Can Factories Legally Separate Policies for Workmen and Executives? Seeking HR Insights

Dear All, I have a query for which I am requesting all seniors and other HR friends to give their opinion on it. Actually, in one of my friend's company (Factory), he mentioned that the code of conduct deals with executives, and standing orders deal with workmen.

Understanding Workmen and Executives

In standing orders, a workman is defined as Permanent, Probationer, Temporary, Substitute, Apprentice, and Casual. The code of conduct defines an employee as an executive only.

Policy Creation for Employees

For defining an employee and governing rules and regulations of employment in a factory, can we create two policies: one being Standing Orders (Workman, which is statutory) and the other being Code of Conduct (Executives only)? Is this valid as per the law? According to standing orders, for executives or other categories (other than workmen), can we create a policy like a code of conduct by excluding them in standing orders?

Please share your opinion.

Regards, Rajesh

Generally, in big corporations, the concept of a code of conduct is prevalent. Statutorily, it has no legal sanction. However, in the case of Standing Orders, it is a minimum requirement set by the Appropriate Government. The code of conduct primarily deals with behavior towards third parties in relation to the organization. In cases where some employees do not fall within the category of workmen, the code of conduct can still be applicable.

Understanding Standing Orders and Code of Conduct

Standing orders are statutes that regulate the conditions of employment for lower-ranking employees. You are not required to have standing orders certified; model standing orders will be applicable to your company if your company engages manpower specified in the act. If you feel the need to change them, then only make changes and obtain approval from the labor office. Since the definition of a workman is as per the ID Act, the act does not apply to employees above supervisors who mainly perform managerial work. Therefore, merely having the designation of a manager will not grant the person the status of a manager unless he or she has the authority vested by the organization. Pursuing legal action for reported 'misconduct' can be a somewhat tedious process.

Handling Breaches of Conduct for Managers

For real managers, breaches of conduct can be taken seriously to the extent of termination of employment, but this must be a term of employment. It is valid if it is agreed upon as an appointment clause. Such an employee will not have a remedy under the ID Act; hence, any separation, if it occurs, can be smoother.

Understanding Standing Orders and Code of Conduct

While Standing Orders describe the statutory terms and conditions of employment, the Code of Conduct or Conduct, Discipline & Appeal Rules (CDA Rules, as it is called in most major enterprises) do not have any statutory force. Standing Orders are certified by the labor authorities to be legal and proper. The Code of Conduct or CDA Rules bear approval as per Delegation of Powers.

Standing Orders flow from the Industrial Employment (Standing Orders) Act, 1946. Section 1(3) applies it to every industrial establishment wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months. It applies only to the 'Workmen' covered by it. So anyone not answering the description of being workmen under the act is not covered by it. An establishment can have its own certified Standing Orders, or else the Model Standing Order provided in the Act would apply. It is for such exempted employees under the Standing Orders that the Code of Conduct or CDA Rules apply. You cannot exclude anyone from Standing Orders as it is statutorily defined; indeed, it is only those who are excluded from the Standing Orders that are covered under the Code of Conduct/CDA Rules.

Dear Rajesh,

You have asked for the difference between the code of conduct and standing orders. You have identified shortcomings of both. Later, three members have shared their views on the importance of having standing orders and their legitimacy. Nevertheless, the comparison between the two has forced a narrow view of the code of conduct. The code of conduct is defined as "a set of conventional principles and expectations that are considered binding on any person who is a member of a particular group."

There are many conventions, principles, or expectations that need not fall within the purview of the law. This is where the code of conduct comes into the picture. In many companies, they have both standing orders and a code of conduct included in the employee handbook. One need not be a substitute for another.

Parameters of workplace behavior

Parameters of workplace behavior need to be well defined. A major component of behavior is communication. Therefore, the code of conduct can have rules of communication, protocols of communication, and so on. Rules of communication can include how to control temper, how to foster an interpersonal environment in the company, how to conduct meetings, how to give feedback, how to receive feedback, how to criticize, and how to accept criticism, etc.

Dealing with outsiders

Secondly, how to deal with outsiders is also important. Therefore, rules of behavior on how staff members should behave with consultants, advisers, suppliers, and service providers are also important. How to conduct a job interview is also important.

Foundation and further structure

Standing orders lay the foundation. However, a company cannot remain content by just laying a foundation. Further structure has to be built by devising a code of conduct. "Most of the laws are bland or tasteless, and their implementation demands crudeness. In contrast, the code of conduct attempts to bring pleasantness to the workplace. Each staff member must get a pleasant experience while working, and mere adherence to the standing orders is certainly not sufficient to make a workplace a refined one."

Thanks,

Dinesh Divekar

Code of Conduct and Its Importance

The Code of Conduct (or Code of Ethics & Discipline) is a set of infractions and penalties promulgated by business organizations as a reference for the dispensation of penalties for employees found to have violated its policies and internal rules.

The Code is generally attached to the Employee Handbook and is used to ensure the consistency of penalties given to employees for every infraction committed. The penalties enunciated in the code are presumed to be consistent with the labor law and other laws of the country where the company operates.

The Code is important because when an illegal dismissal complaint is filed against the company, the labor department would ask the company for the basis of its action. In the Philippines, when an employee commits an act that is defined by the Code as a terminable offense, the employee can be legally dismissed after he/she is found guilty of the offense. Finding an employee guilty mandates employers to use the "due process of law" procedures stated by the Philippine Labor Code—i.e., twin notice and hearing.

Best regards.

Hello,

Every organization has to define conditions of employment, a legal provision for the workman category which we call model/certified standing order. However, Code of Conduct (COC) or relevant policy is for the non-workman category.

If the COC has been consented to and acknowledged by an employee, then the provisions are applicable to him and will provide support if challenged in courts of inquiry or otherwise.

Regards,
Gajendra Verma

Code of Conduct vs. Standing Orders

A code of conduct is a set of rules outlining the social norms, religious rules, and responsibilities of an individual, party, or organization. Related concepts include ethical, honor, moral codes, and religious laws. It solely depends on the consent of the individual or the organization; it is not necessary that it should be enforced by law.

Understanding Standing Orders

On the other hand, a Standing Order is the rule of order that governs establishments under the laid-down procedures of the government. It should be enforced by the law of the land.

Dear Members,

Codes of Conduct are developed by the organization on their own, whereas Standing Orders have statutory force and are not purely meant for workers; office-level staff are exempted. The Standing Orders and the clauses made thereunder cover all categories of employees employed in the organization. When there is a conflict between the Code of Conduct and the Standing Order, the latter will prevail and hold good.