This article is written by Rachna Kumari, a student at the National University of Study and Research in Law, Ranchi. This article provides an in-depth analysis of model standing orders in industrial establishments.
It has been published by Rachit Garg.
Table of Contents
Introduction
The purpose of model standing orders (MSO) is to safeguard the fundamental rights of workers and present a guide to employers for drafting standing orders for their industrial establishment. The Industrial Employment (Standing Orders) Central Rules, 1946, and the Industrial Employment (Standing Orders) Act, 1946, contained model standing orders for industrial establishments, major ports, mines, or oil fields that are under the control of the Central Government or State Government. As law is a crucial part of every society, with the evolution of society, law needs to evolve and address new challenges. During the COVID-19 pandemic, the world witnessed a number of problems. Labourers were not untouched by the wrath of COVID. We noticed the same when workers had to travel back to their native places on foot, and the Hon’ble Supreme Court had to intervene to address the miseries of the workers. The need of the hour was to have model standing orders for addressing the changes, new concepts, such as work from home, etc., in the country.
The objective of the Ministry of Labour and Employment in drafting the standing orders was to formulate some basic rules and regulations governing the relationship between employers and employees, create industry harmony in the country, and standardise matters related to employment. Furthering the objective and operating with the power conferred by Section 29 of the Industrial Relations (IR) Code, 2020, the Ministry of Labour and Employment came up with a Draft Model Standing Order for Manufacturing Sector and Mining Sector and a Draft Model Standing Order for Service Sector.
The legislature has taken measures to maintain a certain level of uniformity regarding the common aspects in different sectors, and specific guidelines are framed to address the specific requirements of each sector. The model standing orders are made to ensure that the workers, employees, and employers know their rights and obligations regarding holidays, work timings, a notice of change in shifts, wages, paydays, etc.
Now, we shall understand the model standing orders in detail such as what are those, the need of framing the new MSO, its key features and MSO for the manufacturing, mining and service sectors, etc.
What is a model standing order
A model standing order, commonly known as an MSO, is a set of rules, regulations, and obligations that are drafted by the Central Government to regulate the conditions of employment of workers in industrial establishments. Section 15 of the Industrial Employment (Standing Orders) Act, 1946(“IR Code”), conferred the power of making standing orders on the government; it prescribed matters to be included in the Schedule, the procedure that is to be followed for modifying standing orders certified under the Act, the procedure of certifying officers and appellate authorities, and the fee that can be charged for copies of standing orders given in the register of standing orders. It also states that before making changes to standing orders, the representatives of employers and workmen shall be consulted.
Under the new IR Code, 2020, Section 29 confers the Central Government with the power to make model standing orders relating to the terms and conditions of employment of workers, like work timings, holidays, paydays, wage rates, working in shifts, leave, attendance, work from home, transfers, grievance redressal and complaints, etc.
Section 30 of the IR Code, 2020, mandates the employer to prepare draft standing orders or any other matter considered necessary by him for incorporating necessary provisions in his establishment within six months of the commencement of the IR Code, based on the MSO in reference to matters specified in the First Schedule. Before making a draft of MSO, the employer shall consult with the trade unions or recognise the negotiating union relating to the establishment and forward the draft of standing orders electronically or physically to the certifying officer for certification. When an employer adopts a MSO for his establishment, he shall forward the information regarding the same to the concerned certifying officer, and such an MSO is deemed to be certified.
Section 12A of the Industrial Employment (Standing Orders) Act, 1946, discussed the temporary application of MSO in an industrial establishment. It stated that the model standing orders shall be applicable to an establishment and shall be deemed to be adopted, on the date on which the standing orders are certified under the Industrial Employment (Standing Orders) Act, 1946. It further states that Section 13 and 13A of the Industrial Employment( Standing Orders) Act, 1946, shall apply to the MSO as they apply to the standing orders so certified.
Section 13 states the penalties and procedure laid down if an employer fails to submit a draft MSO or modifies the MSO in contravention of the Act. Section 13A stated that if any doubt arises regarding the application or interpretation of the certified standing orders, the employer, workman may refer their query to any labour court constituted under the Industrial Disputes Act, 1947.
These model standing orders apply to all industrial establishments having 300 or more workers who are working in establishments covered under the Occupational Safety, Health, and Working Conditions Code, 2020, in different states and union territories of India.
