22. Industrial Employment (Standing Orders) Legislation and Problem of Discipline in Industry – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 22

Industrial Employment (Standing Orders) Legislation and Problem of Discipline in Industry

Chapter Objectives

This chapter will enable students to:

  1. Explain the importance of standing orders in Indian industry and the need for giving them a statutory force
  2. Describe the provisions of the Industrial Employment (Standing Orders) Act, 1946, relating to the drafting, certification and modification of standing orders
  3. Describe the matters to be covered under standing orders
  4. Understand the deficiencies experienced in the course of working of the Industrial Employment (Standing Orders) Act, 1946
  5. Understand the meaning and importance of industrial discipline and principles for its maintenance
  6. Describe the major Acts or omissions constituting misconduct in Indian industries
  7. Explain the procedure adopted in industrial establishments in the country in handling disciplinary cases

Importance of Standing Orders in Industrial Establishments

Standing orders refer to somewhat permanently arranged orders in contrast to ad hoc orders framed and executed keeping in view the needs of particular situations or particular cases. In industrial establishments, these denote orders framed and enforced by management in regard to specified terms and conditions of employment such as recruitment, classification of workmen, schedule of working hours, attendance and late-coming, leave and holidays, redressal of grievances, Acts or omissions constituting misconduct and similar other matters. Absence of standing orders on these matters leads to uncertainties, conflicting decisions, arbitrariness on the part of managerial personnel, and chaos and confusion in employment relations. Prior to legislative compulsion to frame such orders, the managements generally took unilateral, arbitrary and contradictory decisions resulting in disturbed industrial relations. In many cases, the workers did not have knowledge about their rights and obligations, nor could they be certain about the rules under which they had to work. It may not be out of place to mention that most of the matters required to be covered by standing orders in India constitute subjects of collective bargaining in the United States.

In India, the first legislative measure providing for framing and certification of standing orders was the Bombay Industrial Disputes Act, 1938, which aimed at defining the conditions of employment with sufficient precision, and to make them known to workmen. The matter was discussed at the fifth session of the Indian Labour Conference held in 1943. The general consensus was that standing orders should be introduced in industrial establishments employing 250 or more workmen, but some members wanted the limit to be lower. The general opinion was also in favour of giving it a statutory force. The employers’ representatives suggested that there should be a statutory authority to decide cases of disagreement with the Labour Commissioner. The workers’ representatives suggested a statutory authority to deal with disputes arising out of standing orders themselves. In both the cases, industrial court was suggested to be the appropriate authority. The matter was also discussed in the Indian Labour Conference in 1944 and 1945. It was mainly on the basis of the resolutions of the Indian Labour Conference that the Industrial Employment (Standing Orders) Act, 1946, came to be passed as a central legislation.

PART I
INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

The importance of standing orders in regard to certain terms and conditions of employment has been briefly discussed in Chapter 13 in the section on ‘collective bargaining in India’. ‘… Standing orders defining the conditions of recruitment, discharge, disciplinary action, holidays, leave etc. go a long way towards minimising friction between the management and workers in industrial undertakings.1 The Bombay Industrial Disputes Act, 1938, was the first legislation in the country requiring the employers of large industrial concerns to frame standing orders relating to prescribed terms and conditions of employment. Subsequently, the matter came up for discussion in the Indian Labour Conference in 1943, 1944, 1945, which decided in favour of a central legislation. A bill providing for the framing of standing orders defining certain conditions of employment in industrial undertakings employing 100 or more workmen was passed by the Central Legislative Assembly in April 1946. The Act came into force on 23 April 1946. The main provisions of the Act, as amended till date are summarized below.

The Act applies to every industrial establishment employing 100 or more workmen, but the central and state governments can apply the provisions of the Act to any industrial establishment employing less than 100 workmen. However, a 2 months’ prior notice by notification in the official gazette is necessary. The Act does not apply to (i) industries covered by relevant sections relating to standing orders (Chapter 7) under the Bombay Industrial Relations Act, 1946, and (ii) industrial establishments, except those under the control of the central government, to which the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, applies.

Some Important Definitions

Some important definitions under the Act are given in Box 22.1.

Box 22.1

SOME IMPORTANT DEFINITIONS UNDER THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

Appropriate Government: Central government in respect of industrial establishments under the control of the central government or a railway administration or in a major port, mine or oil-field; and state government in all other cases [Sec. 2 (b)].

Certifying Officer: Labour Commissioner or a Regional Labour Commissioner, and includes any other officer appointed by the central or state government, by notification in the official gazette, to perform all or any of the functions of a Certifying Officer under the Act [Sec. 2 (c)].

Employer: The owner of an industrial establishment and includes: (i) manager of a factory; (ii) the authority appointed by the Government of India for the purpose, in the case of an industrial establishment under the control of any department under its control, and where no authority has been appointed, the head of the department; and (iii) a person responsible to the owner for the supervision and control of the industrial establishment, in other cases [Sec. 2 (d)].

Industrial Establishment: (i) An industrial establishment as defined in the Payment of Wages Act, 1936, (ii) a factory;(iii) a railway; and (iv) the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen [Sec. 2 (e)].

Submission of Draft Standing Orders and Conditions for Certification

The employer of every industrial establishment covered under the Act is required to submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment. The draft should make provision for every matter set out in the schedule and where model standing orders have been prescribed, it should be in conformity with the model. The matters specified in the schedule are shown in Box 22.2.

Box 22.2

MATTERS SPECIFIED IN THE SCHEDULE OF THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

  1. Classification of workmen, for example, whether permanent, temporary, apprentice, probationers or badlis

  2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage-rates

  3. Shift working

  4. Attendance and late-coming

  5. Conditions of, procedure in applying for and the authority which may grant leave and holidays

  6. Requirement to enter premises by certain gates and liability to search

  7. Closing and re-opening of sections of the industrial establishment, and temporary stoppage of work and the rights and liabilities of the employer and workmen arising therefrom

  8. Termination of employment, and the notice thereof to be given by the employer and workmen

  9. Suspension or dismissal for misconduct, and Acts or omissions which constitute misconduct

  10. Means of redressal for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants

  11. Any other matter which may be prescribed

The model standing orders as provided for under the central rules have been described later in the chapter.

The draft standing orders should be accompanied by a statement giving prescribed particulars relating to workmen employed in the industrial establishment including the name of the trade union to which they belong. A group of employers in similar industrial establishments may submit a joint draft of standing orders.

Standing orders are certifiable under the Act if: (i) provision has been made for every matter set out in the schedule; and (ii) the standing orders are otherwise in conformity with the provisions of the Act [Sec. 3–4, Schedule].

Certification of Standing Orders

On receipt of the draft standing orders, the Certifying Officer is required to forward a copy of the same to the trade union of workmen, if any, or where there is no trade union, to the workmen in the prescribed manner, together with a notice in the prescribed form for raising objections. The objections are to be submitted within 15 days of the receipt of the notice. After giving the employer and the trade union or representatives of workmen an opportunity of being heard, the Certifying Officer will take decision whether or not any modification of or addition to the draft submitted is necessary and make a written order accordingly. After making the required modifications or additions, if any, the Certifying Officer will certify the draft standing orders and send copies of the certified standing orders authenticated in the prescribed manner to the employer and the trade union or the representatives of workmen within seven days of certification [Sec. 5].

Appeal

Any employer, workman, trade union or other prescribed representatives of workmen aggrieved by the order of the Certifying Officer may appeal to the appellate authority within 30 days from the date on which copies are sent to them. The appellate authority may confirm the standing orders as certified, or may make modifications or additions to render them certifiable. The decision of the appellate authority is final. In case the appellate authority modifies or makes additions to the certified standing orders, it has to send copies of the same to the concerned persons within seven days of the order [Sec. 6].

Date of Operation of Standing Orders

Where no appeal has been made, certified standing orders come into operation on the expiry of 30 days from the date on which their authenticated copies are sent to the persons concerned. Where an appeal has been preferred, these come into operation on the expiry of seven days from the date on which copies of the order of the appellate authority have been sent to the concerned persons [Sec. 7].

Duration and Modification of Standing Orders

Certified standing orders are normally to remain unmodified for a period of six months from the date of their operation, but the employer and the workmen or their trade union or representatives may agree to modify it in a shorter period. In such a case, five copies of the draft proposals for modifications and a copy of the agreement are to be filed to the Certifying Officer along with the application. The Certifying Officer has to follow the same procedure as applicable in the case of certification of the standing orders. However, these provisions relating to modification of standing orders do not apply in the states of Maharashtra and Gujarat [Sec. 10].

