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Report on the Working of the Industrial Employment (Standing

Orders) Act, 1946 for the year 2008

1. Scope and Objectives

1.1 The Industrial Employment (Standing Orders) Act, 1946 came into force on
April 23, 1946. The Act applies to the whole of India. It was initially made applicable
to only those industrial units/undertakings/establishments wherein 100 or more
workers were employed on any day of the preceding 12 months. Subsequently, the
Act was amended in 1961, 1963 and 1982. The Act empowers the appropriate
Governments to extend the provisions of this Act to establishments employing less
than 100 workers after giving not less than two months’ notice, of its intention to do
so, in the official gazette. The Act applies to all the Industrial Establishments as
defined in clause (II) of Section 2 of the Payment of Wages Act, 1936; Factories as
defined in clause (II) of Section 2 of the Factories Act, 1948; the Railways as defined
in the Indian Railways Act, 1890 and Establishment of a contractor who employs
workmen for the purpose of fulfilling the contract with the owner of any Industrial
Establishment. The Act does not, however, apply to workmen who are governed by
the Fundamental and Supplementary Rules, Civil Service Temporary Service
Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules
or the Indian Railways Establishments Code or any other rules or regulations that may
be notified in this behalf by the appropriate Government. The provisions of the Act
also apply to newspaper establishments wherein 20 or more employees are employed
by virtue of the enforcement of the Working Journalists (Conditions of Service and
Miscellaneous Provisions) Act, 1955.

1.2 The main objectives of the Act, besides maintaining harmonious relationship
between the employers and the employees, are to regulate the conditions of
recruitment, discharge, disciplinary action, leave, holidays, etc. of the workers
employed in industrial establishments. The Act amended in 1982 also provides for
payment of subsistence allowance to the workmen who are kept under suspension
pending domestic enquiry. The rules regarding payment of subsistence allowance to
the suspended workmen were further amended by a notification in 1984 facilitating
payment during the suspension period, the subsistence allowance at the rate of 50 per
cent of the wages, which he was entitled to, immediately preceding the date of
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suspension, for the first 90 days and 75 per cent of such wages for the remaining
period of suspension, if the delay in completion of the disciplinary proceedings is not
directly attributable to his conduct. The employer shall normally complete the enquiry
within 10 days and the payment of subsistence allowance shall also be subject to the
workman not taking any employment elsewhere during the period of suspension.

1.3 By virtue of the definition of “Appropriate Government” under Section 2 (b)

of the Act, the following categories of industrial establishments fall within the
purview of the Central Government for the purpose of the Act and the rest coming
under the jurisdiction of the respective State Governments:
(i) Railways;
(ii) Mines and Quarries;
(iii) Oil fields;
(iv) Industrial Establishments in Major Ports;
(v) Establishments under the control of the Central Government such as
Central Public Sector Companies and Corporations; and
(vi) Industrial Establishments run departmentally by the Central
Government, e.g., Post and Telegraph Workshops, Government of
India Presses, Mints, Central Public Works Departments, etc.

2. Main Provisions
The main provisions of the Act relate to:-
(i) procedure for submission of draft Standing Orders;
(ii) conditions for certification;
(iii) date of operation and display of these Orders;
(iv) procedure for modification; and
(v) machinery for the implementation of the Act.

3. Procedure for Certification of the Standing Orders

3.1 Section 3 of the Act provides that within 6 months from the date on which the
Act becomes applicable to an industrial establishment, the employer shall submit to
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the Certifying Officer, 5 copies of the draft Standing Orders proposed by him for
adoption in his industrial establishment. It further provides that provision shall be
made in such draft for every matter set out in the Schedule applicable to the
establishment and shall be, as far as practicable, in conformity with the Model
Standing Orders applicable to the establishment. Therefore, the draft Standing Orders
should normally provide for the following matters:
(i) Classification of Workmen, i.e., Permanent, Temporary, Apprentices,
Probationers or Badlis;
(ii) Manner of intimating to workmen the 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 therefrom;
(viii) Termination of employment and the notice thereof to be given by
employer to workmen;
(ix) Suspension or dismissal for misconduct and acts of omission which
constitute misconduct;
(x) Means of redressal for workmen against unfair treatment or wrongful
action by the employer or his agents or servants; and
(xi) Any other matter, which may be prescribed from time to time.