As held in the case of The Management v. Deputy Commissioner of Labour, DMS Campus, Teynampet (2019), model standing orders have the force of law like any other statutory instrument and are applicable to every industrial establishment.
For the purposes of determining what an industrial establishment is, we need to refer to Section 2(r) of the IR Code, 2020, but before that, let us understand what an industry is. According to Section 2(p) of the IR Code, an industry is any systematic activity carried on by cooperation between a worker and an employer for the production, supply, or distribution of goods or services with a view to satisfying human wants or wishes, such activities are done after investing capital and with the motive of making profits. The same has been interpreted by the Hon’ble Supreme Court in the case of Bangalore Water Supply and Sewerage Board v. R. Rajappa and Others (1978).
Section 2(1) contains some basic definitions which are referred to in the MSOs. “Aadhaar” refers to the Aadhaar card provided by the Central Government to all the citizens of India. Section 142 of the Code on Social Security, 2020 states that the collection of Aadhaar details by the Ministry of Labour and Employment is necessary for workers, and employees to avail the benefits of government schemes.
Procedure for certification of standing orders under the IR Code, 2020
After making any modifications to the MSO for his establishment, the employer must forward the same to the certifying officer. On receipt of the draft, the certifying officer shall issue a notice to the trade union or negotiating union or any representative of the workers in the establishment to seek their views regarding the modification and its relevance, within seven days of receipt.
The certifying officer shall complete the procedure for certification within sixty days from the date of receipt. If the draft standing order so received by the certifying officer is not certified within sixty days, it shall be deemed to have been certified. A group of employers can submit a joint draft of standing orders under Section 30 of the IR Code, 2020.
Key features of model standing orders
The MSO came into existence with some advanced features, considering the changing times in today’s world. However, many features were retained from the Industrial Employment (Standing Orders) Act, 1946, as well. Some of the key features of the model standing order are as follows:
Classification of workers
Firstly, the MSO classifies workers in six categories:
Permanent workers
Those workers who have been associated with an industrial establishment on a permanent basis, including those who have completed a probationary period (which is of six months) in the same or another occupation in the industrial establishment. The period of six months includes the breaks taken by a worker due to sickness, accident, leave, lockout, involuntary closure of the establishment, etc.
Temporary workers
Those workers who have been associated with the establishment for work that is temporary in nature and is anticipated to be completed within a limited period of time.
Apprentices
Those individuals who are undergoing apprenticeship training under the Apprenticeship Act, 1961, are referred to as apprentices. Apprenticeship training is a skill program wherein a person is engaged by a company as an apprentice and gains classroom (theory) learning for a short period, followed by on-the-job (practical) training.
Probationers
Those workers who are employed to fill a permanent vacancy in a post and have not completed six months of service. The period of probation can be extended to three more months after evaluating the probationer’s performance.
Badli workers
Those individuals who are employed as a replacement for a permanent worker or a probationer until they are absent.
Fixed-term employment
It applies to those workers who are employed on the basis of a written contract of employment with the employer for a fixed period of time. Such workers have the same number of working hours, wages, allowance, and other benefits, etc., as permanent workers doing the same work or work of similar nature. They are also eligible for all statutory benefits available to a permanent worker, including gratuity (if the services are rendered under a contract for one year).
Publication of work timings
The MSO mandates the display of working hours for all categories of workers on a notice board or electronic notice board and on the HR portal of the industrial establishment in Hindi, English, and the local language, which is known to and spoken by the majority of workers in the establishment.
However, in the case of the IT sector, the working hours shall be as per the agreement or conditions of appointment between the employer and the worker. Any change in the period of working hours, number of shifts, etc., is to be displayed on the notice board.
Publication of holidays, paydays, wage rates, and wage bands
Similar to the work timings, national and festival holidays, paydays, wage rates, and wage bands are to be mandatorily published on the electronic board or notice board and website or Human Resource (HR) portal of the establishment in Hindi, English, and any other local language spoken by the majority of the workers of the industrial establishment.
All payments, including wages, to the workers must be paid by crediting the worker’s bank account via electronic mode. The intimidation to the payment shall be sent through SMS, e-mail, or social media platforms like WhatsApp, etc.
