Standing Orders for Small Factories: Can We Apply Them with Just 40 Employees?

Dear All,

As per the act, the standing order is applicable to companies with 100 or more employees. However, our factory has a workforce of 40. Can we still apply the standing order in my factory? Please suggest.

Thanks,
Rajesh Kumar

Dear Jaatraja,

Even if there are no certified standing orders, general guidelines are provided in the local Model Standing Orders which can be followed. Alternatively, you can create a consolidated HR process manual that covers all aspects applicable to your factory.

Thank you.

Application of the Industrial Employment (Standing Orders) Act 1946

As correctly stated, as per Section 1(3) of the Industrial Employment (Standing Orders) Act 1946, it applies to every industrial establishment with 100 or more workmen. However, the proviso extends it further, as seen below:

(3) It applies to every industrial establishment wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months. Provided that the appropriate Government may, after giving not less than two months' notice of its intention to do so, by notification in the Official Gazette, apply the provisions of this Act to any industrial establishment employing such a number of persons less than one hundred as may be specified in the notification.

So, you can approach the State Government for certification of your Standing Orders by relaxing the employee limit criteria. Incidentally, if the unit is in Madhya Pradesh, then the MP Industrial Employment (Standing Orders) Act 1961 applies, and you are eligible to get it certified. The applicable provision reads as follows:

Section 02: Application of the Act

(1) This Act shall apply to:
(a) every undertaking wherein the number of employees on any day during the twelve months preceding or on the day this Act comes into force or on any day thereafter was or is more than twenty.

As KKHR pointed out, some State Governments extended the application deadline through notification to industrial establishments employing 50 or more workers, as seen in the case of Maharashtra. Therefore, please verify the notification issued by your state.

B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai

Dear colleague,

I would suggest framing Service Rules along the lines of Model Standing Orders, instead of going through the rigmarole of making the Act applicable.

Regards,

Vinayak Nagarkar HR Consultant

Dear Friend,

The Industrial Employment Standing Orders Act makes it mandatory to apply for a factory/establishment employing 100 or more employees, but it does not prevent any establishment employing fewer than that number.

As mentioned above, you can choose to adopt the provisions of the model standing orders in the company policy manual or rules manual and adhere to them. You can also customize them to suit your requirements.

Warm Regards,

Bharat Gera
HR Consultant
9322404765