Standing Orders In Labour Law

The Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as “the Act”) requires the industrial establishments in India to define and notify the terms of employment.

What Are Standing Orders?

Standing Orders is a set of rules guiding the conditions of service in an industrial establishment. It covers various aspects of employment, as an attempt to establish a standardised framework for employer employee relationships.

Following are the aspects related to Standing Orders:

Objective Of The Act

The Act specifies that the employers in the industrial establishments should clearly define the terms of employment. The objective of the Act is to ensure uniformity in terms of employment and provide transparency to the employees. It covers different aspects, including classification of workers, working hours, wages, shift work, leave, termination procedure and grievance redressal.

Applicability And Extent Of The Act

• The Act is applicable to industrial establishments employing more than 100 workmen.
• However, the government can extend the application of this Act to those industries employing less than 100 workmen through issuing a Notification in the Official Gazette.
• This Act is not applicable to the industries covered under Chapter VII of the Bombay Industrial Relations Act, 1946, and industrial establishments covered under the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961.
• The Act does apply to industrial establishments under the control of the Central Government, even though they come within the purview of the Madhya Pradesh Act.

Contents Of Standing Orders

These orders shall provide for the matters specified in the schedule to the Act, including,

• Classification of workmen
• Work hours, holidays, paydays, and wage rates
• Shift work
• Attendance and late-coming
• Leave and holiday procedures
• Entry and search procedures
• Closure and reopening of sections, temporary work stoppages
• Termination of employment and notice periods
• Suspension or dismissal for misconduct
• Grievance redressal mechanisms

Submission Of Draft Standing Orders

• It is the obligation of the Employers to submit five copies of Draft Standing Orders to the Certifying Officer within six months after the provisions of the Act have been made applicable to their establishment.
• The draft shall include provisions for every matter referred to in the Schedule and, if available, conform to the prescribed Model Standing Orders.
• The Draft must be accompanied by a statement showing the workmen employed, including their trade union affiliation.
• Groups of employers within similar establishments can submit a joint draft under conditions prescribed.

Certification Procedure

• It is the duty of the Certifying Officer to adjudicate the fairness and reasonableness of the Standing Orders.
• After receiving the draft, the Certifying Officer has to forward a copy to the trade union of the workmen (if no trade union, then to the workmen) along with a notice inviting any objections within 15 days.
• The Certifying Officer holds a hearing, allowing the employer and workmen (or their representatives) to present their case.
• The Certifying Officer decides what changes or modifications are required to make the draft certifiable.
• The Certifying Officer certifies the draft after incorporating all such changes which may be required and sends certified copies to the employer and workmen (or their agents) within seven days.

Appeals

• Parties aggrieved, including employers, workmen, trade unions or their agents can appeal against an order passed by the Certifying Officer within 30 days.
• The appellate authority decides finally either by confirming the certified Standing Orders or by amending them.
• Copies of the order along with the certified Standing Orders are forwarded by the appellate authority to the Certifying Officer, employer and workmen (or their representatives) within seven days.

Operation Date

• Certified Standing Orders take effect after 30 days of the date of issuance, if no appeal is filed, or after seven days of the date of Order of the appellate authority if an appeal is filed.

Registration And Posting

• The Certifying Officer registers certified Standing Orders and upon request, provides copies thereof for a fee
• The employer shall ensure that text of certified Standing Orders is posted in English and in the majority language of workmen concerned in such places and manner as may be desired.

Modification

• Standing Orders can only be modified after six months from its effective date, and this modification must be agreed to by the employer and the workmen (or their representatives).
• An employer or workman (or their representatives) can apply for modification to the Certifying Officer by submitting five copies of the proposed changes.
• If alterations are proposed by agreement, a certified copy of that agreement must be filed with the application.
• The certification process for amendments is the same as that applied to initial Standing Orders.
• The amendment related provisions do not apply to establishments in Gujarat and Maharashtra.

Subsistence Allowance

• The suspended workmen are entitled to subsistence allowance.
• The allowance is 50% of wages for the first 90 days of suspension and 75% for the remaining period if delay in the disciplinary proceedings is not the workman's fault .
• The power to settle disputes concerning subsistence allowance has been granted to the Labour Court whose verdict is final and binding
• If state laws provide for more beneficial subsistence allowance provisions then those will be applicable in that state.

Powers Of Certifying Officer And Appellate Authority

• These functionaries have the powers of the Civil Court to take evidence, administering oaths and compelling the attendance of witnesses and document production.
• They are considered as Civil Courts under Code of Criminal Procedure, 1973.
• They have the power to correct clerical mistakes and omissions in their orders.

Prohibition Of Contradictory Evidence

• Oral evidence which contradicts the certified Standing Orders is not admissible in the Court.

Temporary Operation Of Model Standing Orders

• Prescribed Model Standing Orders are operative from the date the Act becomes applicable to an establishment until certified Standing Orders of the establishment.
• This provision is not applicable to establishments in the States of Gujarat and Maharashtra.
• Where there are certified Standing Orders for one class of workmen (e.g. daily-rated) but not for any other class (e.g. monthly rated), the Model Standing Orders shall be applicable to the latter class of workmen until they have certified Standing Orders of their own.

