Structuring Industrial Harmony
The Industrial Relations Code, 2020 (“Code”) brings together and streamlines important aspects of labour relations with the objective of promoting industrial harmony, transparency, and predictability in employer worker relationships. Among its most significant features are the provisions dealing with Standing Orders, Notice of Change and Voluntary Reference of Disputes to Arbitration. These mechanisms collectively regulate service conditions, ensure orderly consultation before altering employment terms and provide a consensual framework for resolving industrial disputes without prolonged adjudication. By codifying rights, obligations, and procedures, the Code seeks to balance managerial flexibility with worker protection while reducing uncertainty and conflict in industrial establishments.
To which industrial establishments do the provisions relating to standing orders apply?
These provisions apply to every industrial establishment in which three hundred or more workers are employed, or were employed, on any day during the preceding twelve months.
Are there any industrial establishments to which these provisions do not apply despite meeting the worker threshold?
Yes. These provisions do not apply to industrial establishments insofar as the workers employed therein are governed by service rules such as Fundamental and Supplementary Rules, Civil Services rules relating to classification, control, appeal, temporary service, leave, regulations applicable to civil services, defence civilians, railway establishment rules or any other rules or regulations notified by the appropriate Government.
Who is responsible for making model standing orders?
The Central Government is responsible for making model standing orders relating to conditions of service and other incidental or connected matters.
What is the status of model standing orders before final certification of standing orders for an establishment?
From the date these provisions become applicable to an industrial establishment until the date the standing orders are finally certified and come into operation, the model standing orders are deemed to be adopted in that establishment.
During this interim period, how are model standing orders treated?
During this period, the provisions applicable to certified standing orders relating to operation and modification apply to the model standing orders in the same manner.
What is the obligation of the employer regarding preparation of draft standing orders?
The employer must prepare draft standing orders within six months from the commencement of the Code, based on the model standing orders.
What matters must be covered in the draft standing orders prepared by the employer?
The draft standing orders must cover all matters specified in the First Schedule and any other necessary matters relevant to the nature of the industrial establishment, provided such provisions are not inconsistent with the Code.
Is consultation required before submitting draft standing orders?
Yes. The employer must consult the Trade Unions, recognised negotiating union, or members of the negotiating council, as applicable, before submitting the draft standing orders.
To whom are the draft standing orders submitted for certification?
The draft standing orders must be forwarded, electronically or otherwise, to the certifying officer for certification.
What happens if an employer adopts the model standing orders without modification?
If the employer adopts the applicable model standing orders, they are deemed to be certified, and the employer must inform the certifying officer in the prescribed manner.
Can the certifying officer require changes even when model standing orders are adopted?
Yes. If the certifying officer has observations, the employer may be directed to amend the adopted standing orders within the prescribed period.
When are modifications to standing orders required to be prepared?
If modifications are required, the employer must prepare and submit the draft modifications within six months from the date the provisions become applicable to the establishment.
What procedure does the certifying officer follow upon receiving draft standing orders or modifications?
The certifying officer issues notice to the negotiating union, negotiating council, Trade Union, or worker representatives (where no union exists) seeking their comments.
Are workers or their representatives given an opportunity of being heard?
Yes. After receiving comments, the certifying officer provides an opportunity of being heard to the concerned unions or worker representatives.
What decision does the certifying officer make after hearing the parties?
The certifying officer decides whether any modification or addition is necessary to render the draft standing orders certifiable and records the decision in writing.
Is there a time limit for certification of standing orders?
Yes. The certifying officer must complete the certification process within sixty days from receipt of draft standing orders or draft modifications.
What happens if the certifying officer fails to act within the prescribed time?
If no decision is made within sixty days, the draft standing orders or modifications are deemed to have been certified upon expiry of that period.
What conditions must be satisfied for standing orders to be certifiable?
Standing orders must provide for every applicable matter listed in the First Schedule and must conform to the provisions of the Code.
Who determines the fairness or reasonableness of standing orders?
The certifying officer or the appellate authority adjudicates upon the fairness or reasonableness of standing orders, keeping in view the model standing orders.
What happens after standing orders or modifications are certified?
The certifying officer sends authenticated copies to the employer and the concerned unions or worker representatives within seven days.
What documents must accompany draft standing orders or proposed modifications?
They must be accompanied by a statement containing prescribed particulars of workers employed, their Trade Union membership, and the negotiating union or council, if any.
Can employers in similar establishments submit joint standing orders?
Yes. Subject to prescribed conditions, a group of employers in similar establishments may submit a joint draft of standing orders.
How are existing standing orders treated upon commencement of the Code?
Existing standing orders continue to operate and are deemed to be certified, insofar as they are not inconsistent with the Code or rules.
What powers do certifying officers and appellate authorities possess?
They have powers of a civil court, including receiving evidence, administering oaths, enforcing attendance of witnesses, and compelling production of documents.
Can clerical or arithmetical errors be corrected?
