Simplifying Human Resource Documentation

After having prepared the draft standing orders, the next step is to get the same certified by
the concerned certifying officer1 by submitting the same within six months from the date on
which the Standing Order Act becomes applicable. An employer is required to submit to the
certifying officer, five copies of the draft standing orders for certification.
1.1.4 TEMPORARY APPLICATION OF MODEL STANDING ORDERS
During the interim period between the applicability of the Standing Orders Act to an
establishment and certification of standing orders, the model standing orders shall be
deemed to be adopted in the establishment. This is an interim measure until the standing
orders are finally certified.

1.1.5 DATE OF OPERATION OF STANDING ORDERS

Standing orders shall, unless an appeal is preferred under section 6 of the Standing Order
Act, come into operation on the expiry of 30 (thirty) days from the date on which
authenticated copies thereof are sent to the employer.

1.1.6 DURATION AND MODIFICATION OF STANDING ORDER

i. Standing orders finally certified by the certifying officer shall not be liable to modification,
except by an agreement between the employer and workmen to the contrary, until the
expiry of six months from the date on which the standing orders or the last modification
came into operation.
ii. An employer or workman or a trade union or other representative body of the workman
may apply to the certifying officer to have the standing orders modified and such application
shall be accompanied by five copies of the modifications proposed to be made.

1.1.7 INCONSISTENCE BETWEEN CONTRACT OF EMPLOYMENT AND CERTIFIED STANDING

ORDERS – LATTER WILL PREVAIL
On the question as to whether the provision contained in the certified standing orders will
prevail in case of its conflict with the terms and conditions contained in the contract of
employment, i.e appointment letter, it is necessary to bear in mind that certified standing
orders framed under the Standing Orders Act, and once the standing orders are framed by

1 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 the Standing Order Act.
Evaluer. Simplifying Human Resource Documentation

the employer and certified, they have the force of law. As against them conditions of service
contained in the letter of appointment or contract of employment do not have statutory
force. When there is conflict between a provision of law or an instrument having the force of
law and the contract entered into between the parties, the former will prevail. Certified
standing orders become conditions of service2. In other words when the terms and
conditions of employment as contained in the letter of appointment or contract of
employment are inconsistent with the certified standing order then those as contained in
the standing order would prevail.

1.7.8 DISPLAY OF STANDING ORDER

Text of the standing orders as finally certified shall be prominently posted by the employer
in English and in the language understood by the majority of his workmen near the entrance
through which the majority of workmen enter the industrial establishment and in all
departments where the workmen are employed.

1.7.9 PAYMENT OF SUBSISTENCE ALLOWANCE

Where any workman is suspended3 pending investigation or inquiry into complaints or
charges of misconduct against him, it is mandatory for the employer to pay to such workman
subsistence allowance at the following rates:
i. First 90 (ninety) days: at the rate of 50% (percentage fifty) of the wages which the workman
was entitled to immediately preceding the date of such suspension; and
ii. 91 (ninety one) to 180 (one hundred eighty) days: at the rate of 75% (percentage seventy
five) of such wages of suspension if the delay in the completion of disciplinary proceedings
against such workman is not directly attributable to the conduct of such workman.
Virtually the order of suspension does not put an end to a workman’s service though he is
not permitted to work and is paid only substance allowance which is less than is salary. This
reduced rate of salary constitutes subsistence allowance.

1.7.10 PROCEDURE FOR CERTIFICATION OF STANDING ORDERS

2Sudhir Chandra Sarkar vs. Tata Iron and Steel Co. Limited (1984) 3 SCC 369
3 The term suspension means ‘the act of debarring’ for a time being. It is temporary deprivation of office, but by reason of
suspension, the person does not lose his office nor does he suffer any degradation.
Evaluer. Simplifying Human Resource Documentation

i. On receipt of the draft standing orders, 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, for their comments and objections, if any,
with a notice in form II.
ii. After giving the employer and representatives of workmen 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 order certifiable, and
shall make an order in writing accordingly.
iii. The certifying officer shall, thereupon, certify the draft standing orders, after making any
modifications therein which may be required and shall, within seven days thereafter, send
copies of the certified standing orders authenticated to the employer and representatives of
workmen.

1.7.11 PENALTY
If an employer fails to submit draft standing orders as required by Section 3, or who modifies
his standing orders otherwise than in accordance with Section 10 of the Standing Order Act,
shall be punishable with fine which may extend to Rs 5,000 (five thousand), and in the case
of a continuing offence with a further fine which may extend to Rs 200 (two hundred) for
every day after the first during which the offence continues. If the establishment does any
act in contravention of the standing orders finally certified under this Act, the employer shall
be punishable with fine which may extend to Rs 100 (One hundred), and in the case of a
continuing offence with a further fine which may extend to Rs 25 (twenty five) for every day
after the first during which the offence continues.
1.8 FORMS TO BE PREPARED AND MAINTAINED BY AN ESTABLISHMENT

S. NO. COMPLIANCE REQUIREMENTS SOURCE RESPONSIBILITY FOR

VERIFICATION SUBMISSION

FORMS AND RECORDS

Evaluer. Simplifying Human Resource Documentation

1. Form I shall be submitted along with Form I Establishment

five copies of draft standing orders
proposed to be adopted by the
Establishment.

(Section 3)

2. Notice of discontinuance/restarting of a Form IV A Establishment

shift working to be given by the
Company.

(Standing Order 7-A of Schedule I)

3. Service Card: The Establishment shall Form V Establishment
maintain a service card in respect of
each workman, wherein particulars of
that workman shall be recorded and
duly attested by an officer authorized in
this behalf.

(Standing Order 1, Schedule I-B)

4. Notice: The certifying officer shall Form II Certifying officer
forward the aforesaid draft standing
orders to the workmen for comments
etc along with a notice in form II.

(Section 5 and Rule 6)

5. Register of standing orders: A copy of Form III Certifying officer

all standing orders as finally certified
shall be filed by the certifying officer in
a register in form III and the certifying
officer shall furnish a copy thereof to
any person applying thereof on
payment of the prescribed fee.

(Section 8 and Rule 8)

Appeal for change / correction in draft Form IV Concerned worker(s)

standing order.

[Rule 7 a (1)]

1.9 MATTERS TO BE PROVIDED IN THE STANDING ORDER

Evaluer. Simplifying Human Resource Documentation

i. Classification of workmen, e.g. whether permanent, temporary, apprentices, probationers,

or badlis.
ii. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage
rates.
iii. Shift working.
iv. Attendance and late coming.
v. Conditions of procedure in applying for, and the authority which may grant, leave and
holidays.
vi. Requirement to enter premises by certain gates, and liability to search.
vii. Closing and re-opening of sections of the industrial establishment, and temporary stoppages
of work and the rights and liabilities of the employer and workmen arising there from.
viii. Termination of employment, and the notice thereof to be given by employer and workmen.
ix. Suspension or dismissal for misconduct, and acts or omissions, which constitute misconduct.
x. Means of redress for workmen against unfair treatment or wrongful exactions by the
employer or his agents or servants.
xi. Any other matter, which may be prescribed.
Evaluer. Simplifying Human Resource Documentation

For further information please contact:

info@evaluer.co.in

Disclaimer:

This handbook is not an advertisement or any form of solicitation. This

handbook has been compiled for general information of the public and does

not constitute professional guidance or legal opinion. Readers should

obtain appropriate professional advice.

Simplifying Human Resource Documentation

Delhi | Bangalore | Chandigarh