Is the Industrial Employment Act Relevant for Our 150-Employee E-commerce Company? How Do We Find Out?

Dear all,

I am working in an e-commerce company in Andhra Pradesh with 150 employees. Ours is a private limited company.

Is the Industrial Employment (Standing Orders) Act applicable to our organization?

Dear Satishchandra123,

In the state of Andhra Pradesh, effective from 5th July 1999, the IE(SO) Act is applicable to establishments or factories where 50 or more workmen are employed on any day of the preceding 12 months.

In my understanding, the Industrial Employment (Standing Orders) Act 1946 applies to Industrial Establishments (Factories and Manufacturing Activities). For Non-Manufacturing Activities, the Shops & Establishment Acts and Rules of the respective State/Province apply.

I shall be thankful for authentic clarifications.

Harsh K Sharan,
Kritarth Team,
4.6.2020

Industrial Employment (Standing Orders) Act, 1946

I am reproducing below the definition of "Employer" and "Industrial Establishment" under Section 2(d) and 2(e) of the said Act to provide a better understanding. I trust this answers your query.

"d) “employer” means the owner of an industrial establishment to which this Act for the time being applies, and includes—

(i) in a factory, any person named under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948), as manager of the factory;

(ii) in any industrial establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf, or where no authority is so appointed, the head of the department;

(iii) in any other industrial establishment, any person responsible to the owner for the supervision and control of the industrial establishment;

(e) “industrial establishment” means—

(i) an industrial establishment as defined in clause (ii) of section 2 of the Payment of Wages Act, 1936 (4 of 1936), or

(ii) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948), or

(iii) a railway as defined in clause (4) of section 2 of the Indian Railways Act, 1890 (9 of 1890), or

(iv) the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen;"

Process of Certification of Standing Orders

Once you decide to have the company's own Standing Orders, they need to be certified by the competent authority (Deputy Labour Commissioner, Labour Dept., State Govt). The eligibility criteria for CSO is that the company must have a minimum of 50 workmen on its rolls (in some States, 100 workmen are necessary).

Process: You need to prepare DSO (Draft Standing Orders) and submit them to the Labour Dept. (DLC - Dy Labour Commissioner), in five copies. After reviewing them and clarifying the clauses in the DSO with the management of the company, the DLC sends a copy of the DSO to the Union representative(s) in the company for their review and to invite any objections. In the absence of Union representatives, the DLC can send a DSO copy to the workers' representative(s), as informed by the management of the company. After receiving clearance from the Union representative(s) or workers' representative(s), the DLC certifies one copy of the DSO, which then becomes the Certified Standing Orders. The DLC sends this to the company, which may file this copy after making a photocopy of the CSO to be displayed on the notice board of the factory.

The above procedure is adopted for obtaining CSO for an industrial unit having 50/100 workmen on its roll.

Since yours is a traveler's company, why do you want CSO?

If your staff strength is less than 50 (100), you can opt for Model Standing Orders stipulated by the State Government.