Standing Order in Labour Law

In India, the concept of indentured labourers has been prevalent for many years. The problem of labour or employee mistreatment has existed for a while. Employees encountered various problems, such as excessive salary reductions, failure to pay wages, and inconsistent rules regarding recruitment and termination. Employees have to deal with such mistreatment and misconduct regularly. To tackle the previously mentioned problems, the Industrial Employment (Standing Order in Labour Law) Act, of 1946 Act was enacted. The law mandates that the employer of a manufacturing facility must clearly outline the employment conditions in advance. It establishes a uniform set of rules that future contracts must follow consistently.

This Story also Contains

1. What is a Standing Order in Labour Law?
2. Historical Context
3. Nature of a Standing Order under Labour Law
4. Objectives and Scope of the Act - Standing Order in Labour Law
5. Key elements of this Act - Standing Order in Labour Law
6. The Industrial Employment (Standing Orders) Act, 1946
7. Issues that are mentioned in the schedule are:
8. Model Standing Orders in Labour Law
9. Case Laws
10. Conclusion

What is a Standing Order in Labour Law?

The Employment Directive, effective under Indian labour laws, precisely stipulates job-related matters. It spells out all forms of communication between the employee and employer. This includes termination of service, payment of wages amongst others as well as time off rules.

The standing order in Labour Law specifies the rules concerning disciplinary actions related to service conditions it is listed as a guideline for the topics mentioned in the Schedule under section 2(g) of the Industrial Employment (Standing Orders) Act, of 1946. On 29 November 2023, the highest court in India held that in the case of the Union of India versus K. Suri Babu, the standing orders prevailed over all other laws.

Historical Context

The early 20th century witnessed significant progress in industrialization in India, supported by the flooding of working-class people who frequently faced derogatory working conditions. There was an urgent demand for regulating measures to make sure that the rights of workers were being protected and that industrial relations were stabilized. The Industrial Employment (Standing Orders) Act of 1946 came into existence against this backdrop, aimed to legalize employment terms and conditions, ultimately minimising disputes and maintaining a more stable industrial environment.

Nature of a Standing Order under Labour Law

The nature of the Standing Order in Labour Law is undebatable whereby many arguments attacking and supporting this notion. It is hard to tell which category the standing order falls into. Is the standing order a contract or an award is a debate? This includes classifying standing order as being:

Statutory nature of Standing Order in Labour Law

Industrial establishment’s employees and workmen, employers, and trade unions have to follow the standing orders. Certifying standing orders take the form of making rules. This mostly extends to being regulatory.

Bagalkot Cement Co. Ltd vs R. K. Pathan & Ors’case (1962) illustratively brings out the meaning of standing orders by stipulating the terms of employment and rendering those terms explicit. These standing orders when certified, become all statutory law. This was followed in a various number of other judgments.

Contractual nature of Standing Order in Labour Law

The workmen are required to honor the standing orders of their employer as if the two sides had reached a binding agreement. Nonetheless, there have been controversies on whether these rules are implied contracts between the employer and the employees due to the nature of their contractual contents.

The Supreme Court held that “they are binding on the employer and employees as private contracts” in The Buckingham And Carnatic Co. vs Venkatiah (1963). Standing orders are part of contracts where they must be observed after they have been certified.

Objectives and Scope of the Act - Standing Order in Labour Law

• The main objective of the Industrial Employment (Standing Orders) Act is to make sure the employers in industrial spaces clearly explain the conditions of employment under them and make them familiar to the team employed by them.

• This is ensured by making it mandatory that the employers draft and follow the “standing orders” which include a wide range of employment conditions including working hours, leave policies, procedures for discipline, and termination process.

• The Act applies to every industrial establishment that employs 100 or more workers, although the government withholds the power to ensure its applicability to establishments with fewer workers. Over time, many amendments have been made to the Act to reflect changing industrial realities and employment practices.

Key elements of this Act - Standing Order in Labour Law

Submitting the draft of Standing Orders

The Act ensured that employers submit draft standing orders to the Certifying Officer within six months from the date of application. These standing orders should cover numerous elements of employment such as the classification of workmen, working hours, shift work, attendance, leave, and termination are some of the procedures for certification of standing orders in labour law.

Certification Process

The Certification Officer will certify permanent certifications that are fair and reasonable after considering all objections from employees or representatives. This type of certification helps balance the employer's interests with the rights of employees.

Model of permanent order

The government made a model of standing orders which acted as a guideline for the employers. If an employer did not submit draft standing orders before the time limit, the model standing orders will be automatically applied to their establishment

Binding nature

Once they are certified, the standing orders are legally applicable and mandatory for both employers and employees. They are considered an essential part of the employment contract and any kind of violation can lead to legal consequences.

Modifications

The act allows modification of the standing orders, but these kinds of steps must be examined through the same processes of certification. This makes sure that any change that is made is accepted and remains legally fair by both parties.

Resolving complaints

This act functions as a legal structure which is a process which resolves complaints. Clashes or disputes that are related to standing orders can be submitted to the Labour Commissioner or Industrial Tribunal, which ensures that there is a clear process to resolve conflicts.

The Industrial Employment (Standing Orders) Act, 1946

On April 23, 1946, the Industrial Employment (Standing Orders) Act, 1946, was ratified. The act's goal was to create standardised standing orders that would cover a range of topics that arise during employment.

Application of the Act

Section 1(2) of the Industrial Employment (Standing Order) Act, 1946 states that the Act is applicable across the entirety of India. Every industrial enterprise where one hundred or more workers are engaged or were employed on any day over the previous 12 months is subject to the Act's Section 1(3). Furthermore, by providing notice of its intention to apply the Act for a minimum of two months, the relevant government may apply this Act to businesses with less than one hundred workers.