Other Provisions

Powers of Certifying Officers and Appellate Authorities

The Certifying Officer and the appellate authority have the powers of a civil court for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses, and compelling the discovery and production of documents. They are also deemed to be a civil court within the meaning of the Code of Criminal Procedure, 1973 [Sec. 11].

Register of Standing Orders

The Certifying Officer is required to file a copy of all standing orders finally certified in a prescribed register. He is also required to furnish a copy of the certified standing orders to any person applying for the same on payment of the prescribed fee [Sec. 8].

Display of Standing Orders

The text of the standing orders finally certified under the Act is to be prominently posted by the employer in English and in the language understood by the majority of his workmen on special boards to be maintained for the purpose at or near the entrance through which the majority of the workmen enter the industrial establishment and in all the departments where the workmen are employed [Sec. 9].

Payment of Subsistence Allowance

Where any workman is suspended by the employer pending investigation or injury into complaints or charges of misconduct against him, the employer is required to pay to such workman subsistence allowance at the following rates:

  1. At the rate of 50 per cent of the wages which the workman was entitled to immediately preceding the date of such suspension, for the first 90 days of suspension.
  2. At the rate of 75 per cent of the wages for the remaining period of suspension—if the delay in the completion of disciplinary proceedings against such workman is not directly attributable to the conduct of the workman.

In case a dispute arises regarding the payable subsistence allowance, the workman or the employer concerned may refer the dispute to the Labour Court constituted under the Industrial Disputes Act, 1947, for the area. The decision of the Labour Court will be final and binding on the parties. However, where provisions relating to payment of subsistence allowance under any other law in force in any state are more beneficial than the provisions of this Act, the provisions of the other law will be applicable to the payment of subsistence allowance in that state [Sec. 10 (A)].

Interpretation of the Standing Orders

If any question arises as to the application or interpretation of certified standing orders, the employer or workman or a trade union or a representative body of workmen may refer the question to the Labour Court of the area constituted under the Industrial Disputes Act, 1947. The Labour Court, after giving the parties an opportunity of being heard, will decide the question. The decision of Labour Court will be final and binding on the parties [Sec. 13 (A)].

Temporary Application of Model Standing Orders

So long as certified standing orders are not in operation in an industrial establishment, the prescribed model standing orders will be applicable in that industrial establishment, and all the provisions of the Act applicable to certified standing orders will apply in such cases also. These provisions, however, are not applicable is Gujarat or Maharashtra [Sec. 12 (A)].

Penalties

The penalties for the offences under the Act are shown in Box 22.3.

Box 22.3

PENALTIES UNDER THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

  1. Failure to submit draft standing orders [Sec. 3] or modification of standing orders without the approval of the Certifying Officer [Sec. 10] is punishable with fine up to 5,000, and in the case of a continuing offence with a further fine up to 200 per day of default.

  2. Contravention of standing orders finally certified is punishable with fine up to 100, and in the case of a continuing offence with a further fine of 25 per day of default [Sec. 13].

Prosecution for an offence under the Act can be instituted only with the previous sanction of the appropriate government. No court inferior to that of a metropolitan magistrate or judicial magistrate of the second class is empowered to try any offence under the Act [Sec. 13].

Power to Exempt

The central and state governments may exempt, conditionally or unconditionally, industrial establishments in their respective jurisdictions from all or any provisions of the Act [Sec. 14].

Non-applicability in Certain Industrial Undertakings

The provisions of the Act do not apply to workmen to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Services) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or other rules or regulations notified by the appropriate government apply [Sec. 13 (B)].

Power to Make Rules

Both the central and state governments are empowered to make rules to carry out the purposes of the Act. The rules may (i) prescribe additional matters to be included in the Schedule and the procedure to be followed in this regard; (ii) set out model standing orders; (iii) prescribe the procedure to be followed by Certifying Officer and appellate authorities; (iv) prescribe the fees for copies of certified standing orders; and (v) provide for any other prescribed matter [Sec. 15].

MODEL STANDING ORDERS UNDER THE CENTRAL INDUSTRIAL EMPLOYMENT (STANDING ORDERS) RULES

In compliance with the provisions of the Act, the central and most of the state governments have framed model standing orders. These have been modified from time-to-time. The model standing orders framed under the central rules for industries other than coal mines are reproduced below:

