Earlier, the economic law of supply and demand in the labor market existed between employers and workers as a mutually beneficial deal.
The mutual bargain was treated as such grants, as the terms and conditions of employment for workers are being kept safe. They had an abiding confidence in the unity of this law. But as the law, their faith has proven incorrect.
Workers later found that they have not adequately processed fair bargaining power to secure terms and conditions of their service; they organise themselves into trade unions and began to emphasize collective bargaining with the employer.
With the advent of trade unions and collective bargaining, new problems began to create and maintain industrial peace and production for society. Workers began to put forth their demands.
The recognition that while, such raw a deal had been presented to workers by employers, which were not able to define their terms of service, and was sure to be in a situation of industrial conflict, the Legislature stepped sought to introduce Industrial Employment (Standing orders) Bill, 1946.
The Industrial Employment (Standing Orders) Act, of 1946 requires employers to define with sufficient precision the conditions of employment under them and to make the said conditions known to the workmen by them. The Act also serves the purpose of having uniform Standing Orders.