ENSURING FAIRNESS: DECODING WORKPLACE CONDUCT THROUGH SECTION 13 OF THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

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This article is written by Nehal Sharma of MIT World Peace University, an intern under Legal Vidhiya.

Abstract:

Imagine you are part of a group of friends who love playing soccer together. To ensure everyone plays fair and follows the rules, you create a set of “team orders” that everyone must follow. These team orders include how long each game will last, how many players are allowed on each team, and the rules for scoring goals. Let’s say one of your friends keeps breaking the rules during the games. Maybe they need to be rougher, constantly pushing other players, or follow the instructions of the team captain. This behavior is unfair and can make the games less enjoyable for everyone. Section 13 of the Industrial Employment (Standing Orders) Act 1946 comes into play in this situation. This section is like a set of workplace rules, just like your team orders for soccer. It allows employers (like the team captain) to penalize employees (like your friend) who break the rules or misbehave at work.

The penalties mentioned in Section 13 can differ depending on the misconduct’s seriousness. For example, if your friend’s behavior is not too severe, they might receive a warning or have to pay a small fine. But suppose their behavior continues to be bad, or they do something wrong. In that case, they might face more severe consequences, like suspension (which means they can’t participate in the games for a while) or even losing their job (which would mean they can’t play with the team anymore). Section 13 also says there needs to be a proper investigation before any penalties are imposed to ensure everything is fair. This means the employer (or the team captain) should listen to both sides of the story, gather evidence, and give the employee a chance to explain themselves. This way, nobody is unfairly punished, and everyone gets a fair opportunity to defend themselves. This article will further discuss Section 13 of the Industrial Employment (Standing Orders) Act 1946.

Keywords: Penalties, Misconduct, Rules, Workplace, Fairness, Investigation, Consequences, Behavior, Code of conduct, Employment, Standing Orders

Introduction:

The Industrial Employment (Standing Orders) Act 1946 is a significant labor legislation enacted in India to regulate the employment conditions of workers in industrial establishments. The Act aims to provide a framework for maintaining discipline, ensuring fair treatment, and promoting orderly conduct in the workplace. It applies to the public and private sectors, encompassing various industries and organizations. The Act establishes a system of “standing orders,” essentially a set of rules and regulations that govern the terms of employment, rights, and obligations of both employers and employees. These standing orders serve as a crucial document that defines the code of conduct, work norms, and other essential aspects of employment in an organization.

The act provides a comprehensive legal framework that outlines the procedure for formulating, certifying, and amending standing orders. It ensures employers and employees know their rights and obligations, creating a transparent and harmonious working environment. The Act emphasizes the principles of fairness, transparency, and social justice. It seeks to strike a balance between the interests of employers and the welfare of employees by addressing issues such as terms and conditions of employment, disciplinary proceedings, penalties for misconduct, and resolving disputes.

Furthermore, the Act recognizes the importance of industrial peace and stability, promoting productive industrial relations. It empowers employers to maintain discipline and order while safeguarding workers’ rights against arbitrary and unfair treatment.

What is a Standing Order?

According to the Industrial Employment (Standing Orders) Act 1946, a standing order refers to a set of rules and regulations that define the terms and conditions of employment for workers in industrial establishments. It is a comprehensive document outlining employers’ and employees’ rights, duties, and obligations in a particular organization or industry. The standing orders serve as a code of conduct that governs various aspects of employment, including working hours, shifts, holidays, leaves, wages, disciplinary procedures, and other essential matters. These orders are designed to provide clarity and consistency in the workplace, ensuring all employees know their rights and obligations. Under the Industrial Employment (Standing Orders) Act 1946, it is mandatory for industrial establishments employing a certain number of workers to draft and certify standing orders. The Act provides a framework for the formulation, certification, and amendment of these orders, ensuring that they comply with the provisions of the Act and are fair to both employers and employees.

Section 13 of the Industrial Employment (Standing Orders) Act 1946 provides employers with the framework to impose penalties on employees found guilty of misconduct. The section ensures that the process is fair, just, and aligned with the principles of natural justice. Section 13 says:

“Section 13 in The Industrial Employment (Standing Orders) Act, 1946

13. Penalties and procedure. —

(1) An employer who fails to submit draft standing orders as required by section 3, or who modifies his standing orders otherwise than in accordance with section 10, shall be punishable with fine which may extend to five thousand rupees, and in the case of a continuing offence with a further fine which may extend to two hundred rupees for every day after the first during which the offence continues.

(2) An employer who does any act in contravention of the standing orders finally certified under this Act or his industrial establishment shall be punishable with fine which may extend to one hundred rupees, and in the case of a continuing offence with a further fine which may extend to twenty-five rupees for every day after the first during which the offence continues.

(3) No prosecution for an offence punishable under this section shall be instituted except with the previous sanction of the appropriate Government.

