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Standing Order

The concept of Standing Orders refers to the codified rules and regulations that define the terms and conditions of employment and the mutual duties of the employer and workmen within an industrial establishment. They aim to introduce clarity and statutory force into the otherwise vague master-servant relationship.

In India, the legal framework is primarily governed by the Industrial Employment (Standing Orders) Act, 1946 (IESO Act).

1. Definition and Objectives

A. Meaning

A Standing Order is a set of rules relating to matters specified in the Schedule of the IESO Act. It functions as a set of codified bylaws for the factory or industrial undertaking, covering all facets of the employment relationship.

B. Objectives of the IESO Act

The Act was a legislative response to the historical power imbalance where employers dictated terms unilaterally. The objectives were to confer a "status" on workmen and minimize industrial friction by:

  • Precision and Clarity: To formally define the conditions of employment with sufficient precision.

  • Knowledge: To ensure that the defined conditions are clearly known to the workmen.

  • Uniformity: To establish uniform terms across an industrial establishment, reducing disputes arising from ambiguity regarding recruitment, discharge, leave, and discipline.

  • Industrial Harmony: To promote a better and more harmonious relationship between the management and the workers.

C. Applicability

The IESO Act applies to every industrial establishment (which includes factories, mines, railways, and workshops) wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months. The appropriate government holds the power to extend the Act to establishments employing fewer workers.

2. Mandatory Contents of Standing Orders

The Schedule to the IESO Act specifies the matters that must be covered by the Standing Orders in every industrial establishment. These items cover the entire employment cycle:

  • Classification of Workmen: Defining categories such as permanent, temporary, apprentices, probationers, badlis (substitutes), and casual workers.

  • Working Hours: Hours of work, shift work, and publication of notices regarding working periods.

  • Wages and Attendance: Rules regarding attendance, late-coming, shift transfers, and pay days.

  • Leave and Holidays: Conditions governing applications for and grant of holidays and leave.

  • Termination and Discharge: The procedure for the termination of employment and the necessary notice period required from either side.

  • Suspension and Misconduct: Acts and omissions that constitute misconduct (e.g., insubordination, theft, habitual late attendance), and the procedure for imposing penalties, suspension, or dismissal.

  • Grievance Redressal: The means available to workmen for seeking redressal for any unfair treatment.

3. Certification and Legal Effect

The Standing Orders gain their legal force through a mandatory statutory procedure involving certification by an external authority.

A. The Certification Process (Sections 3, 4, 5)

  1. Submission of Draft (Section 3): The employer must submit five copies of the draft standing orders to the Certifying Officer (usually the Labour Commissioner) within six months of the Act becoming applicable to the establishment. The draft must conform, as far as practicable, to the Model Standing Orders prescribed by the Government.

  2. Consultation (Section 5): The Certifying Officer forwards the draft to the recognized trade union (or representatives of the workmen) for objections.

  3. Certification (Section 4 & 5): After giving both the employer and the workmen an opportunity to be heard, the Certifying Officer ensures that the draft:

    • Covers every mandatory matter in the Schedule.

    • Is fair and reasonable.

    • Is in conformity with the IESO Act.

      The Certifying Officer then certifies the final Standing Orders.

B. Binding Nature and Precedence

  • Statutory Status: Once certified (Section 7), the Standing Orders automatically become part of the statutory terms and conditions of service between the employer and all the workmen, superseding any prior terms in individual appointment letters that may be inconsistent.

  • Binding on All: They bind not just the employees working at the time of certification, but all those appointed thereafter (Agra Electric Supply Co. Ltd. v. Alladin, 1969).

  • Supremacy: The Standing Orders, being statutory, prevail over the general law of contract. An employer cannot justify termination by relying solely on a contract clause if that clause contradicts the certified Standing Orders.

C. Penalty for Contravention

Section 13 imposes penalties on an employer who does any act in contravention of the certified Standing Orders, including fines for the initial offense and continuing daily fines for persistent non-compliance. This statutory sanction underscores the non-negotiable nature of the certified terms.

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