  1. Classification of Workmen
    1. Workmen shall be classified as:
      1. Permanent
      2. Probationers
      3. Badlis
      4. Temporary
      5. Casual
      6. Apprentices
    2. A ‘permanent workman’ is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of 3 months in the same or in another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lockout, strike (not being an illegal strike) or involuntary closure of the establishment.
    3. A ‘probationer’ is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed 3 months’ service therein. If a permanent employee is employed as a probationer in a new post, he may, at any time during the probationary period of 3 months, be reverted to his old permanent post.
    4. A ‘badli’ is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.
    5. A ‘temporary workman’ is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.
    6. A ‘casual workman’ is a workman whose employment is of a casual nature.
    7. An ‘apprentice’ is a learner who is paid an allowance during the period of his training.
  2. Tickets
    1. Every workman shall be given a permanent ticket unless he is a probationer, a badli, a temporary worker or an apprentice.
    2. Every permanent workman shall be provided with a departmental ticket showing his number, and shall, on being required to do so, show it to any person authorized by the manager to inspect it.
    3. Every badli shall be provided with a badli card on which shall be entered the days on which he has worked in the establishment, and which shall be surrendered if he obtains employment.
    4. Every temporary workman shall be provided with a ‘temporary’ ticket which he shall surrender on his discharge.
    5. Every casual worker shall be provided with a ‘casual’ card on which shall be entered the days on which he has worked in the establishment.
    6. Every apprentice shall be provided with an ‘apprentice’ card, which shall be surrendered if he obtains permanent employment.
  3. Publication of Working Time: The period and hours of work for all classes of workers in each shift shall be exhibited in English and in the principal languages of workmen employed in the establishment, on notice-boards maintained at or near the main entrance of the establishment and at the time-keeper’s office, if any.
  4. Publication of Holidays and Pay Days: Notices specifying (a) the days observed by the establishment as holidays, and (b) pay days, shall be pasted on the said notice-boards.
  5. Publication of Wage-rates: Notices specifying the rates or wages payable to all classes of workmen and for all classes or work shall be displayed on the said notice-boards.
  6. Shift Working: More than one shift may be worked in a department or departments or any section of a department of the establishment at the discretion of the employer. If more than one shift is worked, the workmen shall be liable to be transferred from one shift to another. No shift-working shall be discontinued without 2 months’ notice being given in writing to the workmen prior to such discontinuance, provided that no such notice shall be necessary if the closing of the shift is under an agreement with the workmen affected. If, as a result of the discontinuance of the shift working, any workmen are to be retrenched, such retrenchment shall be effected, in accordance with the provisions of the Industrial Disputes Act, 1947 (14 of 1947), and the rules made there under. If shift-working is restarted, the workmen shall be given notice and re-employed in accordance with the provisions of the said Act and the said rules.
  7. Notice of Changes in Shift Working: Any notice of discontinuance or of re-starting of a shift working required by Standing Order 7 shall be in the form appended to these orders and shall be served in the following manner namely:
    1. The notice shall be displayed conspicuously by the employer on a notice-board based at the main entrance to the establishment.
    2. Provided that where any registered trade union of workmen exists, a copy of the notice shall also be served by registered post to the secretary of such union.
  8. Attendance and Late-coming: All workmen shall be at work at the establishment at the time fixed and notified under Para 4. Workmen attending late will be liable to the deductions provided for in the Payment of Wages Act, 1936.
  9. Leave
    1. Holidays with pay will be allowed as provided for in Chapter VIII of the Factories Act, 1948, and other holidays in accordance with law, contract, custom and usage.
    2. A workman who desires to obtain leave of absence, shall apply to the employer or any other officer of the industrial establishment specified in this behalf by the employer, who shall issue orders on the application within a week of its submission or 2 days prior to the commencement of the leave applied for, whichever is earlier, provided that if the leave applied for is to commence on the date of the application or within 3 days thereof, the order shall be given on the same day. If the leave asked for is granted, a leave pass shall be issued to the worker. If the leave is refused or postponed, the fact of such refusal or postponement and the reasons therefor shall be recorded in writing in a register to be maintained for the purpose, and if the worker so desires, a copy of the entry in the register shall be supplied to him. If the workman, after proceeding on leave, desires an extension thereof, he shall apply to the employer or the officer specified in this behalf by the employer who shall send a written reply either granting or refusing extension of leave to the workmen if his address is available and if such reply is likely to reach him before the expiry of the leave originally granted to him.
    3. If the workman remains absent beyond the period of leave originally granted or subsequently extended, he shall lose his lien on his appointment unless he (i) returns within 8 days of the expiry of the leave; and (ii) explains to the satisfaction of the employer or the officer specified in this behalf by the employer his inability to return before the expiry of his leave. In case the workman loses lien on appointment, he shall be entitled to be kept on the badli list.
  10. Casual Leave: A workman may be granted casual leave of absence with or without pay not exceeding 10 days in the aggregate in a calendar year. Such leave shall not be more than 3 days at a time except in case of sickness. Such leave is intended to meet special circumstances which cannot be foreseen. Ordinarily, the previous permission of the head of the department in the establishment shall be obtained before such leave is taken, but when this is not possible, the head of the department shall, as soon as may be practicable, be informed in writing of the absence from and of the probable duration of such absence.
  11. Payment of Wages
    1. Any wages, due to the workman but not paid on the usual pay day on account of their being unclaimed, shall be paid by the employer on an unclaimed wage pay day in each week, which shall be notified on the notice-boards as aforesaid.
    2. All workmen will be paid wages on a working day before the expiry of the seventh or the tenth day after the last day of the wage period in respect of which the wages are payable accordingly as the total number of workmen employed in the establishment does not or does exceed 1,000.
  12. Stoppage of Work
    1. The employer may, at any time, in the event of fire, catastrophe, breakdown of machinery, stoppage of power supply, epidemics, civil commotion or other cause beyond his control, stop any section or sections of the establishment, wholly or partially, for any period or periods without notice.
    2. In the event of such stoppage during working hours, the workmen affected shall be notified by notices put up on the notice-board in the departments concerned, and at the office of the employer and at the time-keeper’s office, if any, as soon as practicable, when work will be resumed and whether they are to remain at, or leave, their place of work. The workmen shall not ordinarily be required to remain for more than 2 hours after the commencement of the stoppage. If the period of detention does not exceed 1 hour, the workmen so detained shall be entitled to receive wages for the whole of the time during which they are detained as a result of the stoppage. In the case of piece-rate workers, the average daily earning for the previous month shall be taken to be the daily wage. No other compensation will be admissible in case of such stoppage. Whenever practicable, reasonable notice shall be given of resumption of normal work.
    3. In case where workmen are laid-off for short periods on account of failure of plant or a temporary curtailment of production, the period of unemployment shall be treated as compulsory leave either with or without pay, as the case may be. When, however, workmen have to be laid-off for an indefinitely long period, their services may be terminated after giving them due notice or pay in lieu thereof.
    4. The employer may, in the event of a strike affecting either wholly or partially any section or department of the establishment, close down either wholly or partially such section or department and any other section or department effected by such closing down. The fact of such closure shall be notified by notices put on the notice-board in the section or department concerned and in the time-keeper’s office, if any, as soon as practicable. The workmen concerned shall also be notified by a general notice, prior to resumption of work, as to when work will be resumed.
  13. Termination of Employment
    1. For terminating employment of a permanent workman, notice in writing shall be given either by the employer or the workman—1 month’s notice in the case of monthly rated workmen and 2 weeks’ notice in the case of other workmen; 1 month’s or 2 weeks’ pay, as the case may be, may be paid in lieu of the notice.
    2. No temporary workmen whether monthly rated, weekly rated or piece-rated and no probationer or badli shall be entitled to any notice or pay in lieu thereof his services are terminated, but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him in the manner prescribed in Para 14.
    3. Where the employment of any workman is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated.
  14. Disciplinary Action for Misconduct
    1. A workman may be fined up to two per cent of his wages in a month for any of the following Acts and omissions, namely:
    2. A workman may be suspended for a period not exceeding 4 days at a time, or dismissed without notice or any compensation in lieu of notice if he is found to be guilty of misconduct.
    3. The Acts and omissions to be treated as misconduct are shown in Box 22.4.

      Box 22.4

      ACTS AND OMISSIONS CONSTITUTING MISCONDUCT UNDER THE MODEL STANDING ORDERS (CENTRAL RULES)

      1. Wilful insubordination or disobedience, whether alone or in combination with others to any lawful and reasonable order of a superior
      2. Theft, fraud or dishonesty in connection with the employer’s business or property
      3. Wilful damage to, or loss of, employer’s goods or property
      4. Taking or giving bribes or any illegal gratification
      5. Habitual absence without leave or absence without leave for more than 10 days
      6. Habitual late attendance
      7. Habitual breach of any law applicable to the establishment
      8. Riotous or disorderly behaviour during working hours at the establishment or any Act subversive of discipline
      9. Habitual negligence or neglect of work
      10. Frequent repetition of any Act or omission for which a fine may be imposed to a maximum of 2 per cent of the wages in a month
      11. Striking work or inciting others to strike work in contravention of the provisions of any law, or rule having the force of law.
      1. Where a disciplinary proceeding against a workman is contemplated or is pending or where criminal proceedings against him in respect of any offence are under investigation or trial and the employer is satisfied that it is necessary or desirable to place the workman under suspension, he may by order in writing, suspend him with effect from such date as may be specified in the order. A statement setting out in detail the reasons for such suspension shall be supplied to the workman within a week from the date of a his suspension.
      2. A workman who is placed under suspension under CI. (a), shall, during the period of such suspension, be paid a subsistence allowance at the following rates, namely:
        • Where the enquiry contemplated or pending is departmental, the subsistence allowance shall, for the first ninety days from the date of suspension, be equal to one-half of the basic wages, dearness allowance and other compensatory allowances to which the workman would have been entitled if he was on leave. If the departmental enquiry gets prolonged and the workman continues to be under suspension for a period exceeding ninety days, the subsistence allowance shall for such period be equal to three-fourths of such basic wages, dearness allowance and other compensatory allowances.

          Provided that where such enquiry is prolonged beyond a period of ninety days for reasons directly attributable to the workman, the subsistence allowance shall, for the period exceeding ninety days, be reduced to one-fourth of such basic wages, dearness allowance and other compensatory allowances.

        • Where the enquiry is by an outside agency or, as the case may be, where criminal proceedings against the workman are under investigation or trial, the subsistence allowance shall, for the first one hundred and eighty days from the date of suspension, be equal to one-half of his basic wages, dearness allowance and other compensatory allowances to which the workman would have been entitled if he was on leave. If such enquiry or criminal proceedings gets prolonged and the workman continues to be under suspension for a period exceeding one hundred and eighty days, the subsistence allowance shall for such period be equal to three-fourths of such wages.

          Provided that where such enquiry or criminal proceedings is prolonged beyond a period of one hundred and eighty days for reasons directly attributable to the workman, the subsistence allowance shall, for the period exceeding one hundred and eighty days, be reduced to one-fourth of such wages.

        • In the enquiry, the workman shall be entitled to appear in person or to be represented by an office-bearer of a trade union of which he is a member.
        • The proceedings of the enquiry shall be recorded in Hindi or English, or in the language of the state where the industrial establishment is located, whichever is preferred by the workman.
        • The proceedings of the enquiry shall be completed within a period of three months.

          Provided that the period of three months may, for reasons to be recorded in writing, be extended by such further period as may be deemed necessary by the inquiry officer.

      3. If on the conclusion of the enquiry of, as the case may be, of the criminal proceedings, the workman has been found guilty of the charges framed against him and it is considered, after giving the workman concerned a reasonable opportunity of making representation on the penalty proposed, that an order of dismissal or suspension or fine or stoppage of annual increment or reduction in rank would meet the ends of justice, the employer shall pass an order accordingly.

        Provided that when an order of dismissal is passed under this clause, the workman shall be deemed to have been absent from duty during the period of suspension and shall not be entitled to any remuneration for such period and the subsistence allowance already paid to him shall not be recovered.