Yes. Such errors or accidental slips may be corrected at any time by the certifying officer or their successor.
Who can file an appeal against an order of the certifying officer?
The employer, Trade Union, negotiating union, negotiating council, or worker representatives may file an appeal.
What is the time limit for filing an appeal?
An appeal must be filed within sixty days from receipt of the certifying officer’s order.
When do standing orders come into operation?
If no appeal is filed, they come into operation after thirty days from dispatch of authenticated copies. If an appeal is filed, they operate seven days after dispatch of the appellate authority’s order.
How must standing orders be made available to workers?
The employer must maintain the text of certified standing orders in the prescribed language and manner for workers’ information.
Is there a public record of standing orders?
Yes. Certified standing orders are filed in a register or uploaded electronically, and copies are provided to applicants upon payment of prescribed fees.
Can standing orders be modified immediately after certification?
No. They cannot be modified for six months unless there is an agreement between the employer and workers or their representatives.
Who can apply for modification of standing orders after the restricted period?
The employer, worker, Trade Union, or worker representative body may apply for modification.
What must accompany an application for modification?
The application must include proposed modifications and, where applicable, a certified copy of the agreement between the employer and workers.
How are applications for modification processed?
The same provisions applicable to initial certification apply to modification proceedings.
Is oral evidence allowed to contradict certified standing orders?
No. Oral evidence that adds to, varies, or contradicts certified standing orders is not admissible in any court.
Who decides disputes regarding interpretation or application of standing orders?
The Tribunal having territorial jurisdiction over the establishment decides such questions.
Is the Tribunal’s decision binding?
Yes. The Tribunal’s decision is final and binding on the employer and workers.
What is the time limit for completing disciplinary proceedings when a worker is suspended?
The investigation and inquiry should ordinarily be completed within ninety days from the date of suspension.
Is a suspended worker entitled to subsistence allowance?
Yes. Standing orders must provide for payment of subsistence allowance during suspension.
What is the rate of subsistence allowance during suspension?
It is fifty percent of wages for the first ninety days and seventy-five percent thereafter, if the delay is not attributable to the worker.
Can the appropriate Government exempt establishments from these provisions?
Yes. The Government may exempt any industrial establishment or class of establishments, conditionally or unconditionally.
When is notice required before changing service conditions?
Notice is required when an employer proposes to change service conditions relating to matters specified in the Third Schedule.
What are the requirements for such notice?
The employer must give prescribed notice of the proposed change and cannot implement the change within twenty-one days of giving notice.
When is notice not required?
Notice is not required when the change is pursuant to a settlement or award, applies to certain government-regulated employees, is necessitated by an emergent situation involving shift changes in consultation with the Grievance Redressal Committee, or is directed by the Government or a settlement or award.
Can the Government exempt certain establishments or workers from notice requirements?
Yes. If public interest so requires and application would cause serious repercussions, the Government may exempt such establishments or workers.
When can an industrial dispute be referred to arbitration?
When an industrial dispute exists or is apprehended and both the employer and workers agree in writing to refer it to arbitration.
How are arbitrators appointed?
The dispute is referred to such person or persons as arbitrators as specified in the arbitration agreement.
What happens if there is an even number of arbitrators?
The agreement must provide for appointment of an umpire whose decision prevails if arbitrators are equally divided.
What are the formal requirements of an arbitration agreement?
It must be in prescribed form and signed by the parties in the prescribed manner.
Who must receive a copy of the arbitration agreement?
The appropriate Government and the conciliation officer must receive a copy.
What happens if the Government is satisfied that the reference represents the majority?
The Government may issue a notification, and non-signatory employers or workers concerned in the dispute are given an opportunity to present their case.
How are workers represented before the arbitrator?
Representation depends on whether there is a negotiating union, Trade Union, or none, and in individual termination disputes, the worker may appear personally or through an authorised representative.
What is the duty of the arbitrator after investigating the dispute?
The arbitrator submits a signed arbitration award to the appropriate Government.
Can strikes or lockouts be prohibited during arbitration?
Yes. The Government may prohibit their continuance once arbitration is notified.
Does the general arbitration law apply to such arbitrations?
No. The Arbitration and Conciliation Act does not apply to arbitrations conducted under these provisions.
Therefore, the framework governing Standing Orders, Notice of Change, and Voluntary Reference of Disputes to Arbitration under the Code reflects a shift towards structured governance of industrial relations and greater emphasis on consultation and consensus. Standing Orders bring clarity and uniformity to service conditions, the requirement of prior notice safeguards workers against abrupt changes and voluntary arbitration encourages dispute resolution through mutual agreement rather than adversarial processes. Together, these provisions aim to foster stability, fairness and efficiency in industrial relations, reinforcing the broader objective of the Code to create a predictable and cooperative industrial environment conducive to both economic growth and workforce security.
Muneeb Rashid Malik is an Advocate. He tweets @muneebmalikrash.