(4) No Court inferior to that of 1[a Metropolitan Magistrate or Judicial Magistrate of the second class] shall try any offence under this section. state amendments Madhya Pradesh. —In section 13, after sub-section (4), insert the following sub-sections, namely: — “(5) A Court taking cognizance of an offence under sub-section (2) shall state upon the summons to be served on the accused person that he—

(a) may appear by pleader and not in person; or

(b) may, by a specified date prior to the hearing of the charge, plead guilty to the charge by registered letter acknowledgment due and remit to the Court such sum as the Court may, subject to the maximum limit of fine prescribed for the said offence, specify.

(6) Where an accused person pleads guilty and remits the sum in accordance with the provisions of sub-section (5), no further proceedings in respect of the offence shall be taken against him.

(7) Nothing contained in this section shall apply to the continuing offence referred to in sub-section (2).” [Vide Madhya Pradesh Act 18 of 1967, sec. 2 (w.e.f. 1-6-1968)]. Maharashtra: Gujarat. —In section 13, —

(i) in sub-section (1), —

(a) for “who fails to submit draft standing orders as required by section 3, or who modifies his standing orders “, substitute “who modifies the standing orders, model standing orders or amendments “;

(b) for “section 10”, substitute “the provisions of this Act “;

(ii) in sub-section (2), for the words “the standing orders finally certified under this Act for his industrial establishment shall be punishable “, substitute the words “the standing orders, model standing orders or the amendments as finally certified under this Act for his industrial establishment, as the case may be, shall, on conviction, be punished”.

(iii) after sub-section (2), insert the following sub-sections, namely:— “(2A) Whoever contravenes the provisions of this Act or of any rule made thereunder in cases other than those falling under sub-section (1) or sub-section (2), shall, on conviction, be punished with fine which may extend to one hundred rupees and in the event of such person being previously convicted of an offence under this Act, with fine which may extend to two hundred rupees and in the case of a continuing offence with a further fine which may extend to twenty-five rupees for every day after the first during which the offence continues.

(2B) The Court convicting an employer under sub-section (1) or sub-section (2) may direct such employer to pay such compensation as it may determine to any workman directly and adversely affected by the modification or contravention of the standing orders, model standing orders or amendments, as the case may be.

(2C) The compensation awarded under sub-section (2B) may be recovered as if it were a fine and if it cannot be so recovered, the person by whom it is payable shall be sentenced to imprisonment of either description for a term not exceeding three months as the Court thinks fit”. [Vide Bombay Act 21 of 1958, sec. 16 (w.e.f. 15-1-1959); Act 11 of 1960, sec. 87 (w.e.f. 1-5-1960)].” ^[1] ^[2] ^[3]

Analysis of Section 13:

Penalties:

Section 13 grants employers the authority to impose penalties on employees found guilty of misconduct. The Act provides flexibility in determining the types and severity of penalties based on the organization’s standing orders. Common penalties include warnings, fines, suspension, demotion, and termination of employment. This provision empowers employers to address misconduct appropriately and proportionately, considering the offense’s gravity.

Inquiry Procedure:

Section 13 mandates a fair and unbiased inquiry procedure before imposing any penalty. The Act emphasizes the principles of natural justice, ensuring that the employee facing misconduct allegations is provided with a written statement of allegations. Furthermore, the employee must be allowed to present their defense and cross-examine witnesses during the inquiry process. The aim is to uphold procedural fairness and prevent arbitrary or unfair penalties.

Suspension Pending Inquiry:

In cases where the alleged misconduct is serious, Section 13 allows employers to suspend the employee pending the completion of the inquiry. This provision serves multiple purposes. Firstly, it ensures an impartial investigation by preventing any potential interference by the accused employee during the inquiry process. Secondly, it safeguards the smooth functioning of the organization by temporarily removing the employee from the workplace. The Act often requires that employees under suspension be provided with a subsistence allowance to meet their basic needs during the suspension period.

Appellate Authority:

Section 13 establishes an appellate authority to maintain a system of checks and balances in the disciplinary process. This authority is responsible for hearing appeals filed by employees who believe the penalty imposed by the employer is unjust or disproportionate. The appellate authority is typically a higher-ranking official within the organization or an external body designated for this purpose. The existence of an appellate authority provides employees with an avenue for seeking redressal and a fair review of the disciplinary decision.

Time Limit for Imposing Penalties:

Section 13 sets a time limit for imposing employee penalties. It specifies that no penalty for misconduct that occurred more than three months before the initiation of disciplinary proceedings can be imposed. This provision emphasizes the importance of timely action in addressing misconduct and prevents employers from leveraging historical incidents against employees to their disadvantage. By imposing a time limit, the Act ensures prompt resolution of disciplinary matters, preventing undue delay in appropriate action.

Section 13 of The Industrial Employment (Standing Orders) Act 1946 provides a comprehensive framework for addressing employee misconduct in industrial establishments. The provision of penalties, fair inquiry procedures, suspension pending inquiry, establishment of an appellate authority, and the time limit for imposing penalties contribute to a transparent, just, and balanced disciplinary system. Employers and employees must understand and adhere to the provisions outlined in Section 13 to ensure compliance with the Act, promote fair treatment, and maintain discipline within the workplace.