3.2 On receipt of the draft, the Certifying Officer shall initiate to certify the
Standing Orders in accordance with the procedure laid down in Section 5 of the Act
which, inter-alia, provides that all the registered trade unions, and in the absence of
the registered trade unions, five elected representatives of the workmen, shall be given
an opportunity to raise objections to the proposed draft Standing Orders. The
Certifying Officer is also required to ensure that provision is made in the Standing
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Orders for every matter set out in the Schedule applicable to the industrial
establishment and the Standing Orders are in conformity with the provisions of the
Act. For this purpose, the Certifying Officer shall adjudicate upon the fairness or
reasonableness of the Standing Orders and shall then certify them and send,
authenticated copies together with the orders referred to above, to the parties within 7
days from the date of his orders. The Certified Standing Orders become enforceable
on the expiry of 30 days from the date on which the authenticated copies of the same
are sent to the parties provided no appeal has been preferred against them. Certifying
Officers and appellate authorities have been vested with powers of Civil Courts for
the purpose of receiving evidence, administering oath, enforcing the attendance of
witnesses and compelling the discovery and production of documents and are deemed
to be civil courts within the meaning of Sections 345 and 346 of the Code of Criminal
Procedure, 1973 (2) of 1974.

4. Modification of Standing Orders

4.1 Under Section 10 of the Act the provision exists for modification of the
Certified Standing Orders. The Standing Orders can be modified even before expiry
of the prescribed time limit of 30 days provided both the management and its
workmen agree for it. The employer or the workmen desiring the change can make
application for modification to the Certifying Officer. The procedure for submission
of application for modification is the same as for initial certification under the Act.
When it is proposed to make modifications by agreement between the employer and
workmen, a certified copy of that agreement has also to be filed along with
application for modification.

5. Enforcement of the Act during 2008

5.1 The Act makes provision for appointment of Inspectors for its strict
enforcement. The following offences are punishable under Section 18 of the Act and
the Central Industrial Relations Machinery is to take suitable action wherever
infringements of the provisions come to their notice:
(i) Failures on the part of an employer to submit draft Standing Orders as
per the requirement under Section 3 of the Act.
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(ii) Modification by employer of the Certified Standing Orders otherwise

than in accordance with the prescribed procedure, and
(iii) Any action of the employer, which is in contravention of the provisions
of the Certified Standing Orders.
5.2 Sphere-wise and State-wise details of establishments coming within the
purview of the Industrial Employment (Standing Orders) Act, 1946 along with the
progress of Certification / Modification of Standing Orders during the years 2007 and
2008 are given in Table – I. The analysis of the Table – I reveals that in the State
Sphere the percentage of establishments having certified Standing Orders in respect of
all or a group of employees at the end of year out of the total number of
establishments covered under the Act shows a decline from 35.63 per cent in 2007 to
33.22 per cent in 2008. Similarly, the number of workers employed in these
establishments out of total number of workers employed in the establishments
covered under the Act also declined from 54.93 per cent to 50.19 per cent.
5.3 The number of Industrial Establishments coming under the purview of the
Industrial Employment (Standing Orders) Act of 1946 and workers employed therein
during the year 2008 are presented in Table-II. During this year, 51,639
establishments, employing 64,63,201 workers were under the purview of the
Industrial Employment (Standing Orders) Act, 1946 in the States which submitted the
returns. Out of these 16,241 (31.45%) establishments employing 33,05,260 (51.14%)
workers were having certified Standing Orders in respect of all or only a group of
employees. The applications of 2,318 establishments were pending for certification
of Standing Orders with the concerned Authorities at the beginning of 2008. During
the year 891 applications were received and 873 applications were disposed of. At
the end of the year 2,336 applications were pending with the concerned Certifying
Officers. At the end of the year 17,152 (33.22%) establishments employing
32,43,740 (50.19%) workers were having certified Standing Orders in respect of all or
only a group of employees.
5.4 Table – II shows that in the State of Punjab maximum number of applications
for certification i.e. 715 (30.85 per cent) were pending at the commencement of the
year followed by Assam 405 (17.47 per cent), West Bengal 317 (13.68 per cent),
Himachal Pradesh 160 (6.90 per cent) and Haryana 132 (5.69 per cent). During the
year 2008 maximum number of applications for certification i.e. 417 (46.80 per cent)
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were received in the state of Tamil Nadu followed by Uttarakhand 107 (12.01 per
cent) and Haryana 97 (10.89 per cent). Out of these applications the maximum i.e.
485 (55.56 per cent) were disposed of in the State of Tamil Nadu followed by
Haryana 148 (16.95 per cent) and Uttarakhand 91 (10.42 per cent). At the end of the
year, 2008 the state of Tamil Nadu had the maximum number of establishments
having Certified Standing Orders i.e. 7,120 (41.51 per cent) followed by West Bengal
1,815 (10.58 per cent), Punjab 1,388 (8.09 per cent) and Haryana 1,316 (7.67 per
cent). However, the number of employees covered were highest in West Bengal i.e.
8,63,489 (26.62 per cent) followed by Tamil Nadu 7,15,327 (22.05 per cent), Assam
4,63,763 (14.30 per cent), Punjab 2,40,515 (7.41 per cent) and Haryana 2,10,459
(6.49 per cent).

