Standing Orders: What They Are and Who Must Have Them

And the same introduction records where the idea came from, which connects this chapter to Module I: discussion at the tripartite Indian Labour Conference revealed a consensus in favour of standing orders in all industrial establishments employing one hundred or more workers. The ILO's method produced an Indian statute, as [The ILO's Influence on Indian Labour Legislation] describes.

Some words this chapter uses

Standing orders, section 2(zj), are orders relating to the matters set out in the First Schedule. That is the whole of the definition, and it is a pointer: to know what standing orders are you must read the Schedule.

Model standing orders are the standing orders the Central Government makes under section 29(1). They serve two purposes: they are the base an employer drafts from, and they are the interim law until his own are certified.

Certifying officer is the officer who examines the draft and certifies it. His powers are in sections 30 and 31.

Badli is a substitute worker, engaged in place of a permanent worker who is absent. The word appears in item 1 of the First Schedule.

Probationer is a worker taken on for a trial period before being confirmed.

Deemed to be adopted means treated by the statute as adopted, whether or not the employer has done anything.

Section 28: to whom the Chapter applies

Section 28(1): the provisions of Chapter IV apply to every industrial establishment wherein three hundred or more than three hundred workers are employed, or were employed on any day of the preceding twelve months.

Three things in that sentence are examinable.

The threshold is three hundred. The repealed Industrial Employment (Standing Orders) Act 1946 applied at one hundred, and its own introduction records that the hundred figure came out of the tripartite Indian Labour Conference. Parliament has tripled it. A student who writes one hundred is answering a repealed Act.

The count is of workers, as defined in section 2(zr). So the people excluded from that definition, those employed mainly in a managerial or administrative capacity and supervisors above the wage ceiling, do not count towards the three hundred.

The look-back is twelve months, and it is generous to the worker. The Chapter applies if three hundred were employed on any day of the preceding twelve months. An establishment that runs a seasonal peak of three hundred and drops to two hundred for the rest of the year is inside the Chapter.

Section 28(2) disapplies the Chapter, notwithstanding sub-section (1), so far as the workers employed are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Service Regulations, the Civilians in Defence Service (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code, or any other rules or regulations notified by the appropriate Government, apply.

The logic of that exclusion is simple and worth stating. Those people already have written, published conditions of service with a disciplinary procedure and an appeal. Chapter IV exists to supply exactly that where it is missing, so it stands aside where it is already there.

Section 39: and the appropriate Government may exempt

The appropriate Government may, by notification, exempt conditionally or unconditionally any industrial establishment or class of industrial establishments from all or any of the provisions of the Chapter.

Read this beside section 28 rather than separately. Section 28 fixes the class the Chapter catches; section 39 lets the Government let particular establishments out again. The exemption may be partial, "all or any of the provisions", and it may carry conditions.

The First Schedule: what standing orders must cover

Section 2(zj) defines standing orders by reference to this Schedule, and section 30(6)(a) makes provision for every applicable Schedule matter a condition of certification. The eleven items are:

• 1. Classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed term employment.
• 2. Manner of intimating to workers periods and hours of work, holidays, pay-days and wage rates.
• 3. Shift working.
• 4. Attendance and late coming.
• 5. Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
• 6. Requirement to enter premises by certain gates, and liability to search.
• 7. Closing and reporting of sections of the industrial establishment, temporary stoppages of work, and the rights and liabilities of the employer and workers arising from them.
• 8. Termination of employment, and the notice to be given by employer and workers.
• 9. Suspension or dismissal for misconduct, and the acts or omissions which constitute misconduct.
• 10. Means of redress for workers against unfair treatment or wrongful exactions by the employer or his agents or servants.
• 11. Any other matter specified by the appropriate Government by notification.

Read the list as three groups and it becomes memorable.

Items 1 to 5 tell a worker where he stands. What category he belongs to, how he learns his hours and pay, how shifts work, what counts as attendance, and how he gets leave.

Items 6 to 9 are the employer's powers. He may require entry by particular gates and may search; he may close sections and stop work temporarily; he may terminate on notice; and he may suspend or dismiss for misconduct.

Item 10 is the balance. Whatever powers items 6 to 9 give the employer, item 9 obliges him to define misconduct in advance, and item 10 obliges him to provide the worker with a means of redress against unfair treatment or wrongful exactions.

Item 1 is worth a separate note because it now names fixed term employment among the classifications, which the 1946 Schedule did not. Fixed term employment is defined in section 2(o) with its own three protections, worked in ['Workman' Under the Code: Worker, Employee and Employer].

