INTERPRETATION AND ENFORCEMENT OF STANDING ORDERS

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This article is written by Gitesh Jain of Amity University, Rajasthan, Intern at Legal Vidhiya

Introduction

The Standing Orders of an organization are a set of rules and regulations that govern the conduct of employees within the workplace. These orders are usually created by the management of the organization and are designed to ensure that employees adhere to specific guidelines while carrying out their duties.

In the context of the Industrial Employment (Standing Orders) Act, 1946, these orders are legally binding documents that must be created and registered with the appropriate authority. The Act provides for the regulation of conditions of employment in industrial establishments and requires that employers create standing orders that specify the terms and conditions of employment for their workers.

The standing orders must be clear and unambiguous, and they must cover a range of issues such as the duties and responsibilities of employees, working hours, leave entitlements, disciplinary procedures, and grievance redressal mechanisms. The purpose of these orders is to create a transparent and consistent framework for employment that protects the interests of both employees and employers. The interpretation and enforcement of these standing orders are crucial for ensuring a fair and equitable workplace. Employers must ensure that their standing orders are in compliance with the provisions of the Act and that they are being implemented correctly. This requires a thorough understanding of the Act and its provisions, as well as a commitment to upholding the principles of fairness and transparency in the workplace. The enforcement of these standing orders is the responsibility of the management of the organization, and they must take appropriate action if an employee is found to be in violation of any of the orders. At the same time, employees must be aware of their rights and responsibilities under the standing orders and must adhere to them to avoid any disciplinary action.

Application of act

The Industrial Employment (Standing Orders) Act, 1946, applies to all industrial establishments that employ 100 or more workers, and it is mandatory for such establishments to create and register standing orders with the appropriate authority. The Act also applies to industrial establishments with fewer than 100 workers if the State Government has extended the provisions of the Act to such establishments.

The Act applies to all types of industrial establishments, including manufacturing units, mines, oilfields, railways, and other such industries. It covers all categories of workers, including permanent, temporary, and contract workers. The Act provides guidelines for the creation and registration of standing orders, which must cover a range of issues related to employment, such as the duties and responsibilities of employees, working hours, leave entitlements, disciplinary procedures, and grievance redressal mechanisms. The Act also specifies that any changes made to the standing orders must be approved by the appropriate authority and that the orders must be displayed prominently in the workplace for the benefit of all employees. The Act places a responsibility on the employer to enforce the standing orders and take appropriate disciplinary action against any employee who violates them. At the same time, it also provides for a grievance redressal mechanism that allows employees to raise their concerns and complaints through a designated channel.

Exclusion of certain industrial establishments

The Industrial Employment (Standing Orders) Act, 1946, provides for the regulation of conditions of employment in industrial establishments. However, certain industrial establishments are excluded from the purview of the Act.

The Act does not apply to industrial establishments that are primarily of a seasonal character or are intermittent in nature. This exclusion applies to establishments such as sugar mills, cotton ginning and pressing factories, and tea plantations, which operate only during a particular season or for a limited period. The Act also excludes establishments that are engaged in work that is primarily of a casual nature. This exclusion applies to establishments such as loading and unloading docks, wharves, and warehouses, where the work is of a casual nature and employees are not engaged in a regular employment relationship.

Power to exempt: Section 14

Section 14 of the Industrial Employment (Standing Orders) Act, 1946, empowers the appropriate government to exempt any industrial establishment or class of industrial establishments from the provisions of the Act if it is satisfied that the standing orders in force in the establishment or class of establishments provide benefits to workers that are not less favorable than those provided under the Act.

The appropriate government may grant such an exemption for a specific period, subject to such conditions as it may impose. The government may also withdraw the exemption if it is satisfied that the standing orders in force in the establishment or class of establishments no longer provide benefits that are not less favorable than those provided under the Act.

The power to grant exemptions is intended to provide flexibility in the application of the Act and to ensure that the interests of workers are protected. The appropriate government may grant exemptions based on factors such as the size of the establishment, the nature of the work, and the presence of alternative arrangements for the regulation of conditions of employment.

Special features of the act

The Act envisages three important features, they are:

Concept of Standing Orders.
Adjudicatory powers of the Certifying Officer; and
CSOs (short for – Certified Standing Orders) have the force of law.