5.5 Table – III reveals that during the year 2008 out of 126 applications for
modification of Standing Orders (89 from previous year and 37 received during 2008)
50 applications were disposed of. The State of West Bengal alone disposed of 22
applications. Similarly, out of 28 appeals (all 28 from previous year and no appeals
received during the current year) against the orders of Certifying Officers, 9 appeals
in the states of West Bengal and Uttarakhand were disposed of during the year 2008.

6. Limitations of Statistics
6.1 The present review is based on the annual returns received under the Act from
various States and Union Territories. It does not include data pertaining to States
of Chhattisgarh, Delhi (NCT), Gujarat, Jharkhand, Uttar Pradesh, Union
Territory of Andaman & Nicobar Islands and C.L.C. (Central) which have not
submitted the returns. The data received from the States of Karnataka and Madhya
Pradesh are incomplete and thus it could not be taken into account. The Act has not
been enforced in the States of Mizoram, Nagaland, Sikkim and Union Territories of
Dadra & Nagar Haveli, Daman & Diu and Lakshadweep. The exact comparison over
years is not possible as different States and Union Territories have submitted the
returns in these years.
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Table – I

Sphere-wise Progress of Certification / Modification of Standing Orders during the

years 2007 and 2008

Item Sphere Year Percentage

State/ 2007 2008 Increase or
Central Decrease
1 2 3 4 5
1 No. of Establishments State 46489 51639 +11.08
covered under the Act Central .. .. ..
Total 46489 51639 +11.08
2 No. of workers employed State 6286411 6463201 +2.81
in the Establishments Central .. .. ..
covered under the Act
Total 6286411 6463201 +2.81
3 No. of Establishments State 16565 17152 +3.54
having Certified (35.63%) (33.22%)
Standing Orders at the
end of the year Central .. .. ..
Total 16565 17152 +3.54
(35.63%) (33.22%)
4 No. of workers employed State 3453289 3243740 -6.07
in establishments having (54.93%) (50.19%)
Certified Standing
Orders at the end of the Central .. .. ..
year Total 3453289 3243740 -6.07
(54.93%) (50.19%)
5 No. of applications State 2367 2336 -1.31
pending for certification Central .. .. ..
at the end of the year
Total 2367 2336 -1.31
6 No. of applications State 88 76 -13.64
pending for modification Central .. .. ..
of Standing Orders at the
end of the year Total 88 76 -13.64
7 No. of appeals pending State 26 19 -26.92
against orders of Central .. .. ..
Certifying Officers at the
end of the year Total 26 19 -26.92

.. = Not available due to non-receipt of information

Note. 1. Figures in brackets against items 3 & 4 indicate percentages to corresponding

figures against items 1 & 2 respectively.
. 2. Percentage increase or decrease in case of Central Sphere totals could not be
worked out due to the non- availability of information for the years 2007 and 2008.
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Table – II
State-wise progress of Certification of Standing Orders during 2008
Establishments Establishments having Number of applications for certification Establishments
coming within the Certified Standing either for all or any group of employees having certified
purview of the Orders in respect of all or in respect of establishments (i) which had Standing Orders in
Industrial only a group of Standing Orders only for a group or respect of all or
Employment employees at the groups of employees (ii) which had no only a group of
(Standing Orders) beginning of the year certified Standing Orders employees at the
Act end of the year
State/Union Territory

