Short 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

a) Strike

A strike, as per Section 2(q), is the cessation of work by a group of workers to express
grievances or demands. Conditions for Lawfulness:

- Workers must give 14 days' notice before striking in public utility services (Section 22).

- Strikes are prohibited during conciliation or adjudication proceedings (Section 23) and if they
violate existing settlements (Section 24).

Key Case Laws:

- T.K. Rangarajan v. Government of Tamil Nadu (2003): Government employees do not have a
constitutional right to strike.

- Indian General Navigation & Railway Co. Ltd. v. Their Workmen (1960): Justified strikes must
be reasonable and proportionate.

b) Lock-out

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A lock-out (Section 2(l)) is an employer's action to temporarily close a workplace or refuse to
employ workers, usually in response to a strike. Legal Provisions:

1. Public Utility Services: Lock-outs require 14 days' notice and cannot occur during conciliation
(Section 22).

2. General Provisions: Lock-outs are prohibited during ongoing proceedings (Section 23) and are
illegal if against existing settlements (Section 24).

Key Case Laws:

- Management of Kairbetta Estate v. Rajamanickam (1960): Lock-outs are valid if they follow
statutory requirements.

- Express Newspapers (P) Ltd. v. Their Workmen (1962): Lock-outs must be justified; retaliatory
actions can be deemed illegal.

c) Lay-off

Lay-off (Section 2(kkk)) occurs when an employer cannot provide work due to uncontrollable
circumstances. Compensation: Workers with at least 240 days of service receive 50% of their
wages during the lay-off (Section 25C). Government Approval is needed for establishments with
over 100 workers (Section 25M).

Key Case Law:

- Management of J. K. Hosiery Factory v. Its Workmen (1960): Lay-offs must be due to genuine
reasons beyond the employer's control.

d) Retrenchment

Retrenchment (Section 2(oo)) refers to termination for reasons other than misconduct.
Conditions for Lawfulness:

- Workers must have served 240 days in the last year.

- Notice or pay in lieu is required (Section 25F), along with retrenchment compensation.

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Key Case Laws:

- State of Bombay v. Hospital Mazdoor Sabha (1960): All forms of termination except specified
ones are considered retrenchment.

- Bharat Gold Mines Ltd. v. Regional Labour Commissioner (1999): Closure does not trigger
retrenchment provisions.

e) Closure

Closure (Section 2(cc)) is the permanent shutdown of an establishment. Employers must provide
60-day notice for small establishments and seek 90-day approval for larger ones (Section 25-O).
Workers with over a year of service are entitled to compensation (Section 25-O(8)).

Key Case Laws:

- Orissa Textile Mills Ltd. v. State of Orissa (2002): Employers must show valid reasons for
closure.

- Excel Wear v. Union of India (1978): Employers have a constitutional right to close businesses,
subject to legal regulations for worker protection.

Conclusion: The Industrial Disputes Act, 1947 provides a structured framework for managing
industrial relations, addressing strikes, layoffs, retrenchment, and closures. It establishes clear
definitions and processes, ensuring a balance between industry needs and worker rights, further
shaped by judicial interpretations.

3
 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 fosters harmony between employers and employees by
regulating their rights and duties. It prohibits unfair labour practices, introduced through Sections
25T and 25U, which are violations of justice and equality in employment relations. These
practices, outlined in the Fifth Schedule, are committed by both employers (e.g., interference
with union formation, victimization, refusal to negotiate) and workers (e.g., coercion of non-
unionized workers, illegal strikes).

Penalties under Section 25U include imprisonment (up to 6 months), fines (up to Rs. 1,000), or
both. Case laws such as Sham Kant Satyanarayan Kesari v. Standard Coal Co. and Durgapur
Casual Workers Union v. Food Corporation of India have clarified these provisions, reinforcing
the Act's role in promoting fairness and industrial peace.