And item 9 is the one that decides real cases. An employer cannot dismiss for misconduct unless the acts or omissions constituting misconduct are set out in his certified standing orders. Writing them down in advance is the protection.

Section 29: the model standing orders

Section 29(1): the Central Government shall make model standing orders relating to conditions of service and other matters incidental thereto or connected therewith. The obligation is mandatory.

Section 29(2) is the provision that makes the scheme work, and it is easy to underrate. Notwithstanding sections 30 to 36, for the period commencing on the date on which the section becomes applicable to an industrial establishment and ending with the date on which standing orders as finally certified come into operation under section 33, the model standing orders shall be deemed to be adopted in that establishment; and section 33(2) and section 35 apply to those model standing orders as they apply to certified ones.

Three consequences follow.

An establishment is never without standing orders. From the first day the Chapter applies, the model orders are in force by operation of law, whatever the employer has or has not done.

The employer cannot gain by delay. Under a scheme without section 29(2), an employer who never submitted a draft would have no standing orders and so no defined misconduct and no defined procedure, which might suit him. Here he simply has the Government's model orders instead of his own.

The interim orders are real orders. Section 33(2), which requires the text to be maintained for the information of the workers, and section 35, which governs modification, both apply to them.

A worked example

The facts. A packaging plant in Wada. Its workforce is 260 for most of the year, but for two months of the season it takes on extra hands and reaches 315 workers. It employs, in addition, four managers and three supervisors paid above the section 2(zr) ceiling. It has never had standing orders.

Does Chapter IV apply? Yes. Section 28(1) applies the Chapter where three hundred or more workers were employed on any day of the preceding twelve months, and 315 were employed during the season. The managers and the high-paid supervisors are not counted, because they are not workers under section 2(zr), but the count reached 315 without them.

From what date does the plant have standing orders? From the date the Chapter became applicable to it. Section 29(2) deems the Central Government's model standing orders to be adopted from that date until certified orders come into operation under section 33. The employer's inaction is irrelevant.

A worker, Meera, is dismissed for leaving her post without permission, and the employer says this was misconduct. Ask first what the applicable standing orders say. Until certification, they are the model standing orders. Item 9 of the First Schedule requires the acts or omissions which constitute misconduct to be specified, so the question is whether leaving a post without permission is among the specified acts. If it is not, the dismissal is not a dismissal for a defined misconduct.

Meera says the standing orders themselves are unfair. That objection has a home: section 30(7) makes it the function of the certifying officer or the appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders, keeping in view the model standing orders. That is the subject of the next chapter.

The plant's owner asks whether he can simply be left out. Only the appropriate Government can do that, by notification under section 39, conditionally or unconditionally, from all or any of the provisions of the Chapter.

Now change the facts: the plant's workers are railway employees to whom the Indian Railway Establishment Code applies. Then section 28(2) disapplies the Chapter notwithstanding the numbers, because those workers already have published conditions of service.

What this does NOT mean

It does not mean the threshold is one hundred. It is three hundred under section 28(1). One hundred was the figure in the repealed Act of 1946.

It does not mean an establishment below the threshold has no rules. It means Chapter IV does not apply to it. Its terms of employment are governed by the contract and by the rest of the Code.

It does not mean the employer writes whatever he likes. He drafts from the model standing orders, must cover every applicable First Schedule matter, and the certifying officer adjudicates on fairness and reasonableness.

It does not mean the model standing orders are only a template. Section 29(2) makes them the operative standing orders until certified ones come into operation.

It does not mean managers count towards three hundred. The section counts workers, and section 2(zr) excludes those employed mainly in a managerial or administrative capacity and supervisors above the wage ceiling.

It does not mean the count is taken today. It is satisfied if the number was reached on any day of the preceding twelve months.

Limits, criticism and amendments

Raising the threshold from one hundred to three hundred is the largest change in this Chapter and the most criticised. An establishment of two hundred and fifty workers is a substantial workplace, and it is now outside a requirement it had been inside since 1946. The employer's answer is that certification is a burden disproportionate to a medium-sized unit. The worker's answer is the one the 1946 Act's own introduction gave: the mischief is employers who will not define conditions of service, and that mischief does not begin at three hundred.

The same threshold appears in Chapter X, which governs lay-off, retrenchment and closure in larger establishments, and was raised there too. The two changes together are the central complaint made about the Code by trade unions.

The exemption power in section 39 is wide. It permits exemption from all or any of the provisions, conditionally or unconditionally, by notification, with no criteria stated in the section.