Whether a contract can override the certified Standing Orders?

No, a contract cannot override the certified Standing Orders under the Industrial Employment (Standing Orders) Act, 1946. The Act requires employers of industrial establishments to create and register Standing Orders that specify the terms and conditions of employment for their workers.

Once the Standing Orders have been certified by the appropriate authority, they become legally binding on both the employer and the workers. Any agreement or contract that is inconsistent with the provisions of the certified Standing Orders is void to the extent of such inconsistency.

Therefore, even if a worker has signed a contract that contains terms and conditions that are different from those specified in the certified Standing Orders, the provisions of the Standing Orders will prevail. The worker is entitled to the benefits and protections provided under the Standing Orders, regardless of any agreement to the contrary.

Standing Orders

Section 2(g) of the Act states that “standing orders” are the rules relating to matters set out in the Schedule, i.e., with reference to:

The classification of workmen.
Manner of intimation to workers about work and wage-related details.
Attendance, conditions of granting leaves, etc.
Rights & liabilities of the employer/ workmen in certain circumstances.
Conditions of ‘termination of’/ ‘suspension from’ employment; and
Means of redressal for workmen, or any other matter.

Submission of Draft Standing Orders: Section 3

Section 3 of the Industrial Employment (Standing Orders) Act, 1946, requires every employer of an industrial establishment employing 100 or more workers to submit draft Standing Orders to the Certifying Officer for certification.

The draft Standing Orders should contain provisions that specify the following:

Manner of intimating to workers periods and hours of work, holidays, paydays, and wage rates.
Conditions under which overtime is to be worked and the rates of payment for such overtime.
Shift working.
Attendance and late coming.
Leave rules.
Suspension or dismissal for misconduct and the procedure for imposing such penalties.
Grievance redressal mechanism.
Any other matter which may be prescribed by the appropriate government.

The employer must submit the draft Standing Orders in the prescribed form and manner, along with a statement of the number of workers employed in the establishment, to the Certifying Officer. The Certifying Officer then examines the draft Standing Orders and may modify them if necessary.

The employer and the employees have the right to appear before the Certifying Officer and make representations in respect of the draft Standing Orders. Once the Standing Orders have been certified by the Certifying Officer, they become legally binding on the employer and the employees.

Conditions for Certification of Standing Orders: Section 4

Section 4 of the Industrial Employment (Standing Orders) Act, 1946, lays down the conditions that must be fulfilled for the certification of Standing Orders by the Certifying Officer. The Certifying Officer is an official appointed by the appropriate government to examine and certify the Standing Orders submitted by the employer of an industrial establishment.

The conditions for certification of Standing Orders under Section 4 are as follows:

The Standing Orders must be clear and precise, and must not be in conflict with any law for the time being in force.
The Standing Orders must specify the rights and obligations of both the employer and the employees.
The Standing Orders must not be prejudicial to the interests of the employees.
The Standing Orders must be consistent with the Model Standing Orders prescribed by the appropriate government, if any.
The Standing Orders must be displayed prominently in the establishment in English and in the language understood by the majority of the workers.

The Certifying Officer examines the draft Standing Orders submitted by the employer and may modify them if necessary to ensure that they meet the above conditions. The employer and the employees have the right to appear before the Certifying Officer and make representations in respect of the draft Standing Orders.

Once the Standing Orders have been certified by the Certifying Officer, they become legally binding on both the employer and the employees. Any modifications to the Standing Orders require the consent of both the employer and the employees and must be submitted to the Certifying Officer for certification.

Certification Process: Section 5

Section 5 of the Industrial Employment (Standing Orders) Act, 1946, deals with the certification process of Standing Orders by the Certifying Officer. The Certifying Officer is an official appointed by the appropriate government to examine and certify the Standing Orders submitted by the employer of an industrial establishment.

