Standing orders

1. Concept and nature

“Standing orders” means orders relating to the matters set out in the First Schedule (section 2(zj)) [s.2(g)]. The First Schedule lists: classification of workers (permanent, temporary, apprentices, probationers, badlis, fixed term); notice of hours of work, holidays, pay-days and wage rates; shift working; attendance and late coming; leave and holidays; entry by gates and liability to search; closing of sections and temporary stoppages; termination and notice; suspension or dismissal for misconduct and the acts or omissions that constitute misconduct; means of redress against unfair treatment; and any other notified matter.

Certified standing orders are more than contract terms, but they are not statute either. In Rajasthan State Road Transport Corporation v. Krishna Kant, 1995 INSC 335, (1995) 5 SCC 75, the Court described them as statutorily imposed conditions of service: binding on both sides, though not “statutory provisions”. Three consequences follow:

• They override inconsistent contracts. In Western India Match Co. v. Workmen, 1973 INSC 145, AIR 1973 SC 2650, a special agreement fixing a longer probation than the certified standing orders allowed was held not to prevail over them.
• The employer can punish only for misconduct listed in them. In Glaxo Laboratories v. Presiding Officer, Labour Court, Meerut, 1983 INSC 141, (1984) 1 SCC 1, the Court held that the employer cannot go beyond the acts of misconduct enumerated in the certified standing orders to punish a worker.
• They are a special law on conditions of service in industrial establishments. In U.P. State Electricity Board v. Hari Shankar Jain, 1978 INSC 145, (1978) 4 SCC 16, the Court held that the 1946 Act continued to govern the Board’s workmen and was not displaced by the Board’s general power to make regulations.

2. Applicability

Chapter IV applies to every industrial establishment where 300 or more workers are employed, or were employed on any day in the preceding twelve months (section 28(1)). The 1946 Act applied at 100 workers [s.1(3)], so smaller establishments have dropped out. It does not apply to workers governed by the Fundamental and Supplementary Rules, the Civil Services rules, the Indian Railway Establishment Code or other notified service rules (section 28(2)) [s.13B]. The appropriate Government may exempt any establishment or class (section 39) [s.14].

3. Model standing orders and their temporary application

The Central Government makes model standing orders on conditions of service (section 29(1)) [s.15(2)(b), where the appropriate Government prescribed them]. From the date the Chapter applies to an establishment until its own standing orders are finally certified, the model standing orders are deemed adopted there (section 29(2)) [s.12A]. There is therefore no stage at which an establishment covered by the Chapter has no standing orders.

4. Preparation and certification: section 30

• Draft: the employer prepares draft standing orders, based on the model, covering every First Schedule matter, within six months of commencement (section 30(1)) [s.3(1)].
• Consultation: he consults the unions, the negotiating union or the negotiating council, then sends the draft to the certifying officer (section 30(2)), with a statement of the workers and their unions (section 30(9)) [s.3(3)]. A group of employers in similar establishments may submit a joint draft (section 30(10)) [s.3(4)].
• Adopting the model: if the employer simply adopts the Central model, it is deemed certified, subject to any amendment the certifying officer directs (section 30(3)). This is new.
• Notice and hearing: the certifying officer sends the draft to the union or negotiating body, or where there is none to elected worker representatives, invites comments, hears them, and decides whether any modification or addition is needed (section 30(5)) [s.5].
• Sixty days: he must finish within sixty days of receipt, failing which the draft is deemed certified (proviso to section 30(5)). This is also new.
• Conditions: the standing orders are certifiable only if they provide for every applicable First Schedule matter and otherwise conform to the Code (section 30(6)) [s.4].
• Fairness: the certifying officer and appellate authority must adjudicate on the fairness or reasonableness of the provisions, keeping the model in view (section 30(7)). This power was added to the 1946 Act in 1956 [s.4, last part]. In Associated Cement Co. v. P.D. Vyas, 1960 INSC 23, AIR 1960 SC 665, the Court held that after that amendment the certifying officer is no longer limited to checking conformity with the model but may modify provisions he finds unfair or unreasonable.
• Copies: within seven days of certifying, he sends authenticated copies to the employer and the union side (section 30(8)) [s.5(3)].