4
 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 holds companies and their management accountable for
violations under Section 32. When a company commits an offence, its responsible officers, such
as directors and managers, can be held liable unless they prove the offence occurred without their
knowledge or despite their due diligence. Key offences include illegal lock-outs, failure to pay
retrenchment compensation, and non-compliance with awards or settlements. Penalties range
from fines to imprisonment, depending on the violation. Case laws like Maharashtra State Road
Transport Corp v. Labour Court and Gujarat Electricity Board v. Hind Mazdoor Sabha have
reinforced these provisions, emphasizing the responsibility of top management. Officers can
defend themselves by proving lack of knowledge or due diligence.

Key Points:

1. Liability of Officers: Corporate officers are presumed liable unless proven otherwise.

2. Vicarious Liability: Management is responsible for the company's actions.

3. Defence: Lack of knowledge or due diligence can absolve liability.

4. Offences: Include illegal lock-outs, failure to pay retrenchment compensation, and non-
compliance with awards.

5. Penalties: Fines and imprisonment, depending on the violation.

6. Case Laws: Reinforce management’s accountability for industrial offences.

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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 ensures that employers clearly
define and communicate the terms of employment through certified "standing orders." The Act
applies to establishments with 100 or more workers and mandates uniform employment practices
to prevent arbitrary changes and promote industrial harmony. Key provisions include the
submission, certification, and modification of standing orders, which cover aspects like worker
classification, work hours, misconduct, and termination. Certified standing orders must be
displayed for employees and cannot be altered without approval. Penalties for non-compliance
range from Rs. 100 to Rs. 5,000.

Key Points:

1. Applicability: Applies to establishments with 100+ workers, with flexibility for states to
lower the threshold.

2. Standing Orders: Employers must submit draft standing orders that align with Model
Standing Orders.

3. Certification: Standing orders are certified after review by authorities and remain valid until
legally modified.

4. Rights of Appeal: Dissatisfied parties can appeal certification decisions within 30 days.

5. Modification: Changes require approval and must reflect alterations in work conditions.

6. Penalties: Fines for violations.

7. Model Standing Orders: Provide standardized rules on employment conditions.

Relevant case laws, such as Associated Cement Companies v. Their Workmen and Rajasthan
State Road Transport Corp. v. Krishna Kant, reinforce that standing orders are binding and
cannot be unilaterally altered by employers, ensuring fairness and transparency in industrial
relations.

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 BOOKLET

Unit III:

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

Question 1) Write short notes on-

f) Strike
g) Lock-out
h) Lay-off
i) Retrenchment and
j) 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.

The Industrial Disputes Act, 1947 outlines key concepts and legal provisions related to industrial
relations, such as strikes, lock-outs, lay-offs, retrenchment, and closure, with a focus on
balancing employer and worker rights.

a) Strike: Defined under Section 2(q) as a collective stoppage of work by workers, often to
express grievances or demands. Legal strikes in public utility services require 14 days'
notice and must comply with restrictions under Sections 22 and 23. Strikes during
ongoing conciliation or adjudication are prohibited. Illegal strikes are addressed in
Section 24. The Supreme Court ruled in T.K. Rangarajan v. Govt. of Tamil Nadu (2003)
that government employees have no constitutional right to strike.

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 b) Lock-out: Section 2(l) defines lock-out as a temporary suspension of work initiated by
an employer, usually in response to strikes or worker demands. Legal lock-outs in public
utility services must follow similar notice and conciliation rules (Sections 22 and 23).
Section 24 deems lock-outs illegal if they violate these conditions. Case law, such as
Express Newspapers v. Workmen (1962), clarifies that lock-outs must be justified and
proportionate to workers' actions.

c) Lay-off: Defined in Section 2(kkk), a lay-off occurs when an employer cannot provide
work due to uncontrollable factors like power shortages. Section 25C entitles workers
with 240 days of service to compensation during the lay-off, typically 50% of wages.
Lay-offs in larger industries (100+ workers) require prior government approval under
Section 25M.

d) Retrenchment: Section 2(oo) defines retrenchment as the termination of employment for

reasons other than misconduct or voluntary retirement. Under Section 25F, lawful
retrenchment requires 240 days of service, notice or payment in lieu, and compensation.
Employers of large establishments must seek government approval (Section 25N). The
Bharat Gold Mines Ltd. v. Labour Commissioner case clarifies that closures do not
constitute retrenchment.

e) Closure: Section 2(cc) defines closure as the permanent shutdown of an establishment.