        Provided further that where the period between the date on which the workman was suspended from duty pending the inquiry or investigation or trial and the date on which an order of suspension was passed under this clause, exceeds 4 days, the workman shall be deemed to have been suspended only for 4 days or for such shorter period as is specified in the said order of suspension and for the remaining period he shall be entitled in the same wages as he would have received if he had not been placed under suspension, after deducting the subsistence allowance paid to him for such period.

        Provided also that where an order imposing fine or stoppage of annual increment or reduction in rank is passed under this clause, the workman shall be deemed to have been on duty during the period of suspension and shall be entitled to the same wages as he would have received if he had not been placed under suspension after deducting the subsistence allowance paid to him for such period.

        Provided also that in the case of a workman to whom the provisions of CI (2) of Art.311 of the Constitution apply, the provisions of that article shall be complied with.

      4. If on the conclusion of the enquiry, or as the case be, of the criminal proceedings, the workman has been found to be not guilty of any of the charges framed against him, he shall be deemed to have been on duty during the period of suspension and shall be entitled to the same wages as he would have received if he had not been placed under suspension after deducting the subsistence allowance paid to him for such period.
      5. The payment of subsistence allowance under this standing order shall be subject to the workman concerned not taking up an employment during the period of suspension.
    4. In awarding punishment under this standing order, the authority imposing the punishment shall take into account the gravity of misconduct, the previous record, if any, of the workman and other extenuating or aggravating circumstances that may exist. A copy of the order passed by the authority imposing the punishment shall be supplied to the workman concerned.
      1. A workman aggrieved by an order imposing punishment may, within twenty-one days from the date of receipt of the order, appeal to the appellate authority.
      2. The employer shall, for the purposes of Clause (a) above, specify the appellate authority.
      3. The appellate authority, after giving an opportunity to the workman of being heard, shall pass such order as he thinks proper on the appeal within fifteen days of its receipt and communicate the same to the workman in writing.
  15. Complaints: All complaints arising out of employment including those relating to unfair treatment or wrongful exaction on the part of the employer or his agent shall be submitted to the manager or other person specified in this behalf with the right of appeal to the employer.
  16. Certificate on Termination of Service: Every permanent workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.
  17. Liability of Employer: The employer of the establishment shall personally be held responsible for the proper and faithful observance of the standing orders.
    1. Any person desiring to prefer an appeal in pursuance of sub-section (i) of Section 6 of the Act, shall draw up a memorandum of appeal setting out the ground of appeal and forward it in quintuplicate to the appellate authority accompanied by a certified copy of the standing orders, amendments or modifications, as the case may be.
    2. The appellate authority shall, after giving the appellant an opportunity of being heard, confirm the standing orders, amendments or modifications as certified by the certifying officer unless it considers that there are reasons for giving the other parties to the proceedings a hearing before a final decision is made in the appeal.
    3. Where the appellate authority does not confirm the standing orders, amendments or modifications, it shall fix a date for the hearing of the appeal and direct notice thereof to be given:
      1. where the appeal is filed by the employer or a workman to trade unions of the workmen of industrial establishments, and where there are no such trade unions to the representatives of workmen elected under CI. (b) of rule 6, or as the case may be, to the employer;
      2. where the appeal is filed by a trade union to the employer and all other trade unions of the workmen of the industrial establishment;
      3. Where the appeal is filed by the representatives of the workmen, to the employer and any other workman whom the appellate authority joins as a party to the appeal.
    4. The applicant shall furnish each of the respondents with a copy of the memorandum of appeal.
    5. The appellate authority may at any stage call for any evidence it considers necessary for disposal of the appeal.
    6. On the date fixed, under sub-rule (3) of the hearing of the appeal, the appellate authority shall take such evidence as it may have called for or consider to be relevant.
  18. Exhibition of Standing Orders: A copy of these orders in English and in Hindi shall be pasted on the notice-board maintained at or near the main entrance to the establishment and shall be kept in a legible condition.
MODEL STANDING ORDERS ON ADDITIONAL ITEMS APPLICABLE TO ALL INDUSTRIES
  1. Service Record: Matters relating to service card, token tickets, certification of service, change of residential address of workers and record of age.
    1. Service Card: Every industrial establishment shall maintain a service card in respect of each workman in the form appended to these orders, wherein the particulars of that workman shall be recorded with the knowledge of that workman and duly attested by an officer authorized in this behalf together with date.
    2. Certificate of Service
      1. Every workman shall be entitled to a service certificate specifying the nature of work (designation) and the period of employment (indicating the days, months, years) at the time of discharge, termination, retirement or resignation from service.
      2. The existing entries in Para 16 of Schedule 1 and Para 20 of Schedule I-A shall be omitted.
    3. Residential Address of Workman: A workman shall notify the employer immediately on engagement the details of his residential address and thereafter promptly communicate to his employer any change of his residential address. In case the workman has not communicated to his employer the change in his residential address, his last known address shall be treated by the employer as his residential address for sending any communication.
    4. Record of Age
      1. Every workman shall indicate his exact date of birth to the employer of the officer authorized by him in this behalf, at the time of entering the service of the establishment. The employer or the officer authorized by him in this behalf may, before the date of birth of a workman is entered in his service card, require him to supply:
      2. The date of birth of a workman, once entered in the service card of the establishment, shall be the sole evidence of his age in relation to all matters pertaining to his service including fixation of the date of his retirement from the service of the establishment. All formalities regarding the recording of the date of birth shall be finalized within 3 months of the appointment of a workman.
      3. Cases where date of birth of any workman had already been decided on the date these rules come into force shall not be reopened under these provisions:
        • his matriculation or school leaving certificate granted by the Board of Secondary Education or similar educational authority; or
        • a certified copy of his date of birth as recorded in the registers of a municipality, local authority or panchayat or registrar of births;
        • in the absence of either of the aforesaid two categories of certificates, the employer or the officer authorized by him in this behalf may require the workman to supply, a certificate from a government medical officer not below the rank of an Assistant surgeon, indicating the probable age of the workman provided the cost of obtaining such certificate is borne by the employer;
        • Where it is not practicable to obtain certificate from government medical officer, an affidavit sworn either by the workman or his parents, or by a near relative, who is in a position to know about the workman’s actual or approximate date of birth, before a first class magistrate or oath commissioner, as evidence in support of the date of birth given by him.
  2. Confirmation: The employer shall, in accordance with the terms and conditions stipulated in the letter of appointment, confirm the eligible workman and issue a letter of confirmation to him. Whenever a workman is confirmed, an entry with regard to the confirmation shall also be made in his service card within a period of 30 days from the date of such confirmation.
  3. Age of Retirement: The age of retirement or superannuation of a workman shall be, as may be agreed upon between the employer and the workman, under an agreement or as specified in a settlement or award which is binding on both the workman and the employer. Where there is no such agreed age, retirement or superannuation shall be on the completion of 58 years of age by the workman.
  4. Transfer: A workman may be transferred according to exigencies of work from one shop or department to another or from one station to another or from one establishment to another under the same employer.

    Provided that the wages, grade continuity of service and other conditions of service of the workman are not adversely affected by such transfer.

    Provided further that a workman is transferred from one job to another, which he is capable of doing, and provided also that where the transfer involves moving from one state to another, such transfer shall take place, either with the consent of the workman or where there is a specific provision to that effect in the letter of appointment, and provided also that (a) reasonable notice is given to such workman, and (b) reasonable joining time is allowed in case of transfers from one station to another. The workman concerned shall be paid travelling allowance including transport charges, and fifty per cent thereof to meet incidental charges.

