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Applicability and process to obtain Standing Order under the Industrial Employment (Standing Order) Act, 1946

Posted by: ericmikio on 22 April 2019 in Compliance, HR, Human Capital Management, Payroll, Talent Management, Time and Attendance

(Volume – 36 of Coffee Break Compliance Guide from Anandan Subramaniam) Is it applicable to your establishment?

What is the objective of the Standing Order?

There was no uniformity in the conditions of service of workers until this act was brought, which led to friction between workers and Management. An Industrial worker has the right to know the Terms & condition which he is expected to follow. Hence the legislation.

The Industrial Employment (Standing Orders) Act, 1946, which, inter alia, requires the employer to define and publish uniform conditions of employment. This is more than the HR Policy / code of conduct / handbook, of an organization. It is basically a terms on employment – Entry & Exit to the premises, Hours of work, Rates of wages, Shift schedules, Leave and Attendance, Misconduct provisions, process of termination or separation, etc.

Provisions of Standing Order regulates the conditions of employment, grievances, misconduct etc. of the workers employed in industrial undertakings. Unsolved grievances may become industrial disputes.

If the classification of employees – Temporary, Casual, Permanent, Badli, Probationary etc, can be mentioned in the draft with conditions, then it will not cause any challenges to the establishment while appointing such types of employees.

The conditions of employment, which will be binding on the employer and the workmen from the date when they become operational.

Which is an Industrial establishment?
“Industrial establishment” means— an industrial establishment as defined in clause (ii) of section 2 of the Payment of Wages Act, 1936

Though the Act specifies the applicability as 100 employees (On-roll only), various States of India specifies different head count for coverage of the provisions of the Act. Find below the applicability for few specific State.

Tamilnadu (20) Karnataka (50) Maharashtra (50) Madhya Pradesh (20) Gujarat (50)
Haryana (50) Kerala (50) Andhra Pradesh (50) West Bengal (100) Telengana (50)
Delhi (50) Punjab (100) Chandigarh (100) Himachal Pradesh (100) Uttarpradesh (100)

Process of obtaining a Certification
An employer is required to submit to the Certifying Officer (usually Regional Labour Commissioner or Joint Labour Commissioner) appropriate number copies (as specified by the respective State) of the draft of standing orders proposed by them for adoption in the industrial establishment. Employer will make all such provisions in accordance to Model Standing Order, in such draft for every matter set out and such provision would be applicable to the industrial establishment. Draft standing order needs to be submitted with appropriate list of workmen employed in the industrial establishment. Details of Trade Union members, if applicable, or list of Representative employees’ otherwise, needs to be submitted along with the draft standing orders for Certification.

The Authority, through their representative officer, after hearing the objections if any to the standing orders, the certifying officer decides whether or not any modification to the standing order is necessary and thereafter certify, the standing order. Modification may not be necessary if it is employee favourable. The Certifying Authority will sign and seal the submitted Draft, as part of Certification and share it to the Employer.

A Certified standing order will not be considered for amendment, except on agreement between the employer and the workmen or a trade union/employee representatives, until the expiry of six months from the date on which the standing orders were certified or the last modifications thereof came in to operation.

The text of the standing orders finally certified shall be prominently pasted by the employer in English and in language understood by the majority of the workmen on special board to be maintained for that purpose at or near the entrance through which the majority of workmen enter the industrial establishment.

Many of IT and ITES establishments do not obtain the Certification, as they feel that the definition does not distinctly spells that they are covered under, to comply.

Besides, in the State of Karnataka, the government has so far gave exemption to such IT and ITES industry establishment until January 2019.

Recently, State of Haryana has amended the Punjab Shop and Establishment Act effecting all Establishments in the State of Haryana covering under Standing Order Act, which mandates them to apply for Certification.

Hence, it implicit that ALL Establishments in Karnataka and Haryana are mandated to obtain Certification. And the Establishments in other States too may get the certification and not to take any chance, for reasons stating there is no clarity in the definition of Industrial Establishment.

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TAGS: Applications Compliance Guide Employment Legislation Human Resources Industrial Employment Payroll Salary and Wages

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