Certifying officers and appellate authorities have the powers of a civil court to take evidence and compel production of documents (section 31) [s.11]. Existing certified standing orders continue in force so far as consistent with the Code (section 30(11)).

5. Appeal and date of operation

The employer, a union, the negotiating union or council, or a workers’ representative body may appeal to the appellate authority within sixty days of the certifying officer’s order (section 32) [s.6, thirty days].

The standing orders come into operation thirty days after authenticated copies are sent, or, if there is an appeal, seven days after copies of the appellate order are sent (section 33(1)) [s.7].

6. Register, display and evidence

• The certifying officer keeps a register of certified standing orders, which may be electronic, and gives copies on payment (section 34) [s.8].
• The employer must maintain the text in the prescribed language and manner for the information of workers (section 33(2)) [s.9, which required posting on boards in English and the language of the majority].
• No oral evidence adding to, varying or contradicting certified standing orders is admissible in any court (section 36) [s.12].

7. Modification

Certified standing orders cannot be modified for six months from the date they, or the last modification, came into operation, except by agreement between the employer and the workers or their union (section 35(1)) [s.10(1)]. After that the employer, a worker or a union may apply to the certifying officer, and the certification procedure applies again (section 35(2), (3)) [s.10(2), (3)].

8. Interpretation, subsistence allowance and penalties

• Interpretation: any question on the application or interpretation of certified standing orders goes to the Tribunal, whose decision is final and binding (section 37) [s.13A, the Labour Court].
• Suspension: an inquiry into misconduct should ordinarily finish within ninety days of suspension. Subsistence allowance is 50 per cent of wages for the first ninety days and 75 per cent after that, if the delay is not due to the worker (section 38) [s.10A].
• Penalties: failure to submit draft standing orders, or modifying them otherwise than under section 35, carries a fine of ₹50,000 to ₹2 lakh plus ₹2,000 a day; any act in contravention of certified standing orders carries ₹1 lakh to ₹2 lakh, and on a repeat offence ₹2 lakh to ₹4 lakh or imprisonment up to three months or both (section 86(10) to (12)) [s.13].

9. Problem

An employer refuses X the benefit of the certified standing orders on the ground that X was appointed after they were certified. X challenges this. Advise. (Set in December 2013.)

Issue. Whether certified standing orders bind the employer in relation to workers who join after certification.

Law. Certified standing orders are statutorily imposed conditions of service (Krishna Kant). They govern the establishment as a whole and override contrary contract terms (Western India Match). Under section 35 they can be changed only by modification through the certifying officer, or by agreement with the workers’ side within the first six months. Acting in contravention of them is an offence under section 86(11).

Application. Nothing in Chapter IV limits standing orders to workers employed on the date of certification. They define the conditions of employment in the establishment, and every worker who joins takes employment on those terms. The employer cannot create a second class of workers by individual contract; that would be modification without following section 35.

Conclusion. X is entitled to the benefit of the certified standing orders. He may raise the matter before the Tribunal under section 37 as a question of their application, and the employer is liable to prosecution under section 86(11).

How this is examined

Asked as a short note (“Standing Orders”, December 2016; the 1946 Act, December 2012) or as the problem above. For a full answer: object and nature with Krishna Kant, applicability at 300 workers, the First Schedule, model standing orders and temporary application, certification step by step (six months, consultation, notice, sixty days, deemed certification, fairness and P.D. Vyas), appeal, thirty-day and seven-day operation, six-month bar on modification, interpretation by the Tribunal, penalties. Always give the 1946 Act section in brackets and note that the threshold moved from 100 to 300.