The certification process under Section 5 involves the following steps:

Submission of draft Standing Orders: The employer of an industrial establishment employing 100 or more workers is required to submit draft Standing Orders to the Certifying Officer in the prescribed form and manner, along with a statement of the number of workers employed in the establishment.
Examination of draft Standing Orders: The Certifying Officer examines the draft Standing Orders and may modify them if necessary to ensure that they meet the conditions laid down in Section 4 of the Act. The employer and the employees have the right to appear before the Certifying Officer and make representations in respect of the draft Standing Orders.
Certification of Standing Orders: Once the Standing Orders have been examined and modified (if necessary) by the Certifying Officer, they are certified by him. The certified Standing Orders are then binding on both the employer and the employees.
Display of certified Standing Orders: The certified Standing Orders are required to be prominently displayed in the establishment in English and in the language understood by the majority of the workers.
Filing of certified Standing Orders: The employer is required to file five copies of the certified Standing Orders with the Certifying Officer. One copy is kept by the Certifying Officer, one is sent to the appropriate government, and the remaining copies are kept by the employer for reference.

Appeals: Section 6

Section 6 of the Industrial Employment (Standing Orders) Act, 1946, deals with the appeals that can be made against the decision of the Certifying Officer regarding the certification of Standing Orders.

According to Section 6, any employer or workman aggrieved by the decision of the Certifying Officer regarding the certification of Standing Orders may appeal to an appellate authority appointed by the appropriate government. The appeal must be made within 30 days from the date on which the certified Standing Orders are made available to the parties concerned.

The appellate authority has the power to confirm, modify, or reverse the decision of the Certifying Officer. The decision of the appellate authority is final and binding on the parties concerned.

It is important to note that the filing of an appeal does not suspend the operation of the certified Standing Orders unless the appellate authority directs otherwise.

Modification of Standing Order: Section 10

The process of modification of Standing Orders involves the following steps:

Preparation of draft modification: The employer prepares a draft modification of the certified Standing Orders.
Consultation with employee representatives: The employer consults the employee representatives, if any, regarding the proposed modification.
Submission of draft modification: The employer submits the draft modification to the Certifying Officer for approval. The submission should be in the same manner as the submission of draft Standing Orders.
Examination by the Certifying Officer: The Certifying Officer examines the proposed modification and may approve it with or without modifications or reject it.
Certification of modified Standing Orders: If the Certifying Officer approves the proposed modification, he certifies the modified Standing Orders, and they become binding on the employer and the employees.
Display and filing of modified Standing Orders: The employer is required to display the modified Standing Orders in the establishment and file a copy with the Certifying Officer, in the same manner as the certified Standing Orders.

It is important to note that the process of modification of Standing Orders is similar to the process of certification of Standing Orders. The main difference is that in the case of modification, the employer proposes the changes, whereas in the case of certification, the employer submits the draft Standing Orders.

Payment of Subsistence Allowance: Section 10-A

Section 10-A of the Industrial Employment (Standing Orders) Act, 1946, deals with the payment of subsistence allowance to workmen who are suspended pending inquiry or disciplinary action.

According to this section, if a workman is suspended by the employer pending inquiry or disciplinary action, and the inquiry or disciplinary proceedings against the workman are not concluded within a period of 90 days, the workman shall be entitled to receive a subsistence allowance. The subsistence allowance payable shall be equal to 50% of the wages which the workman was entitled to immediately before the suspension.

The subsistence allowance shall be paid to the workman within a period of 30 days from the date on which it becomes payable, and in case of any delay in payment, the employer shall be liable to pay simple interest at the rate of 12% per annum on the amount payable.

It is important to note that the entitlement to subsistence allowance arises only if the inquiry or disciplinary proceedings are not concluded within a period of 90 days from the date of suspension. If the proceedings are concluded within the stipulated period, the workman shall not be entitled to receive the subsistence allowance.

Temporary Application of Model Standing Orders: Section 12-A

Section 12-A of the Industrial Employment (Standing Orders) Act, 1946, deals with the temporary application of Model Standing Orders.

According to this section, if the Certifying Officer is of the opinion that there are no certified Standing Orders in force in an industrial establishment, he may direct the employer to follow the Model Standing Orders set out in the Schedule of the Act. The Model Standing Orders shall be deemed to be the certified Standing Orders of the establishment until the employer frames and certifies its own Standing Orders in accordance with the provisions of the Act.

