The Industrial Employment (Standing Orders) Act was enacted to regulate employment conditions in industrial establishments. It provides for standing orders and Standing Order Registration that define the rules governing the relationship between employers and workers in such establishments. These standing orders cover various aspects, including the classification of workers, working hours, attendance, suspension, termination, and more. The Act aims to establish clear guidelines to maintain a harmonious and fair working environment within industrial establishments.
Significance of the Industrial Employment (Standing Orders) Act
The Industrial Employment (Standing Orders) Act is designed with specific objectives aimed at regulating various aspects within the industrial sector.
Objectives of the Act
The objectives of the Act with respect to Standing Order Registration are:
1. Establishment of Regular Standing Orders:
The primary goal of Standing Order Registration is to establish and maintain consistent standing orders for workers, factories, and their working relationships. This ensures clarity and stability in the operational framework.
2. Recognition of Employee Terms and Conditions:
The Act ensures that employees have a clear understanding of the terms and conditions of their employment which is for minimising exploitation and promoting a fair work environment.
3. Promotion of Industrial Peace and Harmony:
Another primary objective of Standing Order Registration is industrial peace and harmony by, cultivating positive relationships between employers and employees.
Scope and Applicability of the Industrial Employment (Standing Orders) Act
The Industrial Employment (Standing Orders) Act establishes specific criteria for its applicability, targeting industrial establishments with a significant workforce.
Applicability Criteria under Section 1(3):
As per Section 1(3) of the Act regulating standing order registration, it is applicable to all industrial establishments employing 100 or more workers.
Entities Covered under Section 2(i):
The Act, outlined in Section 2(i), includes the following entities:
1. Industrial Establishment as per Payment of Wages Act:
The Act is applicable to industrial establishments specified in Section 2(i) of the Payment of Wages Act.
2. Factory as per Factories Act:
It covers factories, as defined in Section 2(m) of the Factories Act.
3. Railway Industry:
The Act extends its coverage to the railway industry.
4. Contractor Establishments:
It includes establishments of contractors employing workers for contracts with industrial establishment owners, as specified in Section 2(e).
5. Workman under Industrial Disputes Act:
Section 2(i) considers a workman, defined in Section 2(s) of the Industrial Disputes Act. This includes individuals engaged in skilled, unskilled, manual, or clerical work. However, it excludes those in managerial or supervisory roles or falling under the Army Act, Navy Act, Air Force Act, police, or prison services.
Important Points for Standing Order Registration Process
The Industrial Employment (Standing Orders) Act mandates standing order registration or certification process for employers falling under it. This process involves obtaining standing order registration through specified authorities.
The process of standing order registration involves:
Mandatory Certification Requirement
Every employer covered under the Industrial Employment (Standing Orders) Act is obligated to secure standing order registration for their standing orders.
Submission of Draft Copies
To initiate the certification process, the employer must submit five draft copies of the standing orders. These drafts serve as the proposed guidelines for the conduct and terms of employment within the industrial establishment.
Role of Certifying Officer
The certifying officer plays an important role in ensuring that the standing orders comply with the provisions of the Industrial Employment (Standing Orders) Act. They review the submitted drafts to verify that they align with the legal requirements and promote fair and just employment practices.
Contents of Standing Orders
The standing orders under the Industrial Employment (Standing Orders) Act include various essential details to regulate the employment relationship within an industrial establishment. The key elements included in standing orders are:
1. Classification of Workmen:
The standing orders specify the classification of workmen into categories, such as permanent, temporary, or on probation, providing clarity on their employment status.
2. Communication of Work-related Information:
Information related to working hours, holidays, and other essential aspects is outlined to keep workmen informed about the operational aspects of their employment.
3. Shift Working:
The standing orders address the arrangements and regulations governing shift working, ensuring a systematic approach to work schedules.
4. Temporary Stoppages of Work:
Procedures for handling temporary stoppages of work are delineated to manage such situations effectively.
5. Termination of Employment:
The standing orders include provisions regarding the termination of employment, specifying notice periods and other relevant details for both employers and workers.
6. Misconduct and Consequences:
Actions or inactions considered as misconduct are defined, along with the corresponding consequences for such behaviour, promoting discipline in the workplace.
7. Grievance Redressal Mechanism:
Procedures for addressing grievances arising from unjust or unfair treatment by the employer are established, providing a mechanism for conflict resolution.
8. Attendance Marking System:
Guidelines for marking attendance are included to track and manage the attendance of workers.
9. Employment Termination Notice:
The standing orders outline the procedures for providing notice of employment termination, ensuring compliance with legal requirements.
10. Leave and Encashment Policies:
Procedures for availing leave, encashment, and accumulation of leaves are detailed to manage employee absences effectively.