Received during the

employees covered

employees covered

employees covered
Disposed of during

Pending at the end

commencement of
Pending at the
Number of

Number of

Number of
of the year
Number

Number

Number
the year

the year
year
1 2 3 4 5 6 7 8 9 10 11
1 Andhra Pradesh 4103 421749 900 143691 34 39 33 40 954 154894
(1.47) (4.38) (3.78) (5.56) (4.78)
2 Arunachal Pradesh - - - - - - - - - -
3 Assam 1575 515326 1140 464553 405 10 11 404 1166 463763
(17.47) (1.12) (1.26) (6.80) (14.30)
4 Bihar 72 19493 72 19493 - - - - 72 19493
(0.47) (0.82)
5 Goa 1971 108747 203 15734 46 9 1 54 204 15932
(1.98) (1.01) (0.11) (1.19) (0.49)
6 Haryana 5124 579792 1168 201569 132 97 148 81 1316 210459
(5.69) (10.89) (16.95) (7.67) (6.49)
7 Himachal Pradesh 1263 164005 182 22739 160 53 14 199 196 25213
(6.90) (5.95) (1.60) (1.14) (0.78)
8 Jammu & Kashmir 60 11746 59 11636 5 1 2 4 60 11746
(0.22) (0.11) (0.23) (0.35) (0.36)
9 Kerala 1516 258346 688 99362 57 22 27 52 713 90975
(2.46) (2.47) (3.09) (4.16) (2.80)
10 Maharashtra 2845 694386 435 87252 64 9 2 71 437 88304
(2.76) (1.01) (0.23) (2.55) (2.72)
11 Manipur - - - - - - - - - -
12 Meghalaya 5 640 - - - - - - 5 640
(0.03) (0.02)
13 Orissa 536 96242 237 57387 83 23 16 90 253 60297
(3.58) (2.58) (1.83) (1.48) (1.86)
14 Punjab 9589 514305 1371 237099 715 75 17 773 1388 240515
(30.85) (8.42) (1.95) (8.09) (7.41)
15 Rajasthan 2986 415089 904 196215 35 8 13 30 917 198213
(1.51) (0.90) (1.49) (5.35) (6.11)
16 Tamil Nadu 16955 1448862 6635 814708 129 417 485 61 7120 715327
(5.57) (46.80) (55.56) (41.51) (22.05)
17 Tripura 98 20480 63 14120 - - - - 63 14120
(0.37) (0.44)
18 Uttarakhand 492 52055 266 28198 105 107 91 121 357 41367
(4.53) (12.01) (10.42) (2.08) (1.28)
19 West Bengal 2122 1099976 1804 862797 317 17 11 323 1815 863489
(13.68) (1.91) (1.26) (10.58) (26.62)
20 Chandigarh 228 13690 61 7375 2 - - 2 61 7375
(0.09) (0.36) (0.23)
21 Puducherry 99 28272 53 21332 29 4 2 31 55 21618
(1.25) (0.45) (0.23) (0.32) (0.67)
Total State Sphere 51639 6463201 16241 3305260 2318 891 873 2336 17152 3243740
Undertakings (100.00) (100.00) (100.00) (100.00) (100.00)
Total Central Sphere .. .. .. .. .. .. .. .. .. ..
Undertakings
Grand Total 51639 6463201 16241 3305260 2318 891 873 2336 17152 3243740
(31.45) (51.14) (33.22) (50.19 )
- = Nil .. = Not Available due to non-receipt of information
NOTE: 1.Figures in brackets are percentages to total.
2. Percentages in brackets of Grand Total in cols. 4 and 5 as well as cols. 10 and 11 are with reference to cols. 2 and 3.
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Table – III

State-wise progress of Modification of Standing Orders and disposal of appeals during 2008
Number of applications for Number of appeals against the
modification of Standing Orders orders of Certifying Officers

Disposed of during

Disposed of during
Pending at the end

Pending at the end

commencement of

commencement of
Received during

Received during
Pending at the

Pending at the
State/Union Territory

of the year

of the year
the year

the year

the year

the year

the year

the year
1 2 3 4 5 6 7 8 9
1 Andhra Pradesh - 1 1 - - - - -
2 Arunachal Pradesh - - - - - - - -
3 Assam - - - - - - - -
4 Bihar - - - - - - - -
5 Goa - - - - - - - -
6 Haryana - - - - - - - -
7 Himachal Pradesh 2 8 8 2 1 - - 1
8 Jammu & Kashmir - - - - - - - -
9 Kerala 8 8 5 11 5 - - 5
10 Maharashtra 27 15 11 31 1 - - 1
11 Manipur - - - - - - - -
12 Meghalaya - - - - - - - -
13 Orissa 3 - - 3 2 - - 2
14 Punjab - - - - - - - -
15 Rajasthan 6 3 3 6 8 - - 8
16 Tamil Nadu - 1 - 1 2 - - 2
17 Tripura - - - - - - - -
18 Uttarakhand - 1 - 1 2 - 2 -
19 West Bengal 43 - 22 21 7 - 7 -
20 Chandigarh - - - - - - - -
21 Puducherry .. .. .. .. .. .. .. ..
Total State Sphere Undertakings 89 37 50 76 28 - 9 19
Total Central Sphere Undertakings .. .. .. .. .. .. .. ..
Grand Total 89 37 50 76 28 - 9 19
- = Nil
.. = Not Available due to non-receipt of information