Penalties

• Employers are liable for penalties for failing to submit draft Standing Orders, make wrongful amendments or violating certified Standing Orders.
• Prosecution requires prior approval from the government.
• Only Metropolitan or Judicial Magistrates of the second class or above courts are empowered to try these offences.

Interpretation

• Issues relating to the application or interpretation of certified Standing Orders can be referred to the Labour Courts as mentioned under the Industrial Disputes Act, 1947 and their decision shall be final.

Exemptions

• The government can exempt any establishment or class of establishments from the provisions of the Act.

Delegation of Powers

• The government can delegate any of the powers conferred by the Act to subordinate officers or state governments.

Rule-Making Power

• The government can make rules to implement the Act, including defining additional matters for the Schedule, set out Model Standing Orders, and prescribe procedures.
• Representatives of employers and workmen shall be consulted before the government makes any rule relating to the Schedule.
• The rules framed by the Central Government rules are always under the scrutiny of the parliament.

Case Laws Related To Standing Orders

U.P. State Electricity Board And Ors vs. Hari Shanker Jain And Ors (1978)

The Court held that the Industrial Employment (Standing Orders) Act, 1946 is a special enactment relating to matters enumerated in its schedule. To this end, the rules framed by the Electricity Board on the said matters are invalid unless they are notified by the Government under Section 13-B of the Act or certified by the Certifying Officer under Section 5 of the Act.

The Court stated that the Industrial Employment (Standing Orders) Act was specifically enacted to define and safeguard reasonable terms of employment for workers in industrial settings. It requires employers to make and to have their Standing Orders certified by a quasi-judicial authority to ensure fairness and reasonableness.

Management Of Cipla Ltd. vs. Jayakumar R. And Anr. (1997)

This case deals with the in relation to Standing Orders and individual employment contracts regarding the issue of transfer of employees. The respondent, employee of Cipla Ltd., claimed that his transfer from Bangalore to Mumbai is violative of the Standing Orders of the company.

The Court held the following regarding Standing Orders:

• It held that inter-establishment transfers were not dealt with under the Standing Orders in question. The Standing Orders permitted inter-departmental transfer of employees within Bangalore, however, it is silent on transfers to different locations.
• While interpreting the case, the Court clarified the importance of reading the individual employment contracts along with the Standing Orders. Clause 3 in the letter of appointment of the respondent allowed for transfer to other company establishments in India. The Court found that there is no conflict between this clause and the Standing Orders.
• The Court finally held that the Standing Orders had no restriction on the ability of the company to transfer the respondent. As there was no direct conflict between the Standing Orders and the transfer clause in the appointment letter, the company is justified in transferring the employee.

In brief, this case highlights the following points about the Standing Orders:

• They are not exhaustive documents. Standing Orders may not include all conceivable employment situations.
• They are to be construed in the light of other relevant agreements, such as individual employment contracts.
• Specific contractual terms can override the general provisions of Standing Orders if there is no inconsistency between the both.

Bhartiya Kamgar Karmachari Mahasangh vs. M/S. Jet Airways Ltd. (2023)

The Court held that certified standing orders have statutory sanction and are in the nature of a contract between employer and workman. Therefore, neither the employer nor the workman can create a contract that supersedes the statutory contract provided in the certified standing orders.

Union Of India & Ors. vs. K.Suri Babu (2023)

The Supreme Court held that the Standing Orders, framed under the Industrial Employment (Standing Orders) Act, 1946, took precedence in matters of disciplinary proceedings against workmen over the Central Civil Services (Classification, Control and Appeal) Rules, 1965. A Standing Order is specific rule relating to conditions of service of workmen in an industrial establishment mainly devised to protect rights and ensure fair treatment at the hands of the employer.

The Court observed that the Act of 1946 was enacted to establish certainty in the conditions for the service of workmen, placing the responsibility on the employers to create fair conditions, which would include disciplinary action too. Standing Orders are not ordinary orders but have statutory authority. The employer is bound by them and cannot disregard or modify them without following the procedure provided under the 1946 Act.

Section 13B of the 1946 Act provides for the applicability of rules like the CCA Rules to workmen in industrial establishments. However, the Court had clarified that a specific notification is required to exclude the operation of the 1946 Act. This Notification must be issued by the appropriate government in the Official Gazette.

Significance And Impact

The Act provides a structured approach to employer employee relations in industrial settings by promoting transparency, fair treatment of workers. By mandating the written employment terms and uniform conditions, it will mitigate disputes as well as compliance with labour standards.

The Act plays a tremendous role in labour law. It influences policies of industrial relations across India. It can be used in shaping and regulating the employment conditions in the industrial sector of India.

Conclusion

The Industrial Employment (Standing Orders) Act, 1946 is one of the cornerstones in the labour legislation as it addresses the needs of employers and employees, offering standard terms in employment. The law requires precise documentation and certification of the conditions of employment, which contributes to an organised and even working environment. The objective of Standing Orders is to bring clarity and consistency in the employment conditions. It aids in ensuring fair treatment and balanced relations between employers and employees.