Indian Legal System > Civil Laws > Labour Laws > Industrial Employment (Standing Orders) Act, 1946 > Objectives of Standing Orders
During the era of laissez-faire (prior to the enactment of the “Industrial Employment (Standing Orders) Act, 1946,” ) the policy of hire and fire was very common. The economic law of demand and supply in many of the cases was determining the wage rates, conditions of service, etc. The employer and the workmen used to settle the term of the contract of employment on mutual agreed terms and conditions after an individual bargain, which may be express or implied. The usual practice of the management was to enter into individual contracts with the worker with regard to his employment. In several cases, the conditions were not well defined and there was ambiguity in the conditions laid down in the contract. This resulted in a lack of uniformity in the agreement. The employer altered the conditions of the contract arbitrarily. This confused the workers because they couldn’t understand what was expected of them and what was to be followed. The employers, as well as the workmen, found themselves victims of the caprice. Therefore, the situation led to industrial unrest and created an unsatisfactory climate for good relations.
Commenting on the state of affairs before the Industrial Employment (Standing Orders) Act, 1946 was passed, in Agra Electric Supply Co. v. Alladin, (1969) II LLJ 540 case, the Court observed: “such a state of affairs lead to confusion and made possible discriminatory treatment between employees and employees, though all of them were appointed in the same premises and for the same or similar work. Such a position is clearly incompatible with principles of collective bargaining and renders their effectiveness difficult, if not impossible.”
Similarly in Balakrishna Pillai Vs Anant Engineering Works (P) Ltd, (1975) II LLJ 391 case, the Division Bench of Bombay High Court observed that before the Industrial Employment (Standing Order) Act, 1946, was placed on statute book; the conditions of service of the industrial workmen were undefined, arbitrary and depended mostly upon the whims and vagaries of the employer.
The modern law required that the terms and conditions of employment and rules of disciplines should be written and known to the workmen concerned and these should also be uniformed, fair and reasonable. The government either at its own or at the instance of unions initiated the “Industrial Employment (Standing Orders) Act, 1946.” The origin of the Standing Orders goes back to the year 1944 when the 6th Indian Labour Conference held in October 1944 considered framing of the standing orders with regard to the rules and regulations for workmen. The conference observed that there was the need to define the conditions of employment, discharge, holidays, leave and disciplinary action, etc. so that the friction between the management and the workers in an industrial undertaking may be minimized. As a result of the discussion, Central legislation was enacted in 1946 which came into effect from 23rd April 1946. The Industrial Employment (Standing Orders) Act, 1946” was designed to define the terms of employment and to give the workmen collective voice regarding the terms of employment and ensure the conditions of service. This Act has been amended through several amendments in 1951, 1961 and 1963.
Objects of the Standing Orders Act:
The Preamble of the act declares that this is an Act to require employers in industrial establishments formally to define conditions of employment under them. WHEREAS it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them.
The Act is the first central legislation with the objective of having uniform Standing Orders i.e. terms and conditions relating to recruitment, transfer, age of retirement, attendance, leave, payment of wages,, etc. throughout the country. Thus the Act can be seen as a piece of social legislation to prevent exploitation of industrial workmen.
The objects of the Industrial Employment (Standing Orders) Act, 1946 are
- To provide regular standing orders (standardization) for factories, workers and the main professional or working relationship.
- To define, with sufficient precision, the principal conditions of employment in industrial establishments under them and to make the said conditions known to workmen employed by them.
- To regulate standards of conduct of the employers and employees so that labour-management relations could be improved.
- To maintain proper discipline, harmonious working conditions and achieve higher productivity by providing satisfactory employment and working conditions.
- To provide for redressal of grievances arising out of employment or relating to unfair treatment of wrongful exaction on the part of the employers against the employees.
- To specify the duties and responsibilities of both the employers and the employees.
- To provide statutory sanctity and importance to the Standing Orders.
- To support the promotion of industrial peace and harmony by supporting fair industrial practices.
In Re Glaxo Laboratories, 1984 I LLJ 16 case, the Supreme Court observed that the Act was meant to compel the employer, by statute, to prescribe minimum conditions of service subject to which employment is given to him.
In Salem Erode Electricity Co. Ltd. v. Employees’ Union, AIR 1966 SC 808 and Uptron India Ltd. v. Shamni Bhan, (1998) 6 SCC 538 cases, the Court observed that the object underlying the Act is to introduce uniformity of terms and conditions of employment in respect of workmen belonging to the same category and to ensure that these terms and conditions are known to employees before they accept the employment.
In Commissioner of Labour v. ACC Ltd. AIR 1955 Bom 363 case, a Division Bench of the Bombay High Court, after examining, the scope and purpose of the Act, observed that the language of the legislation makes it clear that, after the passing of the Act, every employer must make provisions for every matter embodied in the Schedule of the Act. He must also ensure that the Standing Order applicable to his employees are in conformity with the Model Standing Orders. The only deviation which is permitted is a case where conformity with the Model Standing Orders would be impracticable in the case of that particular establishment.
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