Section 25FFA mandates a 60-day notice for establishments with fewer than 100
workers, while Section 25-O requires 90-day approval for larger establishments. Workers
with at least one year of service are entitled to compensation. Courts, like in Excel Wear
v. Union of India (1978), recognize the constitutional right to close businesses, subject to
legal regulation.

The Act ensures a structured approach to resolving industrial disputes while protecting both
employers' and workers' interests. Judicial rulings have further clarified and expanded its
provisions.

8
 Unit-III

Lecture 2: Unfair Labour Practices, Penalties,

Question 2 A) What are Unfair Labour Practices as Defined under the Industrial Disputes
Act, 1947?

Ans: The Industrial Disputes Act, 1947, lays down a legal framework for resolving industrial
disputes and maintaining harmony between employers and employees. The concept of unfair
labour practices was introduced in the Act to prevent both employers and workers from engaging
in practices that violate principles of fairness, equity, and justice in industrial relations.

The definition of unfair labour practices is outlined under Section 2(ra) of the Act, which refers
to any of the practices listed in the Fifth Schedule. These practices, when committed, are
considered unfair and illegal under the Act. The Industrial Disputes Act further addresses these
practices through Section 25T, which prohibits unfair labour practices, and Section 25U, which
prescribes penalties for their commission.

Categories of Unfair Labour Practices:

The Fifth Schedule of the Act categorizes unfair labour practices into two main groups:

- Unfair Labour Practices by Employers or Their Trade Unions: These include actions like
victimizing workers, refusing to bargain collectively, or creating coercive work environments to
discourage workers from exercising their rights.

- Unfair Labour Practices by Workers or Their Trade Unions: These include actions like coercion
of other workers, instigating illegal strikes, or disrupting peaceful negotiations with employers.

This division ensures that both sides in industrial relations—employers and employees—are held
accountable for actions that undermine harmonious workplace practices.

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Question 2B) What are Examples of Unfair Labour Practices by Employers or Their Trade
Unions?

Ans: The Fifth Schedule, Part I, outlines several unfair labour practices that can be committed by
employers or their trade unions. These include:

1. Interference with the Right to Organize:

Employers are prohibited from interfering with employees' rights to organize, form, or join
trade unions. For example, an employer may try to create a "company union," which they
control, to prevent workers from joining an independent union. Employers are also prohibited
from discouraging employees from unionizing by threatening them with demotions, loss of
benefits, or termination.

2. Victimization:

Employers may not victimize or discriminate against workers for participating in union
activities or for exercising their legal rights. This could involve dismissing, demoting, or refusing
to promote an employee solely because of their union involvement. A relevant case is **Sham
Kant Satyanarayan Kesari v. Standard Coal Co. (1958)**, where the court held that an employer
victimizing workers for union participation was committing an unfair labour practice.

3. Refusal to Bargain in Good Faith:

Employers must engage in good faith bargaining with recognized trade unions. If an employer
refuses to negotiate on key issues like wages, working conditions, or employment terms, this
amounts to an unfair labour practice. A refusal to respond to union proposals or to delay
negotiations unduly also constitutes a violation of the law.

4. Discriminatory Actions:

Employers cannot discriminate between workers based on union membership or participation

in union activities. For example, if a legal strike takes place, employers cannot refuse to reinstate
certain workers without valid reasons. A failure to provide equal opportunities for union
members is also considered discriminatory.

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5. Intimidation or Coercion:

Employers may not use intimidation, threats, or coercion to force workers to resign from
unions, participate in company-sponsored unions, or avoid lawful strike actions.

These practices have been examined in various case laws, including Balmer Lawrie & Co. Ltd.
v. Workmen (1964), where the Supreme Court ruled that an employer’s refusal to engage in
genuine negotiations was an unfair labour practice.