  5. Medical Aid in Case of Accidents: Where a workman meets with an accident in the course of or arising out of his employment, the employer shall, at the employer’s expense, make satisfactory arrangements for immediate and necessary medical aid to the injured workman and shall arrange for his further treatment—if considered necessary by the doctor attending on him. Wherever the workman is entitled for treatment and benefits under the Employees’ State Insurance Act, 1948, or the Employees’ Compensation Act, 1923, the employer shall arrange for the treatment and compensation accordingly.
  6. Medical Examination: Wherever the recruitment rules specify medical examination of a workman on his first appointment the employer shall, at the employer’s expense, make arrangements for the medical examination by a registered medical practitioner.
  7. Secrecy: No workman shall take any papers, books, drawings, photographs, instruments, apparatus, documents, or any other property of an industrial establishment out of the work premises except with the written permission of his immediate superior, nor shall he in any way pass or cause to be passed or disclose or cause to be disclosed any information or matter concerning the manufacturing process, trade secrets and confidential documents of the establishment to any unauthorized person, company or Corporation without the written permission of the employer.
  8. Exclusive Service: A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer.
AN ASSESSMENT
  1. The Act has been a laudable measure intended to prevent the employers of industrial establishments from having different contracts of employment with different workmen employed by them under the same roof and performing similar duties. The Act requires the employers to lay down precisely the terms and conditions of employment with regard to discharge, misconduct, disciplinary action, dismissal, leave and holidays, hours of work and redressal against unfair treatment, and so forth. In many western countries where collective bargaining is in a developed stage, these have constituted important subject matter of collective agreements. Under the Industrial Employment (Standing Orders) Act, 1946, the employers are required to frame the draft standing orders on their own and apply for their certification before the Certifying Officer. However, the Certifying Officer is required to send the draft standing orders to the trade union or workmen for raising objections, if any. Only after considering these objections, the Certifying Officer certifies the standing orders. In practice, many employers obtain the prior consent of the trade union or workmen before sending the draft standing orders for certification. The subject matters on which standing orders are to be framed have acquired considerable importance from the point of view of maintaining discipline and industrial peace. As such, there is the need to require the employers to frame standing orders in agreement with the recognized union or representatives of workmen before they are sent for certification or the parties themselves be left free to work out these terms and conditions by negotiations and bargaining and get the agreements in this regard registered.
  2. The standing orders relating to Acts or omissions constituting misconduct and disciplinary action have much more significance than what appears at first instance. Numerous disputes have arisen on disciplinary action and dismissals and discharges resulting therefrom. Fines under the Payment of Wages Act, 1936, can be imposed mainly is accordance with the Acts or omissions specified under the standing orders. A large number of cases of dismissals and discharges have come to be decided by the Labour Courts and tribunals established under the Industrial Disputes Act, 1947, which treats individual disputes relating to discharge, dismissal and termination of service also as industrial disputes leading to a complex procedure of litigation. Many such disputes have come to be decided by the High Courts and Supreme Court. The adjudication authorities and the higher courts have often directed reinstatement of workers wrongfully discharged or dismissed and have also given to them other forms of relief. Thus, it is desirable to frame uniform policy in regard to grave Acts of misconduct rather than leaving the matter to be decided by individual employers, scattered in different parts of the country. Smooth functioning of industrial establishments call for a greater amount of freedom for the employer but consistent with the broad policy. When the individual disputes relating to discharge, dismissal or termination of service are industrial disputes under the Industrial Disputes Act, 1947, the employers should be require to take action against workmen guilty of the grave offences as specified in the broad policy, and the cases of misconduct of minor nature should be left to be decided by the employer.
  3. There is no provision of appointment of Inspectors or other machinery for the enforcement of the Act. The Certifying Officer, who certifies the standing orders, also looks after cases of violations of the provisions of the Act and contravention of certified standing orders. As only a limited number of Certifying Officers have been appointed by the central and state governments and the coverage of the Act is very wide, many infringements of the provisions of the Act or certified standing orders go unnoticed. The number of industrial establishments and employees coming within the purview of the Act and the number of establishments having certified standing orders and employees covered in the central and state spheres during 1983–2004 are shown in Table 22.1

    Table 22.1 shows that during 1983–98, industrial establishments in the central sphere having certified standing orders have been around 81 per cent of the total number of establishments covered under the Act. Data for subsequent years are not available. The percentage of employees covered under standing orders during the same period varied between 81 (1983) and 95 (1996). The table shows that in the State/UT sphere, the position has been far from satisfactory. In this sphere, the percentage of establishments having certified standing orders during 1983–2004 varied between 22.2 (2001) and 57.8 (1983) of the total number of establishments covered under the Act. The position has deteriorated since 1998 onwards. During the same period, the percentage of employees covered under standing orders varied between 50.8 (2001 and 2004) and 81.7 (1983) of the total number of establishments coming under the coverage of the act. Thus, the position of the progress of the application of the Act cannot be said to be satisfactory. As in many states, the Act has been made applicable to industrial establishments employing 50 or more workmen; effective measures have to be made to reduce delay in the certification of the standing orders. Statistics show that a large number of standing orders remain pending before the Certifying Officers whose number has not been adequate in view of the largeness of the number of applications.

  4. A perusal of the contents of the model standing orders and those in operation in major industrial establishments will show that a large number of matters, in addition to those specified in the schedule of the Act, have been covered by them. On the one hand, the list in the schedule is exhaustive; on the other hand, the government is empowered to specify other matters for the framing of the standing orders. This cripples the hands of the employer in managing the workforce. The difficulties before the employers become more intense in industrial establishments having a multiplicity of unions. It is desirable to rationalize the matters where framing of standing orders is necessary or the employers may be required to determine the subjects in agreement with recognized unions.

Table 22.1 Progress of Certification of Standing Orders (1983–2004

 

Source: Government of India, Ministry of Labour. Indian Labour Year Book, 1991, p. 179; 1997, p. 170; 1999, p. 210; 2000–01, pp. 199–201; 2001–02, pp. 187–88; 2004, pp. 195–96; 2005–06, p. 204.

 

The Industrial Employment (Standing Orders) Act was enacted more than 55 years ago. Since then, significant changes have taken place in the field of industrial relations in the country. The trade union movement has strengthened and the attitude of the employers has materially changed. A number of protective and other labour laws have come to be enacted and numerous disputes relating to service conditions including dismissal, discharge, termination of service and disciplinary action have come to be decided by Supreme Court, High Courts and adjudication authorities under the Industrial Disputes Act, 1947. The decisions of the courts and adjudication authorities have led to the growth of industrial jurisprudence relating to terms and conditions of employment and service. Under these conditions, a thorough review of the working of the Act is necessary. The realities of the situation, however, call for greater involvement of trade unions at the drafting stage of standing orders, rationalization of the matters on which standing orders should be framed, allowing more freedom to the employers in dealing with cases of misconduct, formulation of broad policy in regard to cases of grave misconduct and integrating the Act into a comprehensive industrial relations or industrial disputes legislation.

RECOMMENDATIONS OF THE SECOND NCL (2002)

The second National Commission on Labour (NCL) (2002) has recommended the enactment of separate standing orders legislation for establishments employing 20 or more but less than 50 workmen. The Commission has also worked out a draft law on the subject, the provisions of which are similar to those of the Industrial Employment (Standing Orders) Act, 1946.2

 

CHART 22.A: Number of Establishments Within the Purview of the I E (S.O) Act and Number of Establishments Having Certified S.Os. in the State Sphere (1983–2004), (See Table 22.1)

 

CHART 22.B: Number of Employees Within the Purview of the I E (S.O) Act and Number of Employees Covered Under Certified S.Os. in the State Sphere (1983–2004), (See Table 22.1)

PART II
INDUSTRIAL DISCIPLINE AND DISCIPLINARY PROCEDURE

In Chapter 11 (see Table 11.1), it has been shown that indiscipline and violence have been constituting a major cause of industrial disputes resulting in work stoppages in the country. A large number of industrial disputes on disciplinary matters, especially those involving discharge and dismissal, frequently come before the adjudication authorities under the Industrial Disputes Act, 1947, and also before the High Courts and even Supreme Court for decision. The question of indiscipline and the Acts and omissions constituting misconduct have direct relevance not only for the purposes of Industrial Employment (Standing Orders) Act, 1946, and standing orders framed under it, but also for the provisions of Payment of Wages Act, 1936, Minimum Wages Act, 1948, and other laws such as social security laws under which erring workmen are deprived of privileges and benefits on the ground of their gross misconduct. As such, it is pertinent here to go into some detail on the subject.

Meaning of Discipline

Various authors have attempted to define discipline, but in their own ways. Without going into the intricacies of these definitions, it will be sufficient here to specify the basic elements which characterize discipline. These elements are well exemplified in the definition brought forward by Earl R. Bramblett, who says, ‘Discipline in the broad sense means orderliness–the opposite of confusion. It is a fundamental requirement for the people working in a plant as it is for other segments of society … Shop discipline, as we use the term, does not mean strict and technical observance of rigid rules and regulations. It simply means working, cooperating and behaving in a normal and orderly way, as any reasonable person would expect an employee to do’.3 From the above and a few similar definitions, certain basic characteristics of what discipline constitutes can be easily discerned. These are: (i) observance of rules and regulations in operation, (ii) employees’ behaviour in an orderly and normal way, (iii) extending willing cooperation to both fellow workers and management, (iv) performance of duty in an established manner, and (v) avoiding offending co-workers and management in any way.

