Introduction
The
Industrial Employment (Standing Orders) Act, 1948 (“the Act”) was passed against a backdrop of worsening conditions
for workmen in industries. The workers were an oppressed group of people who
were unaware about the conditions of service that affected them. There was no
method of them knowing what were their rights and duties. There was no
bargaining power for them and they were paid low wages. In this light, it was felt
necessary for workers in industries to be aware of the terms and conditions of
their service. The Act was one of the plethora of industrial laws to be passed
around that time and it has played a role in the overall evolution of
industrial harmony and regulation of industrial sector in the country. The Act
requires certain types of employers to publish Standing Orders after getting
them certified by the authorities. The schedule of the Act has listed down
several heads for which the employer has to frame Standing Orders. These
include matters like shifts, holidays, working hours, removal from employment
etc. Once the Standing Orders are certified by the Certifying Officer, they are
statutorily imposed and are binding.
The
problem arises when these Standing Orders are in conflict with another means of
governing working conditions of workmen, which are their employment contracts.
Most of the workmen sign a personal employment contract which lists down their
terms of employment and other conditions that are agreed between them and the
employer. This paper in an attempt to react to the tussle between these
employment contracts and standing orders. Both of these can be useful and
harmful for employees in a variety of cases and it is important to figure out
which of these two must be given preference in case there is contradiction. The
present paper highlights the logical, legal and ethical reactions to the issues
and proposes a model which would further the ultimate aim of labour welfare.
The
Merits Of Employment Contracts Over Standing Orders
Precise and Comprehensive
The
Preamble to the Act gives an important declaration of why the Act was enacted.
The Preamble of the Act states that the Act was enacted to made employers to
define the conditions of employment with precision. Also, the Preamble talks
about the legislative intent of making the workmen know their conditions of
employment. There are two things that are clear from the Preamble of the Act.
One is that the conditions of the employment of workmen should be precise and
detailed. The second is that the workmen should be made aware of these
conditions. A private employment contract between a workmen and an employer
fulfills both of these conditions. A private employment contract is a binding
contract between the workmen and the employer and they negotiate it before the
workmen is employed. In this employment contract, the worker agrees on the
conditions of his service which includes things like the salary, reporting
time, working hours, code of conduct, leaves, holidays etc. It is a lengthy
document that has all the important information which could affect the workmen
at his employment. Also, these conditions agreed upon are fairly precise and
comprehensive. They are tailor-made for the particular workman. Since the
workmen also signs and enters into the contract willfully, he is also aware of
his rights and duties. Therefore, it can be reasonably argued that the private
employment contracts fulfill the objects that the Standing Orders Act seeks to
achieve.
Flexible and Modifiable
Apart
from this, the Standing Orders issued under the Act majorly deal with the
matters listed out in the schedule. These matters might not include all the
conditions of service for the workmen and they are limited only to the matters
listed out in the schedule. [1]
However, there is no such restriction in case of private employment contracts
and they can include any number of conditions of service for the workmen. The
employment contracts are more flexible than the Standing Orders and therefore
are more beneficial to the workmen.
The
Standing Orders are not practical in another aspect as well. Industries usually
have different types of workers who possess different skill sets and can have a
special skill which other workers don’t possess. These special workers might
also have a very limited or a major role in the industry which would require
them to be either present in the factory for a very less time or for a lot of
time. In such cases, having only one set of Standing Orders applicable to
everyone can be very impractical. This is where employment contracts would
prove to be useful. An employer can have different conditions of service for
different workmen and all the changes can be done in the contracts. For someone
who has special skill set, the employer can draft the conditions of service
keeping in mind the worker’s skills and requirements. For Example- The schedule
to the Act requires the employer to make Standing Orders with respect to attendance
and late coming. If there is an employee who has a special knowledge about the
working of a machine and he is hired for only that purpose, he will be required
to work only when the machine is in use. If the machine is used only for half
an hour a day, he would be required for only that period. In this case, if a
Standing Order provides that attendance would be taken at 9:00 am, then for a
worker whose job starts at 3:00 pm, it would be unworkable. On the other hand,
his employment contract could mention that his attendance would be taken at
3:00 pm, whereas the employment contract for all other workers could state that
the attendance would be taken at 9:00 am. This would be a more beneficial way
for modifying the conditions of service for different workers.
One
of the arguments in favour of Standing Orders is that it has the force of law
as it is statutorily backed. This can be true in the case of private employment
contracts as well. A contract also has the force of law and it is binding over
the parties. There is no way in which a contract is of a lesser legal standing
than a Standing Order. Also, it is an accepted position that in cases where
there is a general law and a specific law governing the same subject, the
specific law prevails. This is because specificity provides with more clarity
and clarity and certainty are desired to avoid disputes.
