Standing Orders Under the Industrial Employment Act: Structuring Workforce Management

Before 1946, an industrial worker in India could be dismissed without notice, have their pay docked without explanation, or face disciplinary action under rules they had never seen. Employment conditions were largely unwritten, and what an employer promised verbally had little enforceability. The Industrial Employment (Standing Orders) Act, 1946 was enacted precisely to end this uncertainty – by making it mandatory for employers to put the rules of the workplace in writing, get them officially certified, and then display them where every worker can see them.

What are standing orders?
Which establishments must have standing orders?
What do standing orders cover?
Drafting and certifying standing orders
Submitting the draft
The certification process
Appeals
Posting the certified orders
The role of model standing orders
Penalties for non-compliance
Modification of certified standing orders
Standing orders vs. service contracts

What are standing orders?

Under Section 2(g) of the Industrial Employment (Standing Orders) Act, 1946, “standing orders” are formally defined as rules relating to matters set out in the Schedule of the Act. In plain terms, they are a written code of conduct and employment conditions that govern the day-to-day relationship between an employer and their workforce. They cover everything from how workers are classified and when they must report for duty, to the grounds on which they can be dismissed.

The significance of standing orders goes beyond paperwork. Once certified, they acquire the force of law – they are binding on the employer, the workmen, and any trade union operating in that establishment. They cannot simply be overridden by a private employment contract. Courts have consistently held that no agreement between an employer and a workman can override a certified standing order, except through the formal modification process provided under the Act itself.

Which establishments must have standing orders?

The Act applies to every industrial establishment where 100 or more workmen are employed, or were employed on any day during the preceding 12 months. However, the Central Government has reduced this threshold to 50 workmen for establishments where it is the appropriate government – such as those under central government control, railway administrations, major ports, mines, and oil fields. In the National Capital Territory of Delhi, the threshold is also 50 or more workmen.

The “appropriate government” plays a central role under the Act. For establishments under central government control or in sectors like railways, mines, and major ports, the Central Government is the appropriate authority. For all other industrial establishments, the relevant State Government takes on that role. The appropriate government also has the power to extend the Act’s provisions to establishments employing fewer than 100 workers, provided at least two months’ notice is given through the Official Gazette.

What do standing orders cover?

The Schedule to the Act lists the matters that every set of standing orders must address. These include the classification of workers (permanent, temporary, apprentice, probationer, etc.), work hours, shifts, holidays, pay-days, and wage rates. Standing orders must also lay down the rules on attendance, late reporting, procedures for applying for leave, and the conditions under which sections of the establishment may be closed or work temporarily stopped.

On the disciplinary side, standing orders must specify the grounds for suspension or dismissal for misconduct, the procedure for termination, and the notice period required from both the employer and the workman. They must also establish a mechanism for workers to raise grievances against unfair treatment by employers or their agents. In a nutshell, standing orders create a complete written framework for the employment relationship from the day a worker joins to the day they leave.

Drafting and certifying standing orders

The Act sets out a structured, step-by-step process that an employer must follow before standing orders can come into operation.

Submitting the draft

Within six months of the Act becoming applicable to an industrial establishment, the employer must submit five copies of the proposed draft standing orders to the Certifying Officer designated for that area. Under the Central Rules, all Regional Labour Commissioners (Central) serve as Certifying Officers for establishments in the central sphere. The draft must cover every matter listed in the Schedule that is applicable to that establishment, and it must be accompanied by a statement giving prescribed particulars of the workmen employed, including their trade union affiliation.

The certification process

Once the draft is received, the Certifying Officer forwards a copy to the trade union of the workmen, or directly to worker representatives if no union exists, along with a notice inviting objections within 15 days. After giving both the employer and worker representatives an opportunity to be heard, the Certifying Officer certifies the standing orders – with or without modifications – if two conditions are satisfied: the draft covers all relevant Schedule matters, and the orders are otherwise in conformity with the Act.

A key function of the Certifying Officer is to assess the fairness and reasonableness of each provision. This is not a rubber-stamp exercise. The officer has the authority to modify provisions they consider unfair. Once certified, authenticated copies are sent to the employer and the trade union within seven days. The certified standing orders then come into operation 30 days after such copies are sent, or after seven days if an appeal has been filed.

Appeals

Any aggrieved party – whether the employer, a workman, or a trade union – may file an appeal within 30 days of the certified standing orders being communicated. The Appellate Authority hears the appeal and passes a final order, either confirming the certified orders or directing amendments. The decisions of the Appellate Authority are final.

Posting the certified orders

After certification, the employer must display the text of the certified standing orders prominently in English and in the language understood by the majority of the workers – on notice boards near the main entrance and in all departments. This ensures that every workman actually knows the rules they are expected to follow.

The role of model standing orders

Not every employer is equipped to draft comprehensive standing orders from scratch. To address this, the Act empowers the appropriate government to prescribe Model Standing Orders (MSOs). Model standing orders are a set of rules and regulations drafted by the Central Government to regulate employment conditions in industrial establishments, serving as a ready template for employers to follow.

Employers are required to frame their draft standing orders in conformity with the applicable MSOs as far as practicable. Where an establishment has not yet had its standing orders certified, the model standing orders automatically apply in the interim, once notified by the State Government through the Official Gazette. As held in The Management v. Deputy Commissioner of Labour (2019), model standing orders carry the force of law just like any other statutory instrument.

Importantly, an establishment’s standing orders are not rendered invalid simply because they contain provisions beyond what the MSOs specify – as long as those additional provisions fall within the Schedule and are certified as fair and reasonable. The MSOs are a benchmark, not a ceiling. The Karnataka High Court has affirmed that standing orders with additional provisions not found in MSOs remain valid, so long as they stay within the bounds of the Schedule.

Penalties for non-compliance

Failure to submit draft standing orders can attract a fine of up to ₹5,000. If an employer contravenes the certified standing orders, the penalty is a fine of up to ₹100 for the initial offence, with a further fine of up to ₹25 per day for each day the offence continues. Prosecutions require prior sanction from the appropriate government.

Modification of certified standing orders

Certified standing orders are not permanently fixed. They can be modified, but only after six months from the date the last modification came into operation, unless the employer and workers mutually agree to an earlier change. Any proposed modification follows the same certification process as the original standing orders – draft submission, objections, hearing, and certification by the Certifying Officer.

Standing orders vs. service contracts

Certified standing orders bind the employer and workmen alike, and they override individual employment contracts in case of a conflict. This makes them a special category of legal instrument – described by legal scholars as a “statutory contract.” The Supreme Court, in Union of India v. K. Suri Babu (2023), reaffirmed that standing orders, being special laws, prevail over conflicting general provisions when it comes to disciplinary matters and service conditions.

This matters practically: even if a worker signs an individual employment contract with terms that contradict the certified standing orders, the standing orders will govern. The formal modification process under the Act is the only lawful route to change them.

What do you think? Given that standing orders have the force of law and override individual contracts, should workers have a more direct and formal role in drafting them – not just the right to raise objections? And with the rise of gig and platform-based work in India, where most workers are not classified as “workmen” under the Act, do you think the framework of standing orders remains adequate to protect modern workers?

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Table of Contents

What are standing orders? 🔗

Which establishments must have standing orders? 🔗

What do standing orders cover? 🔗

Drafting and certifying standing orders 🔗

Submitting the draft 🔗

The certification process 🔗

Appeals 🔗

Posting the certified orders 🔗

The role of model standing orders 🔗

Penalties for non-compliance 🔗

Modification of certified standing orders 🔗

Standing orders vs. service contracts 🔗