Approaches to Industrial Discipline

There are two basic approaches to the maintenance of industrial discipline. Firstly, under early industrialism and, to some extent even now, rigid enforcement of prescribed rules under pain of punishment has been the guiding principle for maintenance of discipline in industry. This is a negative approach which expects orderly behaviour of employees primarily based on the fear of penalties for Acts of indiscipline. Such punishments could be both deterrent and retributive. Secondly, there is the view that fear of punishment cannot be effective in maintaining lasting discipline. Maintenance of discipline in industry should take into account certain positive factors such as human approach towards employee relations, provision of monetary and non-monetary inducements, fostering of mutual understanding, fairness in the framing of rules, clarity of policy and consultation with the representatives of those who are subject to discipline. ‘In fact, as modern society becomes more complex and the number and proportion of wage-earners increases, a greater degree of industrial discipline is necessary since the motives for self-discipline tend to disappear. A proper plan of industrial discipline emphasizes the elimination of the causes of infractions rather than punishment meted out to transgressors’.4

Some General Principles for Maintaining Discipline in Industry

In order to ensure a satisfactory level of discipline on a regular basis, it is desirable to adhere to certain well-recognized principles. These are as follows:

  1. The management itself must abide by the provisions of labour laws and regulations, standing orders, industrial awards and collective agreements and settlements. Only then it can expect a compliance of rules by the employees.
  2. The standing orders relating to Acts and omissions constituting misconduct should be framed in consultation with the union or workers’ representatives and must contain elements of fairness and clarity and be made known to the workers.
  3. The penalties for different kinds of offences should be clearly defined, and these must be in proportion to the severity of offences committed.
  4. The rules of discipline should be uniformly enforced without any element of discrimination and manoeuvring. The management must also be careful about appraising these rules from time to time and insert modifications in the light of changed conditions.
  5. Adequate attention should be given on the preventive aspects such as fostering human relations approach and provision of incentives.
  6. Where a particular type of offence is more frequent, the circumstances leading to the offence should be carefully investigated and contributing factor modified.
  7. There should also be the provision of appeal and review of the decisions taken at lower levels.

Acts or Omissions Constituting Misconduct

It has been stated in the preceding section of the chapter that the employers of industrial establishments covered under the Industrial Employment (Standing Orders) Act, 1946, are required to frame standing orders relating inter alia to: (i) termination of employment, and the notice thereof to be given by the employer and workmen, and (ii) suspension or dismissal for misconduct and Acts or omissions which constitute misconduct.

A mention of the major Acts or omissions constituting misconduct as laid down under the model standing orders under central rules has been made in the preceding section of the chapter. These include: (i) wilful insubordination or disobedience to lawful and reasonable orders of superiors, (ii) theft, fraud or dishonesty, (iii) taking or giving bribes or illegal gratification, (iv) wilful damage or loss to employers’ goods or property, (v) habitual absence without leave, (vi) habitual late-coming, (vii) habitual breach of applicable law, (viii) riotous and disorderly behaviour or any Act subversive of discipline, (ix) habitual negligence or neglect of work, (x) frequent repetition of offences, and (xi) striking work or inciting others to strike work in contravention of provisions of law.

In practice, these Acts or omissions specified under the model standing orders have generally been incorporated in the standing orders of industrial establishments covered under the Industrial Employment (Standing Orders) Act, 1946. Besides, many industrial establishments have specified quite a few other Acts or omissions constituting misconduct in their standing orders keeping in view the special conditions prevalent in the enterprises. The standing orders in operation in TISCO, Tata Motors Ltd., Tata Robin Frazer Ltd., and Larsen & Toubro Ltd., have specified a number of Acts or omissions constituting misconduct in addition to these described under the model standing orders.5

These are mentioned in Box 22.5.

Box 22.5

CERTAIN ACTS OR OMISSIONS CONSTITUTING MISCONDUCT IN ADDITION TO THOSE LAID DOWN IN CENTRAL MODEL STANDING ORDERS UNDER STANDING ORDERS OF TISCO, TATA MOTORS LTD., TATA ROBIN FRAZER LTD AND LARSEN & TOUBRO LTD

  1. Giving false information or production of false certificate at the time of employment or for securing any facility or privilege

  2. Sleeping of duty

  3. Disclosure to unauthorized persons of information relating to company’s business

  4. Deceptive or corrupt practices

  5. Smoking or drinking in the works-premises

  6. Interference with any safety devices installed

  7. Collection or canvassing for collection of any money within the work premises for purposes not sanctioned by the management

  8. Distributing or exhibiting in works-premises any pamphlets, posters, etc. without the prior written sanction of the management

  9. Conviction in any court of law for any criminal offence involving moral turpitude

  10. Gambling within the boundaries of the works

  11. Malingering or slowing down of work

  12. Unauthorized occupation or use of company’s quarters

  13. Failure by employee to inform about occurrence of any communicable disease, such as cholera, small-pox, plague etc.

  14. Carrying on moneylending or any other private business without the permission of the management

  15. Refusal to work on another job or another machine

  16. Holding meetings inside the works-premises without the sanction of the management

  17. Threatening or intimidating any employee within the works-premises

  18. Speculation

  19. Insolvency which may be prejudicial to the interests of the company

  20. Writing of anonymous letters criticizing superiors or the company

  21. Wilful falsification, defacement or destruction of personal records or any record of establishment

  22. Abetment or attempt at, any of the above Acts of misconduct.

The standing orders of the above organizations and also of others do not generally specify as to what Acts or omissions would be treated as grave offences and what others, of minor nature. In actual practice, the punishments actually inflicted on erring employees depend much on the perception of the management in particular cases. What may constitute a minor offence in one organization or at a particular point of time in the same organization may be treated as of major nature in another organization or at a different point of time in the same organization and vice versa. For example, a theft in a factory using precious metals and stones may be a major offence in that factory, but it may be a minor one in a bidi manufacturing establishment. Besides, a minor offence becomes major when it is repeated time and again. Generally speaking, the severity of the Acts or omissions constituting misconduct differs according to the size of the workforce, managerial policy, the state of industrial relations including union practices and union leadership, the level of education of workmen and the nature of decisions of adjudication authorities and the courts of law in the disciplinary cases.

PENALTIES OR PUNISHMENTS

Punishments for Acts or omissions constituting misconduct in industrial establishments may take various forms depending on the severity of the offences and the management’s perception about them. The most usual punishments for misconduct are described in Box 22.6.

Box 22.6

USUAL PUNISHMENTS FOR MISCONDUCT

  1. Oral warning

  2. Written reprimand

  3. Imposition of fines

  4. Withholding of increment

  5. Forced leave

  6. Withholding of pay and allowances

  7. Transfer to some uncongenial and disagreeable job

  8. Stopping promotion

  9. Realization of cost of damage or loss of employer’s property or goods

  10. Demotion

  11. Discharge or dismissal.

These punishments are not in ascending order of their severity. Even a minor offence may be punished by harsher penalties if it is repeated time and again. Similarly, even a grave offence may be punished lightly if the management takes it leniently. In many cases, an oral warning or a written reprimand is sufficient to induce employees to modify their behaviour. Where the offence is considered a little serious, the erring employees may be punished by fines, withholding of increment, and transfer to some disagreeable job or temporary suspension. For more serious offences such as negligence of duty, unauthorized absence, habitual late-coming, or an Act of insubordination, the guilty employees may be punished by withholding of pay, allowances and privileges, stopping of promotion, forced leave and even demotion. The severest form of punishment is discharge or dismissal which is inflicted for intolerable and grave offences such as riotous and disorderly behaviour, physical assaults of superiors and co-workers, fraud or dishonesty, wilful insubordination and disobedience to orders of management and repetition of the same offence again and again.

Disciplinary Procedure and Disciplinary Action

The main steps followed in disciplinary cases, particularly those involving dismissal on discharge, are: (i) charge-sheeting, (ii) domestic enquiry/enquiry and (iii) inflicting of punishment.