The temporary application of Model Standing Orders can also be ordered by the Appropriate Government in respect of any industrial establishment or class of industrial establishments, by notification in the Official Gazette. The Model Standing Orders shall have effect as if they were certified Standing Orders of the establishment or class of establishments until the employer frames and certifies its own Standing Orders in accordance with the provisions of the Act.

It is important to note that the temporary application of Model Standing Orders is meant to be a temporary measure until the employer frames and certifies its own Standing Orders. The Model Standing Orders are only applicable in the absence of certified Standing Orders and are not meant to be a substitute for certified Standing Orders.

Penalties and procedure: Section 13

Section 13 of the Industrial Employment (Standing Orders) Act, 1946, deals with penalties for contravention of the provisions of the Act, and the procedure to be followed for such contraventions.

According to this section, any employer who contravenes the provisions of the Act or fails to comply with the directions of the Certifying Officer or the Appellate Authority shall be punishable with a fine of up to Rs. 500. If the contravention or failure continues, the employer shall be liable to a further fine of up to Rs. 50 for each day during which the contravention or failure continues after the conviction for the first such contravention or failure.

The section also provides for the appointment of Inspectors for the purposes of the Act. An Inspector may enter any industrial establishment, inspect the Standing Orders and take copies thereof, examine any person, and require the production of any registers, records or other documents required to be kept under the Act. If the Inspector is of the opinion that any contravention of the provisions of the Act has taken place, he may initiate proceedings against the employer.

The procedure for initiating proceedings against the employer is also outlined in this section. The Inspector shall submit a report to the Certifying Officer, who shall then issue a notice to the employer requiring him to show cause why proceedings should not be initiated against him. If the Certifying Officer is satisfied that a contravention of the provisions of the Act has taken place, he may initiate proceedings against the employer and follow the prescribed procedure for such proceedings.

Interpretation of Standing Orders: Section 13-A

Section 13-A of the Industrial Employment (Standing Orders) Act, 1946, deals with the interpretation of Standing Orders.

According to this section, any question or dispute arising as to the interpretation of any Standing Order that has been certified under the Act shall be referred to the Certifying Officer or any other authority specified in this behalf by the Appropriate Government. The Certifying Officer or the specified authority shall, after giving the parties concerned an opportunity of being heard, decide the question or dispute.

The decision of the Certifying Officer or the specified authority on the question or dispute referred to him shall be final and binding on the parties concerned, subject to the right of the parties to approach the appropriate court for relief, if any, in accordance with the provisions of any law for the time being in force.

It is important to note that this section applies only to the interpretation of certified Standing Orders under the Act. Any dispute or question arising as to the interpretation of uncertified Standing Orders or other terms and conditions of employment would not fall within the purview of this section.

Delegation of Powers: Section 14-A

According to this section, the appropriate Government may, by notification in the official gazette, delegate any of its powers under this Act to any officer subordinate to it, subject to such conditions and restrictions as it may specify in the notification.

The delegated officer shall exercise the powers delegated to him subject to the conditions and restrictions specified in the notification. Any act done by the delegated officer in the exercise of his delegated powers shall be deemed to have been done by the appropriate government itself.

It is important to note that the delegation of powers under this section does not affect the power of the appropriate government to exercise its powers under this Act. The appropriate government may, at any time, revoke or modify the delegation of powers made under this section.

Power to make rules: Section 15

The rules made under this section may provide for a range of matters, including but not limited to the following:

The form and manner of submission of draft standing orders to the certifying officer
The conditions and qualifications of the certifying officer and the appellate authority
The fees to be paid for certification and appeals.
The manner in which notice of standing orders is to be given to workmen.
The form and manner of complaints by workmen in case of breach of standing orders
The procedure for referring disputes arising out of the interpretation of standing orders to the certifying officer or any other specified authority.

The rules made under this section may also provide for any other matter which is necessary for carrying out the purposes of the Act.

It is important to note that any rules made under this section shall be laid before the state legislature or both houses of parliament (depending on whether the appropriate government is a state government or the central government, respectively) and shall be subject to their approval.

Landmark Judgements

Hindustan Lever v. Workmen

The Hindustan Lever v. Workmen case is a landmark labor law case in India. It was decided by the Supreme Court of India in 1974. The case involved a dispute between the management of Hindustan Lever Limited (now known as Hindustan Unilever Limited) and its workmen over the termination of services of certain employees.