Question 2 C) What are Examples of Unfair Labour Practices by Workers or Their Trade
Unions?

Ans: The Fifth Schedule, Part II, describes the unfair labour practices that may be committed by
workers or their trade unions. These include:

1. Coercion or Intimidation of Non-unionized Workers:

Workers or trade unions are prohibited from pressuring or intimidating non-unionized workers
into joining unions or participating in strikes. For example, union members cannot force non-
union employees to participate in union activities through threats or coercion.

2. Instigating or Supporting Illegal Strikes:

Unions or workers must adhere to legal procedures before declaring a strike. For instance, in
public utility services, a 14-day notice is required. If workers or unions instigate strikes that do
not comply with legal requirements—such as going on strike without notice, during conciliation
proceedings, or in violation of an award—it is considered an unfair labour practice. This was
illustrated in the case of Durgapur Casual Workers Union v. Food Corporation of India (1989),
where the court penalized the employer for discrimination, but also examined the role of unions
in ensuring lawful strike actions.

3. Refusal to Bargain in Good Faith:

Just as employers must bargain in good faith, workers and their unions are also expected to do
so. If a union fails to engage sincerely in negotiations with the employer, such as by making

11
unreasonable demands or refusing to discuss important issues, this constitutes an unfair labour
practice.

4. Violent or Coercive Picketing:

During strikes or protests, workers are allowed to picket peacefully. However, using violence,
threats, or coercion to block access to the workplace or intimidate employees who are not
participating in the strike is considered an unfair labour practice. Unions must ensure that their
members do not engage in such disruptive or harmful actions.

These practices disrupt the peaceful resolution of industrial disputes and can severely impact the
workplace environment.

Question 2 D) What are the Penalties for Engaging in Unfair Labour Practices?

Ans: The penalties for engaging in unfair labour practices are prescribed under Section 25U of
the Industrial Disputes Act, 1947. This section imposes punishments on anyone who violates
Section 25T, which prohibits unfair labour practices.

The penalties for engaging in such practices are:

- Imprisonment: A term that may extend to six months, or

- Fine: A monetary fine that may extend to Rs. 1,000, or

- Both: The guilty party may be subject to both imprisonment and a fine.

These penalties are meant to deter both employers and workers from engaging in practices that
would disturb the peace and equity of industrial relations.

For example, in the case of Balmer Lawrie & Co. Ltd. v. Workmen (1964), the court found that
refusal to negotiate in good faith constituted an unfair labour practice, and this led to the
imposition of penalties.

The Industrial Disputes Act, 1947, plays a crucial role in ensuring fair practices in industrial
relations by prohibiting and penalizing unfair labour practices. Sections 25T and 25U, along with
the Fifth Schedule, aim to balance the power dynamics between employers and workers,
promoting just treatment on both sides. Judicial decisions, as seen in cases like Bangalore Water

12
Supply and Sewerage Board v. A. Rajappa (1978), have further shaped the interpretation and
application of these provisions, ensuring that industrial peace and fairness are maintained in
India’s labor landscape.

13
 Unit-III

Lecture 3: Offences by Companies etc.

Question 3 A) What is the Legal Framework for Offences by Companies under the
Industrial Disputes Act, 1947?

Ans: The Industrial Disputes Act, 1947 (IDA) governs industrial relations and sets out the legal
obligations of employers and workers in India. While it primarily addresses matters like dispute
resolution, strikes, lock-outs, and retrenchments, it also deals with offences committed by
companies and the liability of corporate officers responsible for these offences. The relevant
provisions for offences by companies are primarily found in Section 32 of the Act.

Section 32: Offences by Companies

Section 32 of the Industrial Disputes Act explicitly states that when an offence under the Act is
committed by a company or any body corporate, every person involved in the management of the
company (such as directors, managers, secretaries, or other officers) is presumed to be
responsible. However, the responsible officers can avoid liability by proving either of the
following:

- The offence was committed without their knowledge, or

- They exercised all due diligence to prevent the commission of the offence.

