Industrial Disputes II: The Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947, and their Place in the Industrial Relations Code 2020

The object of the Standing Orders Act is to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make those conditions known to the workmen, so that the terms of service are not left to the employer's will. It applies to every industrial establishment in which 100 or more workmen are employed, or were employed on any day of the preceding twelve months, and the appropriate government may extend it to smaller establishments (several states apply it at 50 or fewer). Within six months of the Act becoming applicable the employer must submit draft standing orders to the Certifying Officer (usually the Labour Commissioner or an officer designated by him), covering every matter in the Schedule and conforming as far as practicable to the model standing orders. The Certifying Officer sends a copy to the union or the workmen, hears objections, and — since the 1956 amendment — adjudicates on the fairness and reasonableness of the provisions before certifying them. An appeal lies to the appellate authority. Certified standing orders come into operation thirty days after authenticated copies are sent to the parties, must be posted in English and in the language understood by the majority of workmen, and cannot be modified within six months of their last certification or modification except by agreement.

• The Schedule's matters: classification of workmen (permanent, temporary, apprentices, probationers, badlis, and — added for the central sphere by the model standing orders of 2018 — fixed-term employees); hours of work, holidays, pay days and wage rates; shift working; attendance and late coming; leave and holidays; entry and search; closing and reopening of sections and temporary stoppages; termination of employment and notice; suspension or dismissal for misconduct and the acts and omissions that constitute misconduct; and the means of redress against unfair treatment.
• Until standing orders are certified, the model standing orders apply (section 12A), and a worker suspended pending enquiry receives subsistence allowance of 50 per cent of wages for the first ninety days and 75 per cent thereafter if the delay is not his fault (section 10A).
• Industrial Relations Code 2020: the standing-orders chapter applies to industrial establishments with 300 or more workers, the Central Government prepares model standing orders, and an employer may adopt them with the modifications his establishment needs; smaller establishments fall outside the chapter.

The Industrial Disputes Act 1947, which came into force on 1 April 1947, provides for the investigation and settlement of industrial disputes. Its definition of "industry" (section 2(j)) was given its widest reading by a seven-judge bench of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978), in Justice Krishna Iyer's "triple test": where there is a systematic activity, organised by cooperation between employer and employee, for the production or distribution of goods and services calculated to satisfy human wants and wishes, it is an industry, whether or not there is capital or a profit motive; hospitals, universities, clubs and municipal undertakings could be industries, and only the sovereign functions of the state were excluded. A narrower definition enacted in 1982 was never brought into force. A "workman" (section 2(s)) is any person employed to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, but not persons employed mainly in a managerial or administrative capacity, supervisors drawing wages above ₹10,000 a month (the ceiling since the 2010 amendment), members of the armed forces and police, and prison staff.

The machinery is works committees (section 3), conciliation officers (section 4), boards of conciliation (section 5), courts of inquiry (section 6), labour courts (section 7), industrial tribunals (section 7A) and national tribunals (section 7B); grievance redressal committees were added by section 9C in 2010. The appropriate government may refer a dispute for adjudication under section 10, and the parties may refer it to voluntary arbitration under section 10A. Section 9A requires 21 days' notice before an employer changes any condition of service listed in the Fourth Schedule (wages, hours, leave, rationalisation and the like), and section 33 forbids changing conditions of service or dismissing workmen concerned in a pending dispute without the authority's permission. Since 2010 a workman whose individual dispute over dismissal is pending in conciliation may apply directly to the labour court or tribunal after forty-five days, within three years of the termination (section 2A(2) and (3)). Section 11A (1971) lets the adjudicator set aside a discharge or dismissal and substitute a lesser punishment, and section 17B requires an employer who challenges a reinstatement award in a higher court to pay the workman his last drawn wages while the challenge is pending.

Under section 22 of the Industrial Disputes Act, no person employed in a public utility service (railways, posts and telegraphs, power, water, sanitation, and the industries declared as such) may go on strike in breach of contract without giving notice within six weeks before striking, or within fourteen days of giving notice, or before the date specified in the notice, or during the pendency of conciliation proceedings and seven days after their conclusion; the employer is similarly bound before a lockout. Section 23 applies to all establishments and forbids strikes and lockouts during proceedings before a board of conciliation (and seven days after), before a labour court, tribunal or national tribunal (and two months after), during arbitration, and while a settlement or award is in operation on the matters it covers. A strike or lockout in contravention of these sections, or continued after a reference prohibits it, is illegal (section 24), a lockout declared in consequence of an illegal strike or a strike in consequence of an illegal lockout is not illegal, and financial aid to an illegal strike or lockout is prohibited (section 25). The Industrial Relations Code makes the notice rule universal: in every industrial establishment, no worker may strike without notice within sixty days before striking, or within fourteen days of giving it, or before its date, or during conciliation and seven days after, or during tribunal or arbitration proceedings and sixty days after.

Chapter VA gives compensation. Its lay-off provisions (sections 25C to 25E) do not apply to establishments employing fewer than fifty workmen on average per working day, or to seasonal ones; its retrenchment provisions apply whatever the size. "Continuous service" for these purposes (section 25B) includes a year in which the workman actually worked 240 days (190 days if employed below ground in a mine). A laid-off workman who has completed a year of continuous service is paid lay-off compensation equal to 50 per cent of the total of basic wages and dearness allowance for every day of lay-off except weekly holidays, for up to forty-five days in any twelve months (section 25C). Retrenchment — termination for any reason other than punishment, but excluding voluntary retirement, superannuation, non-renewal of a fixed-term contract and termination on continued ill-health (section 2(oo)) — requires, for a workman with a year's continuous service, one month's written notice or wages in lieu, compensation of fifteen days' average pay for every completed year of continuous service or any part in excess of six months, and notice to the appropriate government (section 25F). The "last come, first go" rule applies within a category (section 25G), and retrenched workmen have a preference in re-employment (section 25H). Closure requires sixty days' notice in establishments of fifty or more (section 25FFA), with compensation as for retrenchment (section 25FFF).

Chapter VB, added in 1976 and extended to establishments with 100 or more workmen in 1982, goes further for factories, mines and plantations: no lay-off, retrenchment or closure without the prior permission of the appropriate government (sections 25M, 25N and 25O), with three months' notice or wages for retrenchment and ninety days' notice for closure. Chapter VC and the Fifth Schedule (1982) list unfair labour practices by employers and by unions and penalise them. The Industrial Relations Code raises the prior-permission threshold for lay-off, retrenchment and closure from 100 to 300 workers, with power for the appropriate government to raise it further by notification; keeps lay-off compensation at 50 per cent and retrenchment compensation at fifteen days' average pay for each completed year; and adds a Worker Re-skilling Fund, into which an employer who retrenches pays fifteen days' last drawn wages for each retrenched worker, to be credited to the worker. It recognises fixed-term employment, under which a worker hired for a fixed period gets the same hours, wages and benefits as a permanent worker doing similar work, and the ending of his term is not retrenchment. And it widens "worker" by moving the supervisory wage ceiling to ₹18,000 a month, or a higher amount the Central Government notifies.