The dispute arose when Hindustan Lever Limited terminated the services of 28 workmen, citing a clause in their employment contracts that allowed termination without notice or payment in lieu of notice. The workmen challenged the termination, arguing that the clause was arbitrary and violated their right to equality under Article 14 of the Indian Constitution.

The case was initially heard by the Industrial Tribunal, which upheld the termination. The workmen then appealed to the Bombay High Court, which set aside the Tribunal’s decision and held that the termination was illegal. Hindustan Lever Limited then appealed to the Supreme Court.

The Supreme Court upheld the decision of the Bombay High Court, holding that the termination was illegal and that the clause in the employment contracts was arbitrary and in violation of Article 14 of the Indian Constitution. The Court held that the right to equality included the right to equal treatment in matters of employment and that arbitrary termination of employment was a violation of that right.

The Hindustan Lever v. Workmen case is significant because it established the principle that the right to equality under Article 14 of the Indian Constitution extends to the realm of employment and that arbitrary termination of employment is unconstitutional. The case has been cited in numerous subsequent labor law cases in India.

Management of Continental Construction Ltd. v Workmen of Continental Construction, (2003)

The Management of Continental Construction Ltd. v Workmen of Continental Construction case is a landmark labor law case in India. It was decided by the Supreme Court of India in 2003.

The case involved a dispute between the management of Continental Construction Ltd. and its workmen over the payment of bonus under the Payment of Bonus Act, 1965. The management argued that the workmen were not entitled to bonus as they had not worked for the requisite number of days in the relevant accounting year. The workmen challenged this, arguing that the management had deliberately reduced their working hours in order to deny them the bonus.

The case was initially heard by the Industrial Tribunal, which held that the management had not deliberately reduced the working hours of the workmen and that they were not entitled to bonus. The workmen then appealed to the Bombay High Court, which reversed the decision of the Tribunal and held that the workmen were entitled to bonus.

The management of Continental Construction Ltd. then appealed to the Supreme Court, which upheld the decision of the Bombay High Court. The Court held that the management had deliberately reduced the working hours of the workmen in order to deny them the bonus and that the workmen were entitled to the bonus under the Payment of Bonus Act, 1965.

The Management of Continental Construction Ltd. v Workmen of Continental Construction case is significant because it establishes the principle that the management cannot deliberately reduce the working hours of the workmen in order to deny them the bonus. The case has been cited in numerous subsequent labor law cases in India.

S.K. Sheshadri v H.A.L and others, (1983)

The S.K. Sheshadri v H.A.L and others case is a significant labor law case in India. It was decided by the Supreme Court of India in 1983.

The case involved a dispute between S.K. Sheshadri, an employee of Hindustan Aeronautics Limited (HAL), and the management of HAL. Sheshadri had been promoted to the post of Assistant Personnel Officer but was subsequently transferred to a lower post of Assistant Administrative Officer. Sheshadri challenged this transfer, arguing that it was arbitrary and that it violated his right to equality under Article 14 of the Indian Constitution.

The case was initially heard by the Karnataka High Court, which held that the transfer was arbitrary and that Sheshadri was entitled to be reinstated to his previous post. The management of HAL then appealed to the Supreme Court.

The Supreme Court upheld the decision of the Karnataka High Court, holding that the transfer of Sheshadri was arbitrary and that it violated his right to equality under Article 14 of the Indian Constitution. The Court held that the power of the management to transfer employees must be exercised reasonably and in accordance with the principles of natural justice.

The S.K. Sheshadri v H.A.L and others case are significant because it establishes the principle that the power of the management to transfer employees must be exercised reasonably and in accordance with the principles of natural justice. The case has been cited in numerous subsequent labor law cases in India.

Conclusion

The Act is a regulatory regime to formally define the employment relations between the workmen/trade union and the employer. A very prominent initiative of this Act is the concept of ‘standing orders’ which is amorphous in nature being a contract promulgated statutorily, that represents the will of the parties so regulated. Finally, it may be stated that, though it lays an exemplary notion, it requires thorough reforms in respect of the present scenario of employment practiced by the principal employer so as to fulfill the Constitutional objective of securing socio-economic justice substantially.

References

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