This provision is significant because it introduces vicarious liability, holding top-level

management responsible for the offences committed by the company. This ensures
accountability and prevents the management from shifting responsibility to lower-level
employees.

Question 3 B) What is the Scope of Section 32 and Who Can Be Held Liable?

Ans: Section 32 of the IDA applies to a broad spectrum of entities, including:

- Companies and corporate bodies,

- Associations of persons, whether incorporated or not.

This wide application ensures that all types of corporate or business entities, whether public or
private, large or small, are covered under the law.

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Key Points of Liability under Section 32:

1. Liability of Officers:

Every person in a position of authority within the company—directors, managers, secretaries,

agents, or any other officers concerned with the management—is presumed liable if the company
commits an offence. This ensures that senior officials cannot evade responsibility for illegal
actions taken by the company.

2. Vicarious Liability:

The principle of vicarious liability is fundamental to Section 32. This means that corporate
officers can be held responsible for actions committed by the company because of their
authoritative positions, even if they were not directly involved in the offence.

3. Defence of Due Diligence:

Corporate officers can avoid liability if they can demonstrate that they took all necessary
precautions or **due diligence** to prevent the offence from occurring. This could include
implementing policies, overseeing compliance with legal provisions, and establishing protocols
to prevent violations.

4. Comprehensive Coverage:

The section ensures that both large corporate bodies and small associations are equally
accountable. It prevents corporate officers from shifting responsibility to employees lower down
the chain, thereby emphasizing the role of top-level management in ensuring legal compliance.

Question 3 C) What Types of Offences Can Companies Be Held Liable For?

Ans: The Industrial Disputes Act outlines several specific offences for which companies and
their responsible officials can be held liable. These include:

1. Illegal Lock-outs (Section 24):

15
 A lock-out declared by an employer without following legal procedures, or during the
pendency of industrial disputes, is deemed illegal. Companies engaging in illegal lock-outs can
be prosecuted under the Act.

2. Non-compliance with Awards and Settlements (Section 29):

Once an award or settlement has been reached through the industrial tribunal or conciliation
process, companies are bound to comply. Non-compliance with such awards can lead to legal
penalties.

3. Failure to Pay Compensation to Retrenched Employees (Section 25F):

Companies must follow proper procedures when retrenching workers, including providing
adequate notice and compensation. Failure to pay retrenchment compensation makes the
company and its officers liable.

4. Non-compliance with Lay-off, Retrenchment, and Closure Provisions (Sections 25F, 25N,
25FFA):

There are stringent procedural requirements under the IDA for lay-offs, retrenchments, and
closures. Non-compliance with these requirements, such as failing to give notice or pay
compensation, constitutes an offence.

5. Violation of Procedures in Public Utility Services (Section 22):

In the case of public utility services, the IDA imposes additional restrictions on strikes and
lock-outs. Any violation of these procedural safeguards, such as calling a strike without proper
notice, can lead to penalties for the company and its officers.

Question 3D ) What are the Penalties for Offences by Companies and Relevant Case Laws?

Ans: The Industrial Disputes Act prescribes various penalties for offences committed by
companies. These penalties are detailed in Sections 25Q and 31 of the Act.

Penalties:

1. Section 25Q:

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 This section deals with penalties for lay-off or retrenchment without following legal
procedures. The punishment includes:

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

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

- Both imprisonment and fine.

2. Section 31:

This section prescribes penalties for a broader range of offences, including:

- First-time offences: A fine that may extend to Rs. 100.

- Subsequent offences: A fine that may extend to Rs. 200.

- Failure to comply with settlements or awards: A more substantial fine that may extend to Rs.
5,000.

These penalties aim to ensure that companies do not violate the rights of workers and comply
with the provisions of the Act.

Relevant Case Laws:

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

This case held that company management, including directors, can be held liable if an
industrial award or settlement is not complied with. The court emphasized the need for top-level
management to ensure compliance with the law.

