The Second National Commission on Labour constituted by the first National Democratic Alliance (NDA) Government in the year 1999 under the leadership of Shri Ravindra Verma, has characterised the existing labour laws as complicated and containing obsolete and outdated provisions not in consonance with the prevailing situation. In order to streamline the labour enactments in the country, it inter alia, has recommended consolidation of Central labour enactments into broad parameters, namely, (a) industrial relations; (b) social security; (c) wages; and (d) safety, health, welfare and working conditions.
While the second NDA Government made the foundation by drafting the Bills, the present Central Government passed the first one, Code on Wages[1] in the year 2019. The remaining three Codes, namely, Code on Industrial Relations, 2020[2] (hereinafter referred to as “CoIR”), Code on Social Security[3] and Code on Occupational Safety, Health and Working Conditions, 2020[4] in the month of September 2020 after the scrutiny of the Parliamentary Standing Committee. Rules have been framed under these Codes and sent to the stakeholders for their objections, suggestions and recommendations, these Codes were expected to form part of the statute book on 1-4-2021, it appears.
The CoIR consists of 14 chapters, 104 sections and 3 Schedules. This Code seeks to amalgamate, simplify and rationalise the three existing enactments, namely, the Industrial Disputes Act, 1947[5] (hereinafter referred to as “the ID Act”), the Trade Unions Act, 1926[6] and the Industrial Employment (Standing Orders) Act, 1946[7]. This note makes an attempt to highlight some of the important matters being brought in Chapter IV of CoIR which deals with the Standing Orders.
Standing Orders: In accordance with Section 28 of Chapter IV of the CoIR, the provisions of the said chapter shall apply to every industrial establishments wherein three hundred or more than three hundred workers are employed or were employed on any day of the preceding twelve months. It may be noted that in this section, the drafters have used the term “worker”. In view of the above, it can safely be deduced that for the purpose of Section 28 of the Code, the magic number of three hundred will have to be calculated by ONLY taking in to account the “workers” so defined under Section 2(zr) of the Code. It may be noted that the said term “worker” inter alia excludes not only the persons who are mainly in a managerial or administrative capacity but also those who are employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees or an amount as may be notified by the Central Government from time to time. It is further added that the term “worker” will cover all the persons employed in trade or industry ONLY for the purposes of Chapter III which deals with “Trade Unions”. This has nothing to do with the Chapter IV (Standing Orders). In consonance with Sections 29 and 30 of the CoIR, the Draft Standing Orders will have to be prepared within six months of the commencement of the Code anchoring on the Model Standing Orders to be framed by the Central Government under Section 29 of the Code. However, if the establishments desired to adopt the Model Standing Orders as specified above, the certifying officer concerned will have to be notified. In any case, the Model Standing Orders to be framed by the Central Government and the State Governments concerned. However, the proviso to Section 30 reads as under:
“Provided that if the certifying officer has any observation, he may direct such employer to amend the Standing Order so adopted within such period as may be prescribed.”
In this regard, it will be pertinent to note Rules 7, 8 and 9 of the Draft Industrial Relations (Central) Rules, 2020 which read as under:
7. Manner of forwarding information to certifying officer under sub-section (3) of Section 30.—
“(1) If the employer adopts the Model Standing Order of the Central Government referred to in Section 29 with respect to matters relevant to his industrial establishment or undertaking, then, he shall intimate the certifying officer concerned electronically the specific date from which the provisions of the Model Standing Order which are relevant to his establishment have been adopted.
(2) On receipt of information in sub-rule (1) the certifying officer within a period of thirty days from such receipt may give his observation that the employer is required to include certain provisions which are relevant to his establishment and indicate those relevant provisions of the Model Standing Orders which have not been adopted and shall also direct the employer to amend the Standing Order so adopted, by way of addition, deletion or modification within a period of thirty days from the date of the receipt of such direction and ask for compliance report only in respect of provisions which the certifying officer seeks to get so amended and such report shall be sent electronically by the employer.
(3) If no observation is made by certifying officer within a period of thirty days of the receipt of the information as specified in sub-rules (1) and (2), then, the Standing Order shall be deemed to have been adopted by the employer.
8. Manner of choosing representatives of workers of the industrial establishment or undertaking for issuing notice by certifying officer where there is no trade union operating, under clause (ii) of sub-section (5) of Section 30.— Where there is no such trade union as is referred to in clause (i) of said sub-section (5), then, the certifying officer shall call a meeting of the workers to choose three representatives, to whom he shall, upon their being chosen, forward a copy of the Standing Order requiring objections, if any, which the workers may desire to make to the Draft Standing Order to be submitted within fifteen days from the receipt of the notice.
9. Manner of authentication of Certified Standing Orders under sub-section (8) of Section 30.— Standing Orders or modification in the Standing Orders, certified in pursuance of sub-section (8) of Section 30 or the copies of the order of the appellate authority under sub-section (1) of Section 33 shall be authenticated by the certifying officer or the appellate authority, as the case may be, and shall be sent electronically within a week to all concerned, but there shall not be any requirement of certification in cases of deemed certification under sub-section (3) of Section 30 and in cases where the employer has certified adoption of Model Standing Orders.”
The Certified Standing Orders which is in vogue now in the industrial establishments will become otiose once the Model Standing Orders are framed by the Central Government or the State Government concerned as the case may be as the said Certified Standing Orders cannot be saved under Section 104 of the CoIR as the said Standing Orders were made in accordance with the provisions of the Industrial Employment (Standing Orders) Act, 1946 which is going to be repealed with effect from the date appointed in the notification in this behalf. Hence, once an industrial establishment intimates its desire to adopt the Model Standing Orders notified by the Central or the State Government concerned, what is the necessity for the certifying officer to make observations to make it mandatory for the employer to make amendments to the Model Standing Orders as per the proviso to sub-section (3) to Section 30 the CoIR read with sub-rule (2) of Rule 7 of the Draft Industrial Relations (Central) Rules, 2020?
In this regard it will be useful to go through the following:
“Under the Industrial Employment (Standing Orders) Act, 1946, (hereinafter referred to as ‘the IESO Act’) the employer of the ‘industrial establishment’ is required to submit Draft Standing Orders proposed by him for adoption in his industrial establishment. The Draft Standing Orders should contain every matter set out in the Schedule of the Act. Where Model Standing Orders have been prescribed the draft submitted by the employers must be in conformity with the Model Standing Orders provided under Section 15(2)(b).”
(emphasis supplied)
Since the Draft Standing Orders submitted by the employer should be in conformity with the Model Standing Orders prescribed under Section 15(2)(b) of the ISEO Act, the propriety of the proviso to sub-section (3) of Section 29 of CoIR, could not be understood. In view of the above, the Central Government is requested to consider the deletion of the proviso to sub-section (3) to Section 30 and also Rule 7 of the Draft Industrial Relations (Central) Rules, 2020.
† Regional Director: Employee / Labour Relations and Country HR Head – Caterpillar India Private Limited. Author can be reached at rajagopalan_sridhar@cat.com
[2] Industrial Relations Code, 2020
[3] Code on Social Security, 2020
[4] Occupational Safety, Health and Working Conditions Code, 2020