And the First Schedule can be enlarged by notification, item 11, so the content of standing orders is not fixed by Parliament alone. Section 101 separately gives a power to amend the Schedules.

Quick revision

• Section 2(zj): standing orders are orders relating to the matters set out in the First Schedule.
• Section 28(1): Chapter IV applies to every industrial establishment with three hundred or more workers employed, or employed on any day of the preceding twelve months. Not one hundred; that was the repealed 1946 Act.
• Section 28(2): does not apply where the civil service rules, the Civilians in Defence Service Rules, the Indian Railway Establishment Code or other notified rules apply.
• Section 39: the appropriate Government may exempt any establishment or class, conditionally or unconditionally, from all or any provisions.
• Section 29(1): the Central Government shall make model standing orders. 29(2): they are deemed adopted from the day the section applies until certified orders come into operation under section 33, and sections 33(2) and 35 apply to them.
• First Schedule, eleven items: classification of workers including fixed term employment; intimation of hours, holidays, pay-days and wage rates; shift working; attendance and late coming; leave, its conditions, procedure and granting authority; entry by certain gates and liability to search; closing and reporting of sections and temporary stoppages; termination and notice; suspension or dismissal for misconduct, and what constitutes misconduct; means of redress against unfair treatment or wrongful exactions; and any other matter notified.

Test yourself

1. What are standing orders, and to which establishments does Chapter IV apply? Section 2(zj) defines standing orders as orders relating to the matters set out in the First Schedule to the Code. Section 28(1) applies Chapter IV to every industrial establishment wherein three hundred or more workers are employed, or were employed on any day of the preceding twelve months. Section 28(2) disapplies it, notwithstanding that, so far as the workers are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Service Regulations, the Civilians in Defence Service (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code or other notified rules apply.

2. State the matters to be provided for in standing orders. The eleven items of the First Schedule: classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed term employment; the manner of intimating to workers the periods and hours of work, holidays, pay-days and wage rates; shift working; attendance and late coming; the conditions of, procedure in applying for, and the authority which may grant, leave and holidays; the requirement to enter premises by certain gates and liability to search; the closing and reporting of sections of the establishment, temporary stoppages of work and the rights and liabilities arising from them; termination of employment and the notice to be given by employer and workers; suspension or dismissal for misconduct and the acts or omissions which constitute misconduct; means of redress for workers against unfair treatment or wrongful exactions by the employer or his agents or servants; and any other matter specified by the appropriate Government by notification.

3. What is the effect of the model standing orders before an employer's own are certified? Section 29(2) provides that, notwithstanding sections 30 to 36, from the date on which the section becomes applicable to an industrial establishment until the date on which the standing orders as finally certified come into operation under section 33, the model standing orders made by the Central Government under section 29(1) shall be deemed to be adopted in that establishment, and sections 33(2) and 35 apply to them as they apply to certified orders. So the establishment is never without standing orders, and an employer gains nothing by delaying his draft.

4. A factory employs 250 workers all year but employed 310 for three weeks last summer. Does Chapter IV apply? Yes. Section 28(1) is satisfied where three hundred or more workers were employed on any day of the preceding twelve months, and 310 were employed during those three weeks. The obligation does not depend on the number employed today.

5. Why does the Code require misconduct to be defined in advance? Because item 9 of the First Schedule requires standing orders to provide for suspension or dismissal for misconduct and the acts or omissions which constitute misconduct, and section 30(6)(a) makes provision for every applicable Schedule matter a condition of certification. The purpose is the one the repealed Act's introduction gave: the mischief was employers who would not define conditions of service, leaving the worker unable to know in advance what would cost him his job and unable to complain of unfairness because there was no standard to measure against. Item 10 completes the balance by requiring a means of redress against unfair treatment or wrongful exactions.

6. Comment on the change of threshold from one hundred to three hundred. The Industrial Employment (Standing Orders) Act 1946 applied at one hundred workers, a figure its own introduction records as having come from a consensus at the tripartite Indian Labour Conference. Section 28(1) of the Code sets the figure at three hundred, so establishments between the two numbers, which are substantial workplaces, are now outside a requirement they had been inside since 1946. The argument for the change is that certification is a disproportionate burden on a medium-sized unit; the argument against is that the mischief the Chapter addresses, employers who will not define conditions of service, does not begin at three hundred. The same threshold was raised in Chapter X for lay-off, retrenchment and closure, and the two changes together are the principal criticism trade unions make of the Code.