Thread Started by #venkateswarlu-tumati

Der Sir amd Umakanth Sir,
Applicability of Industrial Establishment (Standing Orders) Act 1946 or Certified Standing Order of factory -
Please guide me on the following lines:
1. What is the scope of Industrial Establishment (Standing Orders) Act 1946 - in concern of Contract workmen
2. A Contractor have 300 workmen, has the contractor need to get certification or
3. is Certified Standing Order of company applicable or
4. shall the contractor follows the Concern company Certified Standing Order to initiate disciplinary action against their workmen
5. what is the procedure to follow for terminating his contract workmen
If any....
Thanking you,
17th January 2019
Hi AM, the following links also for better understanding of the provisions of the act :
In order to understand the provisions better w.r.t. employing "contract labour" one has to read the both the attached acts which concurrently relevant on the subject.
Now, clarifications on your queries:
Qn.1. What is the scope of Industrial Establishment (Standing Orders) Act 1946 - in concern of Contract workmen
= The SO as applicable to the employees of the Principal Employer suo-moto apply to contract workmen also.
Quote: "1. Short title, extent and application.—(1) This Act may be called the Industrial Employment
(Standing Orders) Act, 1946.
(2) It extends to [the whole of India
[(3) It applies to every industrial establishment wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months:
Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any industrial establishment employing such number of persons less than one hundred as may be specified in the notification.
2.[(i) “wages” and “workman” have the meanings respectively assigned to them in clauses (rr) and
(s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947).]
xxx ID ACT Sec.2-....[(s) "workman" means any person (including an apprentice employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, function mainly of a managerial nature.]
Qn.2. A Contractor have 300 workmen, has the contractor need to get certification or ?
= The Certification of the SO is the responsibility of the employer, an "Industry" to whom the SO Act is applicable. Registration. Yes, the contractor should have the required registration/licence. The Principal Employer also issue necessary forms under the act to employ the Contractor under the CLR&A Act.
" 9. Effect of non-registration.- No principal employer of an establishment, to which
this Act applies, shall--
(a) in the case of an establishment required to be registered under section 7, but which has not been registered within the time fixed for the purpose under that section,
(b) in the case of an establishment the registration in respect of which has beenrevoked under section 8, employ contract labour in the establishment after the expiry of the period referred to in clause (a) or after the revocation of
registration referred to in clause (b), as the case may be.
"13. Grant of licences.- (1) Every application for the grant of a licence under sub-section
(1) of section 12 shall be made in the prescribed form and shall contain the particulars regarding the location of the establishment, the nature of process, operation or work for which contract labour is to be employed and such other
particulars as may be prescribed.
(2) The licensing officer may make such investigation in respect of the application received under sub-section (1) and in making any such investigation the licensing officer shall follow such procedure as may be prescribed.
(3) A licence granted under this Chapter shall be valid for the period specified therein and may be renewed from time to time for such period and on payment of such fees and on such conditions as may be prescribed.
Qn.3. is Certified Standing Order of company applicable or ?
= Answer to this is as in Qn.1.
Qn.4. shall the contractor follows the Concern company Certified Standing Order to initiate disciplinary action against their workmen?
= The Principal Employer bound to instruct the Contractor to proceed as per the rules applicable therein. However the PE doesn't prosecute the contract labour directly.
Qn.5. what is the procedure to follow for terminating his contract workmen.
= As I said in 4 above, the Principal Employer however will not directly take any disciplinary action against the erring contract workmen, instead will issue necessary report/facts of the case to the contractor for appropriate action as per the rule applicable to the contract labour.
17th January 2019 From India, Bangalore

Attached Files
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File Type: pdf Contract_Labour_Regulation_and_Abolition_Act_1970.pdf (125.6 KB, 35 views)
File Type: pdf The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018.pdf (1.68 MB, 81 views)

Dear AM,
Generally, the Contract Labor System is a form of indirect labor through the practice of outsourcing of certain activities of an industrial establishment for one or more reasons like economy, specialisation, flexible hire and fire, elimination of constant and close supervision etc. Under this outsourcing arrangement which can either be the entire activity or the man power only, the establishment which gets the services is the outsourcer and the other who renders the service is the outsourcee.
Let me first present the picture of a Contractor's Establishment with reference to the essential nature of its activity.
(1) If the activity of an establishment is manufacturing or rendering service on behalf of any other person/entity in the latter's place of business or a mere supply of labor to one or more such entities under a contract for service, the relationship between the two becomes that of contract for service, such an establishment becomes a Contract Labor Establishment and the workmen employed therein are its direct labor. In the context of the CLRA Act,1970 which comes into play, the outsourcer becomes the Principal Employer, the outsourcee becomes the Contractor and the labor of the contractor becomes Contract Labor.
(2) Alternatively, however, only the entire outsourced activity can be left to the outsourcee i.e the contractor to be done at his own facility or premises. In such a situation, the CLRA Act,1970 has no application despite the subsistence of a contract for service between the outsourcer and the outsourcee.
It automatically implies that there exists a direct employer- employee relationship between the outsourcee i.e the contractor and his labor. So, for all practical purposes, the contractor's establishment becomes an industrial establishment and hence the application of all the labor laws including the IE(SO)Act,1946 subject to the criteria for coverage. Thus I think that I've answered your questions with serial nos. 1,2 and 5.
Regarding q.nos. 3 and 4, "No" is the answer since there is no direct employment relationship between the PE and the Contract Labor.
17th January 2019 From India, Salem
Dear Colleague,
The Contractor referred to in this post is engaging 300 workers and perhaps must have registered his establishment under State Shops and East Act. Therefore, the Industrial Empl Standing Orders Act/Rules will apply to his establishment.
Until such time certified standing orders are in place, the Model Standing Orders have to be followed by him.
The certified standing orders , if any, of the Principal Employer ,will not apply to him.
For disciplinary action against the contract worker, he will have to follow provisions of the Model Standing Orders and principles of natural justice.
Vinayak Nagarkar
HR- Consultant
17th January 2019 From India, Mumbai
Dear Colleague,
The Standing Order is nothing but a guidelines/constitution of an establishment. The applicability of SO is both for the employee on direct roll or contractual as per their rules framed in SO by the employer.
The establishment of Contractor can have their own SO if the engagement is 100 or more.
20th January 2019 From India, Mumbai
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