Introduction
The Industrial Employment (Standing Orders) Act, 1946, is a crucial piece of legislation in India that governs the service conditions of industrial workers. It provides a framework for maintaining discipline, ensuring fair treatment, and regulating the terms of employment in industrial establishment. The Industrial Employment (Standing Orders) Act, 1946, specifies the key requirements to be incorporated in the Standing Orders which comprises comprehensive regulations governing employment conditions, code of conduct, wages and benefits, grievance resolution, employment rights, termination of employment, suspension or dismissal for misconduct, union relations, and other provisions. These requirements ensure that the organization’s employment relations are managed fairly, transparently, and legally.
Applicability And Scope
The Act applies to industrial establishments employing 100 or more workers or were employed on any day of the preceding twelve months. Its primary purpose is to outline the conditions of employment, such as working hours, leave policies, code of conduct, and disciplinary procedures, to bring uniformity and clarity in the workplace. Under the Central Rules, Schedule 1 deals about the Model Standing Orders, which serve as a template for companies to follow while drafting their own standing orders. Schedule 2 deals with the certification of standing orders by the Certifying Officer appointed by the appropriate government where employers are required to submit their standing orders for approval and ensure that they meet legal requirements which are prescribed under Section 4 of the Act. The certification process is not necessary for internal company policies.
While the Standing Orders Act is a central law, individual states in India may have their own rules and regulations governing industrial employment. These state-specific laws can either supersede or complement the provisions of the Central Act. Companies operating in multiple states must adhere to both central and state laws.
Preview Of Misconduct Under Central Rules
The Rules, outlines various acts of misconduct and the corresponding disciplinary actions that can be taken by employers. Misconduct can range from insubordination and absenteeism to theft and violence. The Rules provides a fair and transparent process for dealing with such issues, including the right to be heard and the opportunity for an employee to defend themselves.
In addition to complying with the Standing Orders Act, companies often have their own internal policies and codes of conduct. These policies can further elaborate on matters such as workplace harassment, safety measures, and employee benefits.
Are Standing Orders Necessary When A Company Policy Is Already In Place?
Company policies and standing orders serve different purposes and different aspects of employment as mentioned below :
Company Policies | Standing Orders |
Scope: Company policies are internal guidelines and rules created by a company to regulate various aspects of the workplace. They can cover a wide range of topics, including code of conduct, ethics, harassment, social media use, dress code, attendance etc., | Scope: Standing Orders, often referred to as “Model Standing Orders” in the context of Indian labour law, are a set of standardized employment rules applicable to industrial establishments, including IT and ITES companies. These rules cover various aspects of employment, including terms of employment,disciplinary actions, termination, and grievance redressal procedures |
Customization: Companies have the flexibility to create their own policies modified to their specific needs and values. | Customization: Standing orders are certified by the government or labour authorities and are intended to ensure uniformity in employment regulations across industries and establishments |
Enforcement: Company policies are enforced by the company’s HR department and management. | Enforcement: Standing Orders are legally binding and must be followed by the employer and employees. Violations can lead to disciplinary actions or legal consequences. |
Legal Requirements: While some policies may be influenced by local laws and regulations, many are not statutorily required to be in place but are designed to ensure a harmonious work environment and protect the company’s interests. | Legal Requirements: It is a legal requirement for certain industrial establishments(to which the Act is applicable) to adopt and implement Standing Orders as per the Industrial Employment (Standing Orders) Act, 1946. |
In the case of Union of India & ORS. Vs K.Suri babu in November 2023 , the supreme court ruled that Standing Orders, which are special laws ,take precedence over other laws. Specifically, when it comes to disciplinary actions, and the service conditions which are regulated by the Standing Orders. Accordingly, if the Act is applicable to the Industrial Establishment, the certified standing orders of the Industrial Establishment would take precedance over any other policy of the Company which has any provision in contradiction of the certified standing orders.
Conclusion
The Standing Orders Act, 1946, serves as a cornerstone in regulating labour relations and employment conditions in India’s industrial establishments. Employers must adhere to its provisions, which include model standing orders, central laws, state laws, and foreign laws.
In the context of IT and ITES companies in India, they are required to adopt Model Standing Orders as per the Schedule 1 of the Industrial Employment (Standing Orders) Central Rules, 1946. These Model Standing Orders provide standardized rules and establish a legal framework for standardizing procedures across IT and ITES companies in India and the companies are expected to align their internal policies with the provisions of the Model Standing Orders to ensure compliance with labour laws.
-Sanjana N,
Advocate & Associate