Shift working
The model standing order allows a worker to work in shifts, i.e., day, afternoon, and night, in a department(s) of an industrial establishment, at the discretion of the employer. If more than one shift is worked, the worker must be transferred from one shift to another. It is to be noted that a shift cannot be discontinued without a prior notice of twenty-one days, given in writing by the employer to the workers. No such notice is to be given if the closing of a shift is bound by an agreement between workers and the employer.
In case there are any changes made to shift working, a notice of the same shall be displayed by the employer on the notice board and HR portal of the establishment. If a registered trade union exists in the establishment in question, a copy of the aforementioned notice shall be furnished to the union, either electronically or by registered post to the secretary of the union.
Work from home
Work from home, also known as remote work, is an arrangement where workers are allowed to work from their own homes. This concept gained popularity during the outbreak of COVID-19 when everyone was bound to stay at home. Another reason for its popularity is the advancement of technology, which has made it easier to communicate and collaborate via online platforms that can help a worker get work done in the comfort of his/her home. This concept comes with several advantages, such as flexibility for the workers, who can work at their own pace and according to their schedule. It saves time and, as a result, increases productivity. An employer also saves money and resources by reducing costs such as rent, utilities, etc.
Following a similar ideology, MSO also allows a worker to work from home for a period of time under conditions of appointment specified by the employer. This is a welcoming step that acknowledges the changes adopted in the legislation with the change in times.
With regards to the territorial jurisdiction of a court in case of any conflict between employer and employee when the employee is allowed to work from home merely as a concession or a convenience, the place of suing would be the place where the office is located and not the residence of the employee. The Kerala High Court has ascertained it in the case of Mangala A.G. v. Union of India (2021).
Attendance
All the workers must be at work at the time fixed by the employer, and the wages of the workers coming late will be liable to be deducted according to the provisions in the Code on Wages, 2019. Workers have to comply with the regulations related to work hours and shall register their attendance by using their own identity card or biometrics at the start of their shift and at the close of their shift. No worker is allowed to use or punch anyone else’s identity badge under any circumstances. A worker who is habitual of coming late and remains absent will be liable for deduction of wages as per the Code on Wages, 2019.
In matters relating to the discipline of employees, if a worker is considered habitually undisciplined or if he/she is found guilty of misconduct three or more times in a period of twelve months, the employer may take disciplinary action against such a worker.
Leave
A leave refers to a period of time when a worker is permitted to be absent from work. This is granted by an employer and can be paid or unpaid. A leave cannot be claimed as a matter of right and is always taken at the discretion of the employer. A worker who desires to seek leave shall apply to the employer or any other concerned officer of the establishment at least seven days in advance. The employer has to issue an order regarding the approval or rejection of leave within a week of submission or two days before the start of leave, whichever is earlier. In case of a rejection of the application for leave, the employer has to communicate the reasons for the rejection in writing to the worker. Holidays with pay are allowed as per the provisions of the OSHWC Code, 2020.
A casual leave can be granted to a worker with or without pay, not exceeding ten days in a year. Such a leave must not be for more than three days.
Record of service
A record of service must be maintained by the employer for each worker, either electronically or manually. The certificate of service, change of residential address of workers, and age of the worker shall constitute the service record. Every worker is entitled to get a service certificate issued by the employer certifying the nature, designation, and period of employment undertaken by the worker, at the time of discharge, retirement, resignation, or termination. Every worker shall disclose his exact age to the employer.
Retirement
The age of retirement can be mutually agreed upon by the employer and worker through an agreement, but in the absence of such an agreement, fifty-eight shall be deemed the age of retirement for a worker.
Transfer of workers
The MSO mandates a transfer policy in an industrial establishment, and the same has to be intimidating to all workers. The details of the same will be mentioned on the HR portal. A worker may be transferred from one department to another or from one establishment to another under the same employer. However, the worker should be transferred to a job that he is capable of doing, considering that his wages, grade, and continuity of service are not adversely affected. A notice within a reasonable time must be given to the worker.
Medical examination
As per the provisions of the OSHWC Code, all workers employed in an establishment must clear a medical examination by the medical authority nominated by the industrial establishment. A worker who comes to know that he has contracted an infectious disease shall notify the concerned manager without any delay, and such a worker shall not be allowed to work. This is a duty and right of an employee under Sections 13(d) and 14(2) of the OSHWC Code, 2020, respectively. Any worker who deliberately suppresses the fact that he is suffering from a contagious disease shall be held liable for misconduct, and disciplinary action can be taken against him.