2. Gujarat Electricity Board v. Hind Mazdoor Sabha (1995):

In this case, the Supreme Court reinforced the concept of corporate responsibility, holding that
senior officers are responsible for ensuring that companies comply with labour laws. Top
management cannot claim ignorance of the company’s violations to escape liability.

3. J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Labour Appellate Tribunal (1963):

17
 This case dealt with the liability of officers for non-compliance with an industrial tribunal’s
award. The court ruled that officers in charge must demonstrate due diligence or lack of
knowledge to avoid liability.

4. Raghubir Singh v. General Manager, Haryana Roadways (2001):

The Supreme Court clarified that Section 32 ensures that all persons involved in the
management of the company are held accountable for offences unless they prove non-
involvement or ignorance. The case reinforced the importance of due diligence in preventing
offences under the Act.

Conclusion: The Industrial Disputes Act, 1947, ensures that companies and their officers are
held accountable for violations of the Act’s provisions. Section 32 establishes vicarious liability
for corporate officers, ensuring that top-level management cannot escape responsibility for the
company’s offences. However, defences of lack of knowledge and due diligence are available.
This legal framework, supported by judicial precedents, emphasizes the need for companies to
comply with the Act’s provisions to avoid penalties and maintain industrial harmony.

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 Unit- III

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

Question 4 A) What is the Purpose and Key Objectives of the Industrial Employment
(Standing Orders) Act, 1946?

Ans: The Industrial Employment (Standing Orders) Act, 1946 was enacted to bring clarity and
uniformity to the conditions of employment in industrial establishments in India. The primary
purpose of the Act is to ensure that the terms and conditions of employment are communicated
clearly to workers, helping both employers and employees understand their rights and
obligations.

Key Objectives of the Act:

1. Clarity in Terms of Employment:

The Act aims to ensure that all industrial establishments define and clearly communicate the
terms and conditions of employment to their workers. This removes ambiguity, ensuring
employees understand their roles, entitlements, and expectations.

2. Prevention of Arbitrary Actions:

It prevents employers from making arbitrary changes to the terms of employment without
following the procedures laid down by the Act. This provides a safeguard for workers against
unfair practices by the employer.

3. Harmonization:

The Act seeks to bring uniformity in employment practices across different industries by
prescribing the format and content of standing orders. This standardization ensures that all
workers receive consistent treatment regarding terms of employment.

4. Dispute Prevention:

By clearly defining the rights and duties of both employers and employees, the Act reduces the
scope for disputes. This contributes to a more stable and harmonious industrial environment,
helping avoid industrial strikes and conflicts.

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Question 4 B) What are Standing Orders and How are They Certified under the Industrial
Employment (Standing Orders) Act?

Ans: Standing Orders refer to the rules that govern the terms of employment within an industrial
establishment. These rules address several aspects of the employment relationship, such as the
classification of workmen, conditions for work hours, holidays, leave, misconduct, and
disciplinary actions. The aim is to create a transparent framework for managing employment-
related matters.

Key Provisions for Standing Orders under the Act:

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

The Act defines "standing orders" as rules that relate to the conditions of employment. They
include details such as:

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

- Work hours, attendance rules, and holiday schedules.

- Procedures for dealing with misconduct and disciplinary actions.

- Termination, suspension, or dismissal conditions.

2. Submission of Draft Standing Orders (Section 3):

Every employer of an industrial establishment must submit draft standing orders to the
Certifying Officer within six months of the Act becoming applicable to their establishment.
These standing orders should conform to the Model Standing Orders provided by the
government to ensure fairness and uniformity.

3. Certification of Standing Orders (Section 5):

Once the draft standing orders are submitted, they undergo scrutiny by a Certifying Officer.
The Certifying Officer ensures that the standing orders are fair, just, and in conformity with the
government’s model. Both the employer and employees (through their representatives) have the
opportunity to present their views before certification.

4. Conditions for Certification (Section 4):

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 Standing orders must be fair and reasonable and must cover all matters outlined in the schedule
of the Act. This includes critical areas like worker classification, working hours, holidays,
overtime provisions, and procedures for termination, suspension, and disciplinary actions.

