Navigating Standing Orders Without a Trade Union: Who Represents and What's the Process?

I have recently joined an organization that has a presence in Bangalore and Hyderabad. I need to prepare standing orders for both locations. Could you please help me with the following two queries:
1. We do not have a trade union, so who represents a trade union, and is there any process we need to follow?
2. What is the validity of a standing order?

Thank you.

We currently have 20 permanent employees in Hyderabad and nearly 50 in Bangalore. I understand that it is mandatory to have standing orders if the number of employees is 100 or more. We are soon expected to reach a headcount of 100, hence the requirement for standing orders. Please advise.

As Hyderabad and Bangalore are two different locations, are you processing payroll from only one location? If you do not have a union, then why don't you follow the model Standing Orders?

Ensure there is a single line break between paragraphs.

Ok, great. This is helpful. We will be processing payroll from one location. Pardon my ignorance as I am a novice in drafting and understanding standing orders. Do you mean to say that if there is no trade union, we can proceed with having a model standing order? If so, is the model standing order exempt from certification from the Labor Office? Please suggest.

Dear Ms. Manisha, I infer from your post that the Industrial Employment (Standing Orders) Act, 1946, in all respects applies to your organization, which comprises two inter-related units and has prompted you to raise these queries.

Answering Your Second Query First

For the sake of orderly convenience, let me answer your second query first. The object of the Act is to require employers to make the conditions of employment under them precise and definite and make them known to their employees. The Act prescribes these conditions in the form of Standing Orders. Not only the object but the scheme of the Act is such that employers must define precisely the conditions of employment for all employees and have the same certified by the Certifying Officer appointed under the Act. The right of representation given to the trade unions or elected representatives of the workmen enables employees' participation in the process of certification and amendment of the standing orders. Thus, certified Standing Orders have statutory force.

Absence of a Trade Union

In the absence of any trade union in the industrial establishment, the Certifying Officer has to call for a meeting of employees in the establishment to elect their representatives to take part in the certification process. It is advisable to refer to the Central Rules.

Application for Certification

The application for certification should be submitted within 6 months from the date the Act became applicable to your establishment. Until it is certified, the model Standing Orders would be temporarily applicable. However, since the model standing orders are applicable, you cannot be content with that. The failure to get the Standing Orders duly certified is a punishable offense under the Act.

Thank you very much, Mr. Umakanthan, for your guidance on this matter. This is very helpful, and I have a lot more clarity now. One last thing, please: could you let me know what the validity of a standing order is? Is there any frequency of modification to be followed? Could you please help me with this process?

Dear Mr. Umakanthan,

I referred to the Standing Order Rules as suggested and got an answer to my query. After the expiry of 6 months of the final standing orders certified by the Certifying Officer, the employer and the workmen representative can submit 5 copies of revised standing orders in case of any modification and did not find any specific expiry date of standing orders. Thank you very much for guiding me on this.

Dear Manisha, I would like to add some practical suggestions with due respect to the views expressed by the learned colleague Mr. Umakanthan.

In the context of your two establishments, one in Bangalore and another in Hyderabad, both are not yet covered under the Industrial Employment Standing Orders Act because their workmen strength (as defined under the ID Act), excluding supervisory, executive, and managerial staff, is far less than 100. Even when it reaches or crosses 100, you don't have to worry about going for certification and hoping to have Certified Standing Orders.

You can very well follow the Model Standing Orders in spirit and as a guide. Although the certification process/procedure is provided for in the Act, my experience shows employers continue to follow MSOs for years, and authorities have done nothing about requiring them to go for certification. In my view, the MSOs are adequate enough to facilitate the day-to-day working of the establishment in terms of essential rules of discipline, disciplinary actions, and other basic terms of employment.

If one thinks of it, what significant thing can you add while thinking of going for certification? Really speaking, not much except to propose the addition of some new classification of workmen (fixed-term contract employees), some misconducts, and punishments like stoppage of increment, demotion, etc. But the very process of certification will not allow it to succeed with the suggested amendments without creating hurdles from the workmen representatives or Union opposing/objecting to it. Therefore, why cause ripples in quiet water?

So, legal requirement of certification notwithstanding, not going for it and following MSO as a guiding principle when your strength is less than 100 workmen, as well as when it crosses, will immensely benefit you. In my view, you should follow them—MSOs without any hesitation.

Regards, Vinayak Nagarkar HR Consultant

Thank you for your input, Mr. Vinayak. I am curious to know if there is a legal mandate for getting the Standing Orders certified. I understand from Mr. Umakanthan's input that wherever the Standing Order is applicable, failure to get the same certified is a punishable offense under the Act. Please help.

If you go through the provisions of the Act, it is crystal clear that it is mandatory to get certified standing orders in terms of the process and procedure as laid down in the Act and State/central Rules as per its applicability. Failure to get it certified is a punishable offense. But, as I pointed out earlier, if you follow the MSOs, it is adequate.

I have not come across any prosecution against any organization yet by the authorities for non-certification, and perhaps Mr. Umakanthan, who has served in that authority, can shed more light on this aspect.

Regards, Vinayak Nagarkar HR Consultant.

In case, if you are not proceeding towards enacting MSO/SO or unionized set up, alternative arrangements may be made to set up a mechanism in the form of a 'Grievance Cell' comprising the employer's and employees' representatives, and an Appellate Committee to deal with grievances raised and complaints received. This type of setup team is functional in government and quasi-government institutions.

Dear All, in continuation of my query in this post, I need your advice/suggestions on the following points, please:

1. How does a Certifying Officer decide on the number of employees he would like to meet to elect the three workmen representatives?

2. Can the management suggest to the Certifying Officer about the employees who can be part of this meeting?

3. If, for some reason, the workmen representatives resign from the organization or want to discontinue being a representative, then who is obliged to inform the Certifying Officer, and what is generally the next step in this situation?

4. Can the HR/Employee Relations team, who are involved in drafting the standing orders, be part of the meeting for electing the workmen representative?

I request your advice, please.

Warm Regards,
Manisha

Clarification on Compliance and Standing Orders

Certain humble words of clarification, as suggested by our friend Mr. Vinayak Nagarkar in his post dated 29-10-2018.

In the first place, the history of no penal action against the violation/non-compliance of any explicit provision of a law so far may be indicative of the laxity of enforcement but cannot be construed as an implied sanction or precedent for continued non-compliance forever. Had the Legislature thought that the permanent adoption of the MSO is sufficient compliance, there would have been no necessity for the introduction of exclusive provisions for certification and amendment, nor to have captioned Sec. 12-A of the Act as "Temporary application of model Standing orders." Similarly, it is not at all warranted to provide for penal provisions, including enhanced punishment for a continuing offense. MSOs are simply guidelines to be followed while drafting and certifying Standing Orders befitting the peculiar nature of the activities of the industrial establishment concerned. Even an employer who has already got a CSO cannot simply implement the provisions of the subsequent amendment in the MSO without amending his existing CSO.

The practical difficulties highlighted in the process of certification would pale into insignificance if the proposed conditions of service are fair and legal in all respects. I am of the firm view that if an employer treats a trade union as a parallel institution of fostering amity between the Capital and Labor, he need not be scared of its lawful differences in matters of employment, including the certification or amendment of standing orders. For her latest queries, Manisha may refer to rule 6 of the IE(SO) Central Rules or the corresponding Rules of her State.