Standing Orders
What is Standing Orders?
Standing orders are written rules that define the conditions of employment in an industrial establishment, such as classification of workers, working hours, attendance, leave, termination, misconduct and disciplinary action. In India they are governed by the Industrial Employment (Standing Orders) Act, 1946, and are being brought under the Industrial Relations Code, 2020. Standing orders set the same rules for all covered workers and give them legal certainty about their terms.
For US companies setting up operations in India, standing orders matter when the business has a factory, a large operations centre or an industrial establishment that meets the coverage threshold. Many technology and services firms are exempt in some states, but the concept still shapes good HR practice.
Why Standing Orders Matter
- Give clear, uniform terms for workers. - Provide a lawful basis for disciplinary action. - Reduce disputes by setting rules in advance. - Support fair treatment and consistency. - Required by law for covered establishments.
Which Establishments Are Covered
The 1946 Act applied to industrial establishments with 100 or more workers, while the Industrial Relations Code raises the threshold to 300 workers and extends coverage to all industrial establishments. State laws may differ and may extend coverage to other types of businesses. Confirm the position in each state where the company operates.
Model Standing Orders
The government publishes model orders that apply by default until an establishment’s own set is certified. Employers can adopt the model orders or draft their own, which must be consistent with the model and approved by the certifying authority. Many firms use the model as a base.
Contents of Standing Orders
Typical matters include classification of workers as permanent, probationers, temporary, casual or apprentices, shift working, attendance and late coming, holidays and leave, conditions of entry and exit, termination notice, suspension, misconduct and punishment, procedure for disciplinary action, grievance redressal and complaints under the sexual harassment law.
Certification Process
The employer submits draft standing orders to the certifying officer, notifies workers and their representatives, hears objections and receives the certified orders. Once certified, the orders become binding and must be displayed in English and the local language. Changes require a fresh process.
Misconduct and Discipline
Standing orders list acts of misconduct, such as theft, fraud, wilful insubordination, habitual absence, violence and breach of safety rules, and set the procedure of a charge sheet, reply, domestic inquiry and decision. Courts expect strict adherence to the procedure and principles of natural justice.
Termination and Notice
The orders set the notice period or pay in lieu, the grounds of termination and the process for permanent and probationary workers. Where industrial law requires permission for retrenchment or closure in larger units, they must align with it.
Fixed-Term Employment
The standing orders now recognise fixed-term employment, giving such workers benefits equal to permanent workers in hours, wages and allowances, and statutory benefits like gratuity after a shorter period. Include the category in the orders and the appointment letter.
Display and Communication of Standing Orders
Display certified standing orders on a notice board and share copies with workers. Explain them at induction, and give each new worker a short summary in a language they understand. Training managers on the content helps them follow the rules and avoid mistakes in discipline.
Common Standing Orders Mistakes
Frequent errors include not having orders, using outdated texts, ignoring the certification process, applying rules inconsistently, skipping the inquiry procedure and not displaying the orders.
Example: A Manufacturing Unit
A US-owned electronics assembly unit in Chennai grows to 320 workers. It adopts the model orders, then drafts company-specific orders on shifts and attendance. After certification, it displays them in English and Tamil. When a worker is absent without notice, the supervisor follows the procedure in the orders, including a notice and inquiry. The clear process stands up to a later challenge.
IT and IT-Enabled Services
Several states have exempted IT and IT-enabled services from the 1946 Act, and the new Code allows similar flexibility. Even so, the employment contract and handbook should contain the same core ideas of clear rules, a fair process and consistent discipline. Do not assume exemption without checking the notification.
Interaction With Contracts and Policies
Standing orders prevail over the contract where they are more favourable to the worker, and the employer cannot contract out of them. Draft appointment letters and policies so that they match the orders.
Record Keeping and Review
Keep certified copies, notices, minutes of discussions and records of amendments. Review them every few years, especially after changes in labour codes. Seek legal advice before amendments.
Offshore and Contract Workers
Contract workers hired through a contractor may fall under separate laws, and the principal employer may still have duties. Check how these rules apply to workers supplied by agencies.
Workers’ Participation and Objections
During certification, workers and their trade union have the right to raise objections to the draft. Employers should share the draft early, explain the changes and consider reasonable suggestions. An open process reduces later disputes and makes the final orders more accepted by the workforce.
Link to Grievance and POSH Processes
The orders should cross-refer to the grievance committee and to the Internal Committee under the sexual harassment law, so that workers know where to take each type of complaint. Misconduct that falls under the harassment law follows its own inquiry route and not the ordinary disciplinary path.
Training Supervisors
Supervisors apply the rules every day, so they must understand attendance, leave, misconduct and the steps of a charge sheet. Run short sessions with examples, and give them a checklist for each stage. Many cases are lost because a supervisor skipped a step or recorded the facts poorly.
Updating After Law Changes
When the Industrial Relations Code and state rules are fully in force, check whether model orders have changed and whether your certified orders need amendment. Keep a log of changes, consult legal advisers and brief managers before the new version applies.
How kaam.work Supports Standing Orders Compliance
kaam.work is an Employer of Record that employs your India team. We check whether standing orders apply to your business and state, prepare or adopt model orders, support the certification process and align contracts and policies.
We also help managers follow the procedure for discipline and keep the records. With kaam.work, standing orders are clear, certified and applied fairly.
Frequently asked questions
- What are standing orders?
- Written rules of service for workers in industrial establishments.
- Who needs them?
- Establishments above the legal worker threshold, with state variations.
- What are model standing orders?
- Government rules that apply until company orders are certified.
- Do IT firms need them?
- Some states exempt IT and ITES, so check locally.
- Can an Employer of Record help?
- Yes. kaam.work prepares and manages them.