The Industrial Employment (Standing Order) Act of 1946's goal

The following are the goals of the 1946 Industrial Employment (Standing Order) Act:

• It offers the set guidelines for approving standing orders made by the Act.

• Because it acknowledges the terms of employment, there is less opportunity for workers to be exploited.

• It results in fewer arguments and conflicts between the industry's management and the labour unions or employees.

• Both the employer's and the employee's rights and duties are clearly stated.

• The measure does stop trade unions and labourers from making needless demands.

• Most disagreements are resolved by conciliation or arbitration.

Issues that are mentioned in the schedule are:

Classifying workers

The industrial establishment's standing order must mention whether workers are hired on a temporary or permanent basis. Additionally, the type, for example, probation, apprentice, or badlis workers, must be specifically mentioned. The guidelines and wages for those classified as workers can be mentioned with the help of this particular specification.

Implication

The modifications in the wages, working period or hours, any type of new standards related or any regulations of pay rates how the implication should be mentioned in standing requests. For example: there are a few ways to give notice,posting a circular where employees can instantly receive notice at the general assembly point, or notice could be provided to each employee individually.

Provisions related to working shifts, attendance, and leave

The standing orders must also incorporate guidelines for the timing of entrance to the workplace and updates for leaves, as well as structures of working shifts and workers who come late. Prescribed conditions be applied to the same as well.

Privileges and responsibilities

In the case where any industrial unit or segment has been shut or is temporarily shut or halted from being used, then, at that point, in such a case the privileges and risks of the labourers and companies should be mentioned in the standing request.

Termination, suspension, or dismissal

The misconduct that ultimately results in dismissal or suspension should be mentioned in the standing order; In the standing order, the notice of the employer for these matters is mandatory to mention.

Readdressing mechanism

It is mandatory to include mechanisms for resolving wrongdoing that takes place in the workplace that are beneficial to workers in the standing orders.

Model Standing Orders in Labour Law

Model standing laws are the guidelines provided by the public authority, which might be used by employers in each industrial establishment under Labour Law standing orders for drafting standing requests for their industrial establishments. The arrangements concerning display standing requests are given in Rule 3 of the Modern Business (standing request) Focal Rules,1946

Rule 3(1) of the Modern Business (standing request) Central Rules,1946 mentions the structure of schedule which provides the Model standing Request to every one of the industrial establishments, other than the modern foundations that are linked to the coal mineshafts.

According to Rule 3(2) of the Industrial Employment (Standing Order) Central Rules, 1946, Schedule 1A of the Industrial Employment (Standing Order) Central Rules, 1946 contains Model Standing Orders for coal mine-related industrial establishments.

Order of model standing under the schedule of the guidelines

The schedule of the Industrial Employment (Standing orders) Central Rules, 1946 permits the model standing requests for industrial establishments, with the exception of modern foundations that link to the coal mineshafts.

• It highlights the following problems

• It highlights the classification of labourers.

• The procedures specify how notices about pay rates, working days, holidays, shifts, and earnings wages, shifts, working days, holidays, and wage rates are to be published.

• The provisions for leave, casual leave, wage payment, and wage stoppage are all listed in the Schedule.

• The Schedule specifies the guidelines for employment termination.

• The fines for the misconducts are listed in the Schedule; the infractions outlined in the Standing Orders.

• The employer's responsibilities in the event of a violation of the Industrial Employment (Standing Orders) Act of 1946 are outlined in the Schedule.

Case Laws

Bharatiya Kamgar Karmachari Mahasangh v. Jet Airways Ltd. (2023)

About the Case

In this case, the respondent owned and operated aviation companies. He hired 169 temporary workmen and made agreements with them. As per the model standing orders provided in the Bombay Industrial Employment (Standing Orders) Rules, 1959, an employee would become permanent after completing 240 days of work. The workmen put in 240 days of work, yet they were not given permanent status.

The choice to oppose the employer's policy was taken by the trade union. On May 2, 2002, the employer and the union came to an agreement to terminate the dispute. In return for additional perks, the employees gave up their desire for long-term employment under the terms of this agreement. The business declined to provide the workers with long-term employment because of this.

Judgment of the Court

The Supreme Court determined that the state government would be the "Appropriate Authority" in this case since the firm was not subject to federal authority. A contract that supersedes the legally required Certified Standing Order cannot be carried out, according to the Supreme Court's decision. The Supreme Court reversed the lower courts' rulings and decided in favour of the trade union.

R.P. Sawant And Ors. v. Bajaj Auto Ltd. And Anr (2001)

About the Case

In this instance, the business produced both two- and three-wheelers at its Pune plant. In the past, the corporation would recruit people on probation and gradually promote them to permanent positions. In 1981, the Akurdi Plant of the firm had around 8,000 permanent personnel.

After that, a sizable number of workers submitted complaints in various batches. The corporation terminated the employment of 301 of these workers. The employer persisted in his methods despite several complaints and the court's order to put the matter on hold. He persisted in dismissing a large number of his hires.

Judgment of the Court

Following its review of each of these instances, the Bombay High Court reached the following decision:

• The Industrial Court has the right to hold the employer accountable for its unfair business practices. The court lacked the authority to provide the fired employees with any sort of compensation.

• The workers' request was accepted while the employer's was denied.

• The employer was also mandated to follow the Industrial Court's instructions and pay Rupees 50,000 in expenses within three months of the decision.

Conclusion

The labour market is one of the sectors in India that is most exploited. Employees endure days without access to food or employment due to the wrongdoings of their employer. Employees are protected from the wrongdoings of their employers by the proper procedure of the standing order. The right of workers to labour freely and with dignity is strengthened by this labour legislation. This Act holds the employer responsible and puts pressure on them to follow the laws. But maintaining its tight application is equally necessary to protect workers' rights.