Looking at some case laws,

Indian Airlines Ltd vs. Prabha D. Kanan^{^[4]}

Section 13 was discussed in this case. Further, the Supreme Court of India emphasized the importance of adhering to the principles of natural justice during inquiry proceedings. The court held that a fair opportunity must be given to the employee to present their case and cross-examine witnesses. Any deviation from these principles could invalidate the disciplinary proceedings and subsequent penalties. This case reinforces the significance of following due process and ensuring a fair and unbiased inquiry.

Punjab National Bank And Ors. The Chief Personnel Vs. Sh. Kunj Behari Misra, Sh. Shanti Prasad Goel^{^[5]}

In this landmark case, the Supreme Court of India laid down essential guidelines on imposing penalties under the Industrial Employment (Standing Orders) Act 1946. The court emphasized that fines should be proportionate to the gravity of the misconduct and that the principles of natural justice must be followed throughout the inquiry process. It highlighted the need for fairness, reasonableness, and consistency in determining penalties, ensuring employers do not misuse their authority.

Tuticorin Stevedors Association … vs. M. Perumal^{^[6]}

The judges considered and discussed several provisions of the Industrial Employment (Standing Orders) Act, 1946. They specifically examined Section 13-A of the Act, which pertains to the interpretation of certified standing orders. This issue falls under the purview of the Industrial Disputes Act. In that particular case, the judges deliberated on the nature of standing orders and the extent to which Section 13-A of the Act limits the jurisdiction of civil courts.

Section 13 of the Industrial Employment (Standing Orders) Act 1946, plays a vital role in maintaining discipline and ensuring fair treatment in the workplace. It provides a framework for employers to impose penalties on employees found guilty of misconduct while also safeguarding the rights of employees by establishing the principles of natural justice. Providing a fair and unbiased inquiry process, the opportunity for employees to appeal against imposed penalties, and the time limit for disciplinary action contribute to a balanced and just system.

By adhering to the provisions of Section 13, employers can maintain a harmonious work environment, deter misconduct, and address disciplinary issues effectively. Moreover, employees can have confidence in the fairness and transparency of the disciplinary process, knowing that their rights are protected. Employers and employees alike need to understand and adhere to the provisions of Section 13, as it serves as a cornerstone in shaping the employer-employee relationship and promoting a culture of accountability and fairness in the workplace.

In conclusion, Section 13 of the Industrial Employment (Standing Orders) Act 1946, embodies the principles of justice, fairness, and accountability. Its provisions on penalties and procedures for employee misconduct strike a balance between employer interests and employee rights. As India’s industrial landscape continues to evolve, Section 13 remains a crucial legislative instrument in ensuring orderly and just conduct within the workplace.

Works Cited

“CONTENTS Industrial Employment (Standing Orders) Act, 1946 Sections Preamble 1. Short title, extent and application 2. Interpr.” Ministry of Labour & Employment, https://labour.gov.in/sites/default/files/Industrial-Employment-Standing-Orders-Act-1946.pdf. Accessed 6 July 2023.
“Penalties and procedure.” Income Tax Department, https://incometaxindia.gov.in/Acts/Industrial%20Employment%20(Standing%20Orders)%20Act,%201946/102120000000005306.htm. Accessed 6 July 2023.
“Punjab National Bank And Ors. The … vs Sh. Kunj Behari Misra, Sh. Shanti … on 19 August, 1998.” Indian Kanoon, https://indiankanoon.org/doc/1347915/. Accessed 7 July 2023.
“Section 13 in The Industrial Employment (Standing Orders) Act, 1946.” Indian Kanoon, https://indiankanoon.org/doc/1026708/. Accessed 6 July 2023.
Sinha, S. “Indian Airlines Ltd vs Prabha D. Kanan on 10 November, 2006.” Indian Kanoon, https://indiankanoon.org/doc/317207/. Accessed 7 July 2023.
“Tuticorin Stevedors Association … vs M. Perumal on 23 February, 1997.” Indian Kanoon, https://indiankanoon.org/doc/169902/. Accessed 7 July 2023.

REFERENCES:

^[1] “Section 13 in The Industrial Employment (Standing Orders) Act, 1946.” Indian Kanoon

^[2] “Penalties and procedure.” Income Tax Department

^[3] “CONTENTS Industrial Employment (Standing Orders) Act, 1946 Sections Preamble 1. Short title, extent and application 2. Interpr.” Ministry of Labour & Employment

^[4] Indian Airlines Ltd vs Prabha D. Kanan on 10 November, 2006.

^[5] Punjab National Bank And Ors. The … vs Sh. Kunj Behari Misra, Sh. Shanti … on 19 August, 1998

^[6] Tuticorin Stevedors Association … vs M. Perumal on 23 February, 1997