11. Workmen Records and Information:
The standing orders may include provisions related to maintaining records and information about workmen, ensuring accurate documentation of employment details.
Modification of Certified Standing Orders
Once standing orders are certified by the certifying officer i.e., after standing order registration, they are generally considered unalterable, except under specific circumstances. The following conditions and procedures govern the modification of standing order registrations:
1. Limitations on Modification:
Certified standing orders remain unchanged unless there is mutual agreement between the employer and workers to the contrary. Any modification is not permissible until six months have passed from the date the standing orders or the last modification became effective.
2. Application for Modification:
If modifications are deemed necessary, the employer, workers, or a trade union representing the workmen can apply to the certifying officer for the desired changes. This application must be accompanied by five copies of the proposed modifications.
Temporary Application of Model Standing Orders
In certain situations, model standing orders temporarily apply to an industrial establishment. This occurs during the period from the time the Industrial Employment (Standing Orders) Act becomes applicable to the establishment until the standing orders of that particular establishment receive final certification.
During this interim period, the model standing orders serve as a provisional guide for regulating various aspects of employment relationships within the establishment. Once the standing orders of the specific establishment are certified, they take precedence over the model standing orders.
Process of Standing Order Registration of Certification
The certification of standing orders or standing order registration involves a structured process as given below:
Step 1: Notification and Consultation
Upon receiving draft standing orders, the certifying officer initiates the process by forwarding a copy to the trade union (if present in the industry). This notification is accompanied by a notice in Form-11. In the absence of a trade union, the certifying officer organises an election for three representatives among the workmen or authorises another officer to conduct the election. A copy of the notice in Form-II is then forwarded.
Step 2: Modification and Certification
After hearing the concerned parties, the certifying officer may make necessary modifications to the draft standing orders if required. Once satisfied, the officer certifies the standing orders. Within seven days, authenticated copies of the certified standing orders are sent to both the employer and the trade union or the specified representatives of the workmen.
Step 3: Appeal Process
If any party (employer, workmen, trade union, or specified representatives) is aggrieved by the certifying officer's decision, they have the right to submit a memorandum of appeal within thirty days from the date of receiving the certified standing orders. This appeal is submitted in quadruplicate using Form-IV.
Step 4: Adjudication by Appellate Authority
The Appellate Authority, after providing the appellant with an opportunity to be heard, proceeds to pass a final order on the appeal petition. The decision of the Appellate Authority is conclusive, marking the conclusion of the certification process and proper standing order registration as per the Act.
Payment of Subsistence Allowance during Suspension
In cases where a workman is suspended pending investigation or inquiry into complaints or charges of misconduct, the Industrial Employment (Standing Orders) Act mandates the payment of subsistence allowance by the employer. The payment rates and duration are as follows:
1. First 90 Days of Suspension:
Subsistence Allowance at 50% of the wages the workman was entitled to immediately preceding the date of suspension.
2. Day 91 to Day 180 of Suspension:
Subsistence Allowance at 75% of the wages of suspension, provided the delay in completing disciplinary proceedings is not directly attributable to the conduct of the suspended workman.
This provision ensures that workmen facing suspension are not left without any financial assistance and are entitled to a subsistence allowance to meet their basic needs during the investigation or inquiry period.
Processing Time for Standing Orders Certification
The Industrial Employment (Standing Orders) Act stipulates a specific timeline for the processing of standing orders certification:
Standing orders, once certified, and their authenticated reports are to be forwarded to employers and workers within thirty days from the date of the application submitted to the certifying officer.
Penalties for Non-Compliance with the Act
The Act imposes penalties for non-compliance in two distinct scenarios:
1. Submission of Draft Standing Orders:
- If an employer fails to submit draft standing orders or modifies existing standing orders, the concerned officer may impose a penalty exceeding Rs 5,000.
- In case of a continued offence, a fine exceeding Rs 200 per day may be imposed until the offence persists.
2. Violation of Certified Standing Orders:
- If the establishment engages in any act that violates the certified standing orders under the Act, the employer is subject to a penalty exceeding Rs 100.
- For a continued offence, a fine exceeding Rs 25 per day may be imposed until the offence is rectified.
These penalties are designed to ensure compliance with the Act and its provisions, promoting adherence to the certified standing orders and discouraging any actions that may disobey the established regulations.
Why Choose StartupFino for Standing Order Registration?
StartupFino is a company that specialises in offering complete Standing Order registration services. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements and compliances post Standing Order registration.
The structured procedure for registration of standing orders provided above ensures a fair and transparent process for the certification of standing orders, allowing for necessary modifications and providing avenues for appeals to address any grievances arising during the certification process.