Stoppage of work
In the event of a fire, catastrophe, disaster, pandemic, epidemic, or other cause beyond the control of the employer, the employer can terminate any provision or provisions of the industrial establishment wholly or partly for any period without notice. In such a case, the workers shall be informed by notice put on the notice board, electronic board, or HR portal.
Section 5 of the Factories Act, 1948, mentioned the power of the state government to exempt factories from the provisions of the Act in cases of “public emergency”. This term gave rise to the case of Gujarat Mazdoor Sabha v. State of Gujarat (2020), where, during COVID-19, the Gujarat Government suspended labour laws using Section 5 of the Factories Act, 1948, and exempted industrial establishments from the effect of the same. Considering the exemption, the employer increased the working hours of the workers to 12 hours per day from 9 hours per day. The petitioners contended that this was a violation of labour laws. The Hon’ble Supreme Court interpreted ‘“public emergency” and held that COVID-19 was not a public emergency, hence, the increase in working hours is not justified, and the exemption is not justified as well.
Now, under Section 128 of the OSHWC Code, we can observe that the legislature has increased the ambit of government’s power to exempt industrial establishments during a public emergency by including the terms “disaster” and “pandemic”.
In 2021, the Supreme Court took suo moto cognizance, in the case In Re Problems and Miseries of Migrant Workers v. Union of India (2021) to address the concerns of migrant workers. Here, the Hon’ble Court referred to the statement of objects and reasons of the Act and directed the government to provide adequate relief to the migrant workers and make arrangements for them to reach their homes safely.
Termination of employment
MSO discusses termination of employment and states that it shall apply to an industrial establishment employing three hundred or more workers. It shall not apply to such establishments where the work is performed intermittently or is of a seasonal character. In the case of the termination of employment of a permanent worker, a prior notice of one month has to be served on him. No such notice needs to be served on a temporary worker, probationer, badli worker, or fixed-term employment worker. In all cases, wages and other dues shall be paid.
Disciplinary action in cases of misconduct
When charges of misconduct are levied against a worker and the investigation or inquiry into complaints is pending, the worker may be suspended by the employer. The investigation shall conclude within ninety days of suspension.
Misconduct includes theft, fraud, dishonesty in connection with the property or business of the employer, taking or giving bribes, wilful disobedience, habitual late attendance without a reasonable cause, drunkenness, sleeping on duty, continuous absence from work without the permission of the employer and without sufficient cause for more than ten days, etc.
Following the judgement of Vishaka and Ors. v. State of Rajasthan and Ors. (1997), the MSO includes ‘sexual harassment’ at the workplace as misconduct. Here, ‘sexual harassment’ is to be interpreted in accordance with Section 2(n) of the Sexual Harassment of Women at Workplace( Prevention, Prohibition, and Redressal) Act, 2013.
In an inquiry, a worker is entitled to appear in person or be represented by an office bearer of the trade union of which he’s a member. The proceedings shall be recorded in Hindi, English, or the language of the state, as per the choice of the worker, and must be concluded within ninety days. In case, the worker is found guilty, the employer is well within his rights to dismiss, suspend, fine, stop his annual increment, or reduce his rank.
In awarding any punishment, the authority imposing the punishment must take the gravity of the misconduct and previous records into consideration. The detailed explanation of misconduct is done with the intention of not leaving any scope that leads to a miscarriage of justice. In the case of Delhi Transport Corporation. v. D.T.C. Mazdoor Congress (1991), the counsel submitted that the requirement of defining ‘misconduct’ in the standing orders and providing meticulous provisions for a just, fair, and reasonable inquiry into charges of ‘misconduct’ is the mandatory requirement of the Industrial Employment (Standing Orders) Act, 1946. The counsel relied on the case U.P. State Electricity Board v. Hari Shanker Jain And Ors. (1978) for his submission.
Model standing order for the services sector, 2020
The model standing order for the services sector is a standardised set of rules that determine the rights and obligations of employers and workers. These are some very basic rules that are to be followed by the employer. However, to advance the rights of workers, there are some concerns that need to be addressed by the legislature.
Firstly, we are aware of the concept of maternity leave in labour laws, but there is no provision for paternity leave. With the advancement of equal rights and equal duties of spouses in taking care of children, paternity leaves should also be introduced in statutes as well as in model standing orders.