  1. Charge-sheeting: An employee who is found to have committed an Act of misconduct is first asked in writing to explain why disciplinary action should not be taken against him for his misconduct. This is called charge-sheeting. The charge-sheet has to be specific and should include the offence committed by him, the place, date and time of its commitment. The charge-sheet may be handed over to him personally, or it may be sent to him by registered post. The employee is given a reasonable time to reply to the charges. If the employee accepts his guilt and makes a request for being excused, and the management is convinced about his sincerity in future, it may inflict light punishment on him. In case the reply of employee is not convincing or he evades giving a reply, the management takes recourse to further action in the matter. Giving the offender an opportunity to explain his position is based on the concept of natural justice as laid down in Article 311 of the Indian Constitution which reads, ‘No person shall be dismissed or removed from service until he has been given a reasonable opportunity to show cause why the proposed action should not be taken against him’. The model standing orders also assert, ‘No order of dismissal shall be made unless the workman concerned is informed in writing of the alleged misconduct and is given an opportunity to explain the circumstances alleged against him’ (see preceding section of the chapter).

    In a significant judgement, the Supreme Court has spelled out the requirements of the principles of natural justice. These are: (a) a workman should know the nature of complaint or accusation; (b) an opportunity to state his case; and (c) the management should Act in good faith which means that action of the management was fair, reasonable and just.6

  2. Domestic Enquiry/Enquiry: In case the management is not satisfied with the outcome of stage of charge-sheeting and the offence is of serious nature, the next step of domestic enquiry is invoked. The charge-sheeted employee is served with a notice of enquiry, and the persons designated to hold the enquiry is communicated to him. The Enquiry Officer is required to make an investigation into the matter, collect relevant information, interview fellow workers or others for the purpose and keep a record of the statements of the witnesses and the evidences collected. The usual procedure is to get the findings signed by the concerned persons. After completion of the enquiry, the Enquiry Officer is required to send his report along with his own Recommendations as to punishments to be inflicted to the authority appointing him for the purpose. As the enquiry is generally held by an officer of the establishment, it is known as domestic enquiry. In some cases, the enquiry is also held by some outside agency.
  3. Inflicting of Punishment: On the basis of the report by the Enquiry Officer, statements of witnesses and other material evidences and the Recommendations of the Enquiry Officer as to the type of punishment which could be inflicted on the offender, the authority takes a final decision in the matter and issues an order of the punishment to be inflicted. A copy of the order is served on the employee found guilty of the offence. As stated earlier in the chapter, the authority, prior to taking a final decision in matter, must try to ensure that the principles of natural justice have been followed in the procedure and that the punishment awarded is in proportion to the severity of the offence committed.
  4. Suspension: In general, an employee charged with having committed an offence of serious nature is put under suspension during the pendency of disciplinary proceeding or where such a proceeding is contemplated or during investigation and trial of offence. A statement setting out in detail the reasons for the suspension is supplied to the workman. The suspended employee has to be paid subsistence allowance during the period of his suspension as per provisions of the Industrial Employment (Standing Orders) Act, 1946. [Sec. 10 A]. The model standing orders have also specified the details concerning payment of subsistence allowance (see the preceding section of the chapter relating to model standing orders).

A brief description of procedures for dealing with the cases of misconduct as laid down in the standing orders of Tata Motors Ltd. and TRF Ltd. (Jamshedpur), which are essentially similar, is given in Box 22.7.

Box 22.7

PROCEDURE FOR DEALING WITH CASES OF MISCONDUCT IN TATA MOTORS LTD. AND TRF LTD. (JAMSHEDPUR)

  1. If misconduct is alleged against an employee, an enquiry will be held by an officer or officers nominated by the management in every alleged Act of misconduct in which the employee or employees concerned will be afforded a reasonable opportunity of explaining and defending his or their actions. Any such enquiry may relate to alleged Acts of misconduct of several employees where, in the opinion of the management, it is convenient to hold the enquiry for several employees together.

  2. An employee charged with serious misconduct may be suspended forthwith from duty for the alleged misconduct. Such suspension pending enquiry will not ordinarily exceed 60 days during which period the employee will be paid subsistence allowance at the rate of 50 per cent of his basic wage.

  3. The order of suspension shall be in writing and will set out the misconduct alleged against the employee and shall take effect immediately on its communication to the employee. The suspended employee shall not, during the period of suspension, enter the work premises except with the special permission of the General Manager.

  4. If during the enquiry, it is found that the employee is guilty of misconduct except that stated in the order of suspension, he shall be liable to punishment for misconduct as specified in the standing orders. The punishments specified in the standing orders include: dismissal in the case of grave misconduct and at the discretion of company, warning or censure, suspension for the short period, withholding of increment, reduction in salary, or demotion. However, before any punishment is awarded to him, he shall be given an opportunity of explaining and defending his actions.

  5. If after enquiry, the employee is adjudged guilty of misconduct and punishment is awarded, he shall be deemed to have been absent from duty for the period of suspension and shall not be entitled to any salary or wages for such period. If, however, he is found not guilty of the alleged misconduct or of any other Act of misconduct, the order of suspension shall be rescinded and he shall be deemed to have been on duty during the period of suspension and shall be entitled to the same salary or wages as he would have received if he had not been suspended.

  6. If the employee is dismissed as a result of the enquiry, the dismissal shall have effect from the date of suspension.

  7. In case of punishment other than that of dismissal, he shall not be entitled to salary or wages or any other remuneration for the period of suspension.

  8. A copy of the order inflicting the punishment shall be given to the employee concerned.

  9. However, the above clauses shall not affect the right of the company to terminate the services of the employee by notice or payment of salary in lieu of the notice in accordance with the provisions of the standing orders, notwithstanding that an enquiry into the alleged misconduct of the employee is pending.

  10. The company reserves to itself the right to suspend an employee accused in a court of law of any criminal offence involving moral turpitude, until the disposal of the trial. An employee so suspended shall not be entitled to any salary or wages for this period except in the event of his acquittal.7

     

    TELCO (1950). Works Standing Orders, pp. 10–11; TRF Ltd. (1968). Works Standing Orders, pp. 17–18

Taking decisions by management of industrial establishments in disciplinary cases is different from delivering judgements by courts of law in cases of criminal and civil offences. The courts of law have before them guidelines from criminal and civil laws of the land which specify the kinds of punishments to be awarded for particular offences. The managements of industrial establishments do not have before them the rules specifying the punishments for different Acts and omissions constituting misconduct of their employees. In disciplinary cases, the management becomes both the persecutor and judge. While inflicting punishment in disciplinary cases, the managements have to exercise their own discretion, which may have to be modified keeping in view the union pressure and court decisions. There are numerous examples to show that the decisions of the management in disciplinary cases, particularly those relating to dismissal and discharge, have been reversed or modified by the adjudication authorities appointed under the Industrial Disputes Act, 1947, and even by High Courts and Supreme Court. As such, managements must display a great amount of caution while taking decisions. In particular, they should try to ensure that the procedure followed in handling such cases is based on the principles of natural justice and commensurate with the established procedure. Besides, they should try to ensure that the punishments awarded are in proportion to the severity of the offence committed.

Recommendations of the NCLs Relating to Disciplinary Procedure

In order to make the disciplinary procedure more effective, the first NCL (1969) made the following Recommendations:

  1. In the domestic enquiry, the aggrieved worker should have the right to be represented by an executive of the recognized union or a workman of his choice.
  2. A record of the domestic enquiry should be made in a language understood by the aggrieved employee or his union. A copy of the record should be supplied to him.
  3. The domestic enquiry should be completed within a prescribed period which should be necessarily short.
  4. An appeal against the employer’s order of dismissal should be filed within a prescribed period.
  5. The workers should be entitled to a subsistence allowance during the period of suspension.7

The second NCL (2002), while taking a note of the absence of intermediate grades of penalties for different kinds of offences under the model standing orders, did not consider the preceding Recommendations to be a satisfactory arrangement. In this regard the Commission recommended, ‘The appropriate government may also frame model standing orders, including the classification of Acts of misconduct as major and minor, and providing for graded punishments depending on the nature and gravity of the misconduct, and publish them in the official gazette.8 The Commission at another place recommended that the Industrial Disputes Act, 1947, may be amended to the effect that: ‘where a worker has been dismissed or removed from service after a proper and fair enquiry on charges of violence, sabotage, theft and /or assault, and if the labour court comes to the conclusion that the grave charges have been proved, then the court will not have the power to order reinstatement of the delinquent worker.9

The Recommendations of the Commissions, if properly implemented, may reduce the incidence of litigation on disciplinary matters substantially and minimize the possibility of the reversal of management’s orders by the authorities and the courts.

