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Standing Orders Act: To Attain Socio-Economic Justice

The Industrial Employment (Standing Orders) Act was enacted in order to protect employers in industrial enterprises from unfair labor practices. Standing Orders are regulations that control the relationship between an employer and a worker in an industrial setting. They include topics including worker categorization, working hours, attendance, suspension, and termination.

The Act was enacted as a straightforward solution to this problem, giving uniformity to the terms of employment in industrial facilities in order to reduce industrial conflicts. We examine the different provisions of the Industrial Employment (Standing Orders) Act in depth in this article.

The Preamble of the Act mandates employers to "define with sufficient precision the conditions of employment" and make them known to the employees or the workmen.

The Act comprises certain provisions and annexures that specifies what should be the ideal scenario for the conditions of employment for the workmen or the employees.

There are certain standard conditions in those provisions and annexures provided by the Act that stipulate that the employer is expected to form his conditions of employment to be secured in his industrial establishment in accordance with the provisions of the Act.

The document prepared by the employer outlining the terms of employment must be observed by the workers or employees, and it must also be validated by the appropriate authorities.

Objectives that the Act seeks to achieve:
The objective of the Industrial Employment (Standing Orders) Act, 1946 is to minimize the industrial disputes or conflicts. It aims to make certain precise provisions regarding the terms of services and conditions of employment.

The theme is to create an environment where there are fewer disputes. There is less probability of a dispute arising if the terms of service and conditions of employment are stated and known to the workmen or the employees.

Implementation of the Act:
Section 1 of the Act provides that the Act shall apply to every industrial establishment with more than hundred employees.

However, if the appropriate government thinks it suitable that any other industrial unit makes something that is deemed a public utility, the appropriate government can declare that even if the employees are less than hundred in number, the Act will still be applicable.

What are Standing Orders?
Standing orders means rules related to items set out in the Schedule; 'Standing Orders' implies rules of conduct for workmen employed in industrial facilities, according to the Industrial Employment (Standing Orders) Act, 1946, Section 2(g).

According to Section 2(g) of the Act, "standing orders" are rules related to subjects specified in the Schedule, i.e. having reference to:
  • The classification of workmen;
  • Manner of intimation to workers about work and wage-related details;
  • Attendance, and conditions of granting leaves, etc.;
  • Rights & liabilities of the employer/ workmen in certain circumstances;
  • Conditions of 'termination of'/'suspension from' employment; and
  • Means of redressal for workmen, or any other matter.

What are Draft Standing Orders?
Draft Standing Orders are documents prepared by the employer himself, taking into account the schedule annexed to the enactment and then looking at the rules mentioned in the Schedule, observing those rules and making conditions of employment or provisions as per his Industrial establishments.

Submission of Draft Standing Orders: Section 3
Section 3 of the Act obligates the employer to prepare the Draft Standing Orders defining the terms of services and the condition of employment.
It is the liability of the employer to submit individually or jointly five copies of the Draft Standing Orders within the six months of its applicability to the industrial establishment.

Requirements for the Certification of the Standing Order : Section 4
Section 4 of the Act specifies the requirements for approval of standing orders defined by the employer himself.
To be approved, all of the requirements listed in the schedule must be met, and it must also be in accordance with the terms of the Act.

Reasonability of the Standing Order:
The certifying officer or the appellate authority does the certification of the Draft Standing Order. The certifying officer is appointed by the appropriate government.
If the employer is dissatisfied with the certifying officer's decision, the employer may appeal to the appellate authority.

The Draft Standing Orders must be in accordance with the regulations listed in the schedule as well as the requirements of the Act in order to be approved. When approving the Standing Orders Act, the authorities would examine justice and rationality.

Certification Process: Section 5
Section 5 of the Act specifies a three-step procedure for certification of Standing Orders:
A copy of the Draft Standing Orders will be delivered to the workers or the trading union, whichever is applicable, who will have 15 days to submit their objections to any terms of service or employment conditions specified in the Draft Standing Order.

Following receipt of such objections, the employer and workers will be given an opportunity to be heard, following which the Certifying Officer will make a decision and issue an order to modify the Standing Order.

Finally, the Certifying Officer shall certify such Standing Order and, as a result, submit a copy of it attached with his order for modification made under Section 5(2) within seven days.

Whether a contract can override in the Certified Standing Order?
Certified Standing Order - The Draft Standing Order when approved by the Certifying Officer is known as the Certified Standing Order.

If there is a contract between the employer and the workers, and the terms of the contract are in conflict with the Standing Orders, the contract cannot be enforced.

Certified Standing Orders isn't a Statutory Concept. It clearly draws its authority from the Standing Orders Act since the duty is imposed on the employer under Section 2(g), but it hasn't been prepared by the legislature itself. Certified Standing Orders are more than a contract but less than a law or statute. As a result, it is referred to as a Statutory Concept.
However, the contract cannot be in conflict with the Certified Standing Order, thus the CSO clearly has the upper hand over the individualised contract.

To answer the question of whether a contract can override in the CSO, the Western India case states that the employer and workmen cannot enter into a contract overriding the statutory contract as embodied in the CSO, except when such a contract is entered into in compliance with Section 10(1), so as to modify such CSO, but not otherwise.

Appeals: Section 6
The authority authorized by the appropriate government to approve, reject, or certify the Draft Standing Orders is known as a Certifying Officer. If any party is dissatisfied with the certifying officer's decision, the party may file an appeal with the appellate authority.

The aggrieved parties may appeal to the appellate authority within 30 days, and the decision of the appellate authority is final. After making the final decision, the appellate authority will give copies of the decision to the parties involved within 7 days.

Modification of Standing Order: Section 10
A Certified Standing Order cannot be changed unless the connected parties agree to do so within six months of the previous modification or operation of the standing order under Section 7. The parties may also apply to the Certifying Officer for adjustments to the standing order by annexing five copies of the proposal or a certified copy of the agreement for revisions, subject to Section 10(1) and other requirements of this Act.

Interpretation of Standing Orders : Section 13-A
Any matter pertaining to the implementation or interpretation of this Act may be brought to the Labour Courts, which will provide a final and binding ruling on all parties.

Delegation of Power: Section 14-A
The relevant Government may delegate its powers under the Act to a Central or State Government officer or subordinate authority, as the case may be, subject to the directives set forth in the notification.

The Act is a legislative framework that explicitly defines the employment relationship between the employer and the workers/trade union. The notion of "standing orders," which is amorphous in nature and is a statutorily issued contract that represents the desire of the parties regulated, is a key innovation of this Act.

Finally, while it lays forth an outstanding concept, it necessitates extensive adjustments in the current employment situation practiced by the major employer in order to substantially achieve the Constitutional goal of guaranteeing socio-economic justice.

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