Secondly, the COVID-19 pandemic has had a significant impact on people’s mental health. The pandemic caused fear, anxiety, and mental agony for people. Although the OSHWC Code and Model Standing Order mention the physical health of the worker, any provision regarding the mental health of the worker finds no mention anywhere in the Code. Since the mental health of workers is important for productivity and efficiency at work, the government can make it mandatory for the employer to organise seminars, and sessions educating the workers about mental well-being.
Thirdly, the Hon’ble Supreme Court acknowledged homosexuality in the case of Navtej Singh Johar v. Union of India (2018) and took a step forward to promote equality and inclusivity for the LGBTQ+ community. Gender-neutral washrooms must be set up in all industrial establishments to provide a safe space to those who do not conform to the binary gender norms, such as transgenders and non-binary people.
Fourthly, with the government’s emphasis on using digital resources, the risks attached to the same should be noted. Attempts should be made by the employer to make the workers aware of bank fraud and financial scams. Special sessions can be organised in collaboration with banks so that workers don’t fall into the trap of scammers.
Indian laws governing model standing orders
With the amalgamation of several labour legislations into codes such as the Industrial Relations Code, 2020, OSHWC, 2020, the Social Security Code, 2020, and the Code on Wages, 2019, the Industrial Employment (Standing Orders) Act, 1946, was incorporated into the Industrial Relations Code, 2020 (hereinafter referred to as the “IR Code”). The IR Code now encompasses the provisions of the Industrial Employment (Standing Orders) Act, of 1946 in Chapter IV of the IR Code. Section 29(1) of the IR Code confers the power of making model standing orders, on the Central Government. It reads as follows, “The Central Government shall make model standing orders relating to conditions of service and other matters incidental thereto or connected therewith”.
Section 28 of the IR Code states that the provisions of Chapter IV shall apply to every industrial establishment where three hundred or more than three hundred workers are/were employed on any day of the preceding twelve months.
The legislature has passed the model standing order for the manufacturing and mining sectors. For the first time, mining workers are going to be provided with railway travel facilities. When a worker takes a leave and is qualified for free railway fare, the employer has to give him the cost equivalent to his ticket, including bus and boat fare (if applicable).
Those workers who have completed a period of twelve months of continuous service qualify for railway fares. A worker shall be given money on his return from leave. This benefit is available to inter-state migrant workers.
Provisions regarding model standing orders are also present in the Industrial Relations Code and the Occupational Safety, Health, and Working Conditions Code.
Conclusion
The labour codes and model standing orders have not been implemented yet, but their implementation will be a welcome step in the field of labour laws. These orders standardise and streamline the process of providing adequate facilities, rights, and duties to workers and employers, ensuring that industrial establishments are regulated and the interests of workers are protected. Furthermore, these orders can be modified according to the needs of particular industrial establishments in different sectors. The adoption of changes like working from home, medical examinations, etc., will result in improvements in the productivity and efficiency of workers and will contribute to the economic advancement of the country. In the words of the then minister of State for Labour & Employment, Shri Santosh Kumar Gangwar, “these Model Standing Orders will pave the way for the industry harmony in the country as its aim is to formalise the service-related matters in an amicable manner”.
Frequently Asked Questions (FAQs)
Can an employer prepare a draft of standing orders for his establishment?
Yes, as per Section 30 of the IR Code, 2020, an employer shall prepare draft standing orders within six months. Those orders should be based on the model standing orders. Any order made by the employer which is in contravention of the model standing orders shall be rejected by the certifying officer.
Does the new model standing orders apply to IT companies as well?
Yes, for adopting a uniform approach across all industries under the service sector, the legislature has made it mandatory for IT companies to follow the new MSO.
References
- https://labour.gov.in/sites/default/files/224080_compressed.pdf
- https://www.mondaq.com/india/employee-benefits–compensation/1081194/model-standing-orders-under-labour-codes-accepting-the-changed-dynamics
- https://www.latestlaws.com/related-judgements/514/industrial-employment-standing-orders-act-1946
- https://vvgnli.gov.in/sites/default/files/Industrial%20Relations%20Code%2C%202020.pdf
- https://labour.gov.in/sites/default/files/OSH_Gazette.pdf
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