SUMMARY
PART I
  1. The main objective of the Industrial Employment (Standing Orders) Act, 1946, is to statutorily define certain terms and conditions of employment such as schedule of working hours, attendance and late-coming, leave and holidays, absenteeism, redressal of grievances, Acts or omissions constituting misconduct, termination of employment and dismissal and make them known to the workmen.
  2. The employers of industrial establishments, employing 100 or more workmen (50 or more in many cases now), to frame standing orders on prescribed matters and get these certified by the Certifying Officer. Certified standing orders have legal applicability. There is also a provision of appeal against the decision of the Certifying Officer.
  3. So long as certified standing orders are not in force, the model standing orders prescribed by the central or state government will remain in operation. The model standing orders framed under the central rules lay down in detail a number of matters relating to the terms and conditions of employment such as classification of workmen, hours of work and shift-working, leave and holidays, attendance and late-coming, termination of employment, Acts or omissions constituting misconduct, suspension and punishments for misconduct including dismissal. Many industrial establishments have framed standing orders in line with the model framed under the central rules.
  4. Certain deficiencies of the Act experienced during the course of its application have been: (i) insufficient association of trade unions or workers’ representatives in the drafting of the standing orders; (ii) delay in certification of the standing orders; (iii) wider scope of litigation on matters covered under them; (iv) unsatisfactory application of the Act in establishments under state sphere; and (v) inadequate enforcement machinery.
PART II
  1. Discipline in industry generally means: (i) observance of rules in operation; (ii) employees’ behaviour in an orderly way; (iii) extending cooperation to fellow workmen and management; (iv) performance of duty in established manner; and (v) avoiding offending co-workers and management.
  2. Maintenance of discipline in industry is vital for the smooth running of the enterprise, maintenance of industrial peace, achieving a satisfactory level of productivity, and promoting industrial morale and job-satisfaction.
  3. Some of the general principles for maintenance of discipline in industry include: (i) observance of rules by management itself; (ii) framing of standing orders in consultation with trade union or workers’ representatives; (iii) clarity in regard to punishments to be inflicted and ensuring these in proportion to the severity of offences committed; (iv) enforcement of rules on an uniform and unbiased basis, (v) giving adequate attention to preventive aspects, and (vi) providing an opportunity to the offender to make representation.
  4. The standing orders in operation in industrial establishments in the country have enumerated quite a number of Acts or omissions constituting misconduct. Some of these such as violence, sabotage, fraud, theft, habitual insubordination, frequent repetition of offences, unauthorized absence for a long period and taking bribes are considered major offences, while many others are of minor nature. In practice, even minor offences are often punished by severe punishments, and major ones by lighter punishments. A large number of disciplinary cases in the country take the form industrial disputes, which often reach the adjudication authorities appointed under the Industrial Disputes Act, 1947, and even the High Courts and the Supreme Court.
  5. The punishments under disciplinary action in industry may take various forms such as (i) oral warning or written reprimand, (ii) fines, (iii) withholding of increments, pay and allowances, (iv) forced leave, (v) stopping promotion, (vi) demotion, (vii) suspension and (viii) dismissal.
  6. The disciplinary procedure in industrial establishments in the country includes: (i) charge-sheeting, (ii) domestic enquiry/enquiry and (iii) inflicting of punishment. In grave cases of indiscipline, the employee alleged to have committed the offence is placed under suspension, and is paid a subsistence allowance at the prescribed rate for the prescribed period.
  7. Both the first and second National Commissions on Labour have recommended measures for improving disciplinary procedure in industry. If implemented, they are likely to make it more effective and acceptable. The second NCL has recommended the adoption of standing orders legislation even in establishments employing 20 or more but less than 50 workmen.
QUESTIONS FOR REVIEW
  1. Why are standing orders important for industrial establishments in the country? What matters relating to terms and conditions of employment do you consider appropriate for coverage under these orders?
  2. Describe the provisions of the Industrial Employment (Standing Orders) Act, 1946, relating to drafting, certification and modification of certified standing orders.
  3. Highlight the deficiencies experienced in the course of working of the Industrial Employment (Standing Orders) Act, 1946, and suggest measures for improvement.
  4. Define ‘industrial discipline’ and explain the approaches and principles for maintain discipline in industry.
  5. Describe the Acts and omissions usually considered misconduct in Indian industries. Justify the need for graded punishments for offences of varying severities.
  6. Explain the disciplinary procedure generally followed in Indian industries. What is the significance of the principles of natural justice in such a procedure?
KEY TERMS

 

Standing orders

Domestic enquiry

Charge-sheeting

Natural justice

Case Study 1

Can withholding of increments take the form of an industrial dispute?

The management of Maharashtra State Electricity Board withheld two increments of a workman on the charges of using abusive language against his superiors, threatening them and consistently refusing to perform his assigned duties. These charges were proved in the domestic enquiry. The workman challenged the order of the management by raising an industrial dispute alleging that the enquiry was not fair. He pleaded that the principles of natural justice were not followed and his action was not a case of unfair labour practice. The management contended that prior to inflicting punishment, all the required procedures were followed the charges against the workman were established in the enquiry and placed relevant documents before the Industrial Tribunal dealing with the case. It also contended that as a result of the non-performance of his normal duties and frequent refusal to do his lawful duties, the management had to face the wrath of the nearby villagers. The Industrial Tribunal accepted the submission of the management and refused to grant any relief to the workman.

Aggrieved by the decision of the Industrial Tribunal, the workman challenged the award by filing a writ petition before the Bombay High Court. The High Court refused to intervene holding that the workman did not level specific allegation of the violation of the principles of natural justice. The workman had also participated in the enquiry proceedings and that there was no flaw in the proceedings. The High Court accordingly dismissed the writ petition filed by the workman [Raghunath Kisan Kale v. Maharashtra State Electricity Board, Bombay High Court (2002), Lab. IC 2393].

Questions

What are the principles of natural justice in regard to a disciplinary procedure?

How could the case of withholding of increments of an individual employee take the form of an industrial dispute?

What do you understand by a domestic enquiry?

Case Study 2

Is following of the formal disciplinary procedure always required for termination of service?

A fitter working in the HEC, Ranchi, filed an application for leave on medical grounds and was absenting from duty. The management asked him to produce a medical certificate from a registered medical practitioner in support of his illness or to join his duty immediately, failing which necessary action would be taken against him. The workman received the intimation, but did not submit the medical certificate nor did he give any explanation or reported for duty. The management again asked him to explain his absence within 1 month; otherwise his lien would be terminated in accordance with the provisions of the standing orders in operation. In absence of any response from the workman, the management struck off his name from the rolls with effect from the date of his unauthorized absence.

The worker challenged the management’s action before the Jharkhand High Court. The single judge of the High Court held that the termination of the lien amounted to illegal retrenchment. The Court also commented that no charge-sheet was issued nor any departmental proceeding initiated against the workman. The Court directed his reinstatement with 50 per cent of back wages.

Aggrieved by the decision of the single judge, the management moved the Division Bench of the High Court in appeal. The Division Bench of the Court set aside the order of the single judge and upheld the termination of the services of the workman making the following observations:

The standing orders in operation in the Corporation state that the workman/employee who remains absent from duty without leave or fails to return to duty after expiry of the leave originally sanctioned or subsequently amended shall be liable to disciplinary action. When the period of such absence exceeds 15 days, the management may terminate his lien on his appointment after giving 1 month’s notice of their intention to terminate his lien, unless the workman/employee returns to duty before the expiry of the period specified in the notice and submits application for regularizing his absence.

The standing orders give an opportunity to the workman to rejoin his duty within a stipulated time or explain his position to the satisfaction of the management. Hence, termination of service of such employee is not a punishment for misconduct. The principles of natural justice are inbuilt in the clause of the standing orders [Heavy Engineering Corporation Ltd., v. Lidha Oraon and Others (2004) II LLJ 506].

Questions

Was it necessary for the management to follow the disciplinary procedure in operation in the corporation?

Was it lawful to insert clauses relating to the termination of employment in the standing orders?

What is the meaning of ‘lien’?