Question 4 C) How Can Standing Orders Be Modified, and What is the Procedure for
Appeals?

Ans: Once the standing orders are certified, they remain in effect until they are modified or
replaced through a legal process. The Act provides specific provisions for the **modification**
of standing orders to adapt to changing circumstances in an industrial establishment.

Modification of Standing Orders (Section 10):

1. Application for Modification:

Either the employer or the workers may apply for a modification to the standing orders. This is
particularly important if there are changes in the nature of work, employment conditions, or
technological advancements that affect the terms of employment.

2. Approval of Modification:

Modifications to the standing orders can only take effect after approval from the Certifying
Officer. The officer ensures that the proposed changes are fair and do not undermine the rights of
the employees.

3. Conditions for Modification:

The process for modifying standing orders involves consultation with both parties (employer
and employees), and the changes must be in line with the Act's provisions. The purpose is to
ensure that no unilateral changes can be made that negatively affect the employees.

Appeals (Section 6):

1. Right to Appeal:

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

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2. Finality of Decision:

The decision made by the Appellate Authority is final and binding on both parties. This
ensures that disputes over the content of standing orders are resolved promptly, preventing long-
drawn conflicts.

Question 4 C) How Can Standing Orders Be Modified, and What is the Procedure for
Appeals?

Ans: Certified standing orders have the force of law and must be followed strictly by both
employers and employees. They become a part of the employment contract and govern the
employment relationship between the employer and the workers.

Legal Implications:

1. Binding Nature of Standing Orders:

Once certified, standing orders are legally binding and must be displayed prominently in the
establishment in a language understood by the majority of the workers (Section 9). This ensures
that employees are fully aware of their rights and responsibilities.

2. Penalties for Non-compliance (Section 13):

If an employer or worker violates the provisions of the Act, fines ranging from Rs. 100 to Rs.
5,000 may be imposed, depending on the nature of the offence. This encourages adherence to the
certified standing orders.

3. Duration and Validity of Standing Orders (Section 7):

The standing orders remain in force until they are modified or replaced through the proper
legal channels. They automatically come into effect 30 days after certification.

Relevant Case Laws:

1. Associated Cement Companies Ltd. v. Their Workmen (1960):

22
 In this landmark case, the Supreme Court ruled that certified standing orders form part of the
employment contract and cannot be unilaterally altered by the employer. Any modification must
comply with the 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, when dealing with service conditions. The standing orders
certified under the Act supersede any inconsistent contract terms between employers and
individual employees.

3. U.P. State Electricity Board v. Hari Shankar Jain (1978):

The Supreme Court emphasized that certified standing orders are statutory and binding. The
employer must adhere to the standing orders in all employment-related matters, such as
suspension, dismissal, and disciplinary actions.

4. Glaxo Laboratories (I) Ltd. v. Presiding Officer, Labour Court, Meerut (1984):

This case reinforced the importance of following the certification process for standing orders.
The Supreme Court held that certified standing orders provide a balance between employer and
worker interests and must not be altered arbitrarily by the employer.

Conclusion: The Industrial Employment (Standing Orders) Act, 1946 plays a crucial role in
promoting transparency, fairness, and industrial harmony in India. It ensures that employment
terms are clearly defined and communicated through certified standing orders, thereby reducing
disputes and establishing a structured legal framework for industrial relations. The Act also
provides for necessary modifications and appeals, ensuring that the standing orders remain fair
and relevant over time. Various court rulings have reinforced the importance of adhering to the
standing orders and emphasized the need for fair treatment of employees under this Act.

23
 DESCRIPTIVE NOTES
Unit III:

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

Question 1) Write short notes on-

k) Strike
l) Lock-out
m) Lay-off
n) Retrenchment and
o) 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.

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.
24
- 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:

“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.”

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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:

- 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.

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- 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.

- 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.

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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.

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.

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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.

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

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

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 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.

34
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.

36
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).

37
- 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.

38
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.

39
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.

40
 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.

41
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)

42
- 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.

43
- 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.

44
- 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.

45
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.

46