Therefore,
a first reaction to the dispute is that there is enough logic and reasoning for
private employment contracts to prevail over standing orders due to the
above-mentioned reasons. However, in order to have a holistic view about the
subject, it is important to also look into the use of standing orders and if
there are important justifications to allow them to prevail over employment
contracts.
Reasons
For Having Standing Orders Over Employment Contracts
Uniformity in application
The
Act was a major step in the direction of promoting clarity and awareness of
conditions of employment. One of the major reasons for the enactment of
Standing Orders Act which is not expressly stated in the preamble of the Act is
that of uniformity. All the employees of the industry have to uniformly abide
by the Standing Orders and there are no exceptions. This is particularly useful
in industries where there was a lot of discrimination and the cries of unfair
treatment by workers went unheard. Some of the workers had different conditions
of service and all of this depended on the bargaining power of the worker. It
is common knowledge that the workers have been traditionally an oppressed
community and they have little or no bargaining power at the table when it
comes to negotiating the conditions of their service. In this regard, the
Standing Orders are a welcome step because they take care of the weakest of the
worker who is not able to negotiate his employment conditions efficiently. The
application of the conditions is uniform and without any prejudice to any
worker.
Another
purpose served with the Act is that there is very less confusion and
discrimination. It is absolutely desired that there is minimum confusion of
part of the workers about their conditions of service. The Standing Orders Act
requires the posting of the certified Standing Orders and it ensures that there
is no confusion in the minds of the workers about what conditions govern them.[2]I
think having different employment contracts governing different employees would
mean that the whole system is marred by confusion and uncertainty. People at
the same position might have different employment terms in their employment
contracts. For industries where it might not be possible for each employee to
understand his/her employment contract fully and where there might be
confusions regarding the same, having a uniform rule for everyone would promote
compliance, understanding and harmony. Employers would have no complaints of
discrimination and this uniform application can then serve multiple purposes.
Clarity and equal treatment promotes cordial relations between employers and
workmen and it leads to better efficiency and output.
Transparency/ Disclosure
Incidental
to the above point about uniformity and clarity, Standing Orders promote a
culture of transparency and accountability. Victimization was quite common and
this was majorly because the workers were not entitled to know what their
conditions of service were and how they were expected to work. Without being
aware of the terms and conditions of their service, workmen would be never sure
as to what should they do and what not. In such a situation, their outputs were
diminished because they were never sure. The Standing Orders promote
transparency. The various requirements of letting workmen know their conditions
of service ensure that the workman knows all his duties and rights. This
feature of Standing Orders does not figure in the case of employment contracts.
Employment contracts are between parties only and there is no requirement to
publish these contracts. Also, the disclosure requirements ensure that there is
some accountability on part of the employers. If employment contracts are
allowed to prevail over the standing orders in different cases, this purpose of
transparency will be defeated and this would hamper the growth and harmony in
industrial relations.
Legal Force Of Standing Orders
It
was mentioned above that employment contracts have the force of law. However,
the difference between the legal sanctity of an employment contract and
Standing Orders is that employment contracts are private laws. A contract
between two parties is a private arrangement between them and is a private
legal document. However, the Standing Orders under this Act have a legal
backing of a statute enacted by the state. The Act has been enacted keeping in
mind the overall welfare of employees and it is a better legal alternative to
private employment contracts. It is very difficult to litigate disputes in
contract law. However, Standing Orders are pre-determined rules that have
backing and application of mind by authorities. The Certifying Officers are
entrusted the task of looking into the fairness and reasonableness of the draft
standing orders and it ensures that these orders are in conformity with the
standards moral and legal standards. This assessment of conditions of service
is not possible in employment contracts and therefore there may be a lot of
cases where such conditions are unjust on the workmen.
Apart
from the reasons mentioned above, it is important to note that the Standing
Orders are a method to provide for collective bargaining power of the workmen.
It was observed in the case of Western
India Match Company Ltd. vs. Workmen that there used to be two parties on
the negotiating table before the passing of the Act but this Act has now
ensured that there is a third party, the State, which is representing the
interest of the society at the table.[3]
Therefore, it cannot be ignored that the Standing Orders Act is a very forceful
alternative to having personal employment contracts and it has many uses over
the private employment contracts.
Future:
Fusion Of Both?
My
initial reaction of thinking that employment contracts should be given
preference over Standing Orders was changed when I put thought into the uses
and aims of having Standing Orders. On a whole, both of these methods are good
in their own way. I feel that while deciding which of the two should prevail,
the best qualities of the two should be taken into consideration. The Standing
Orders play a very important function of laying down uniform rules having a
legal backing. Therefore, in my opinion, these Standing Orders should be
treated as a baseline for the conditions of service. These should serve as the
basic conditions of service that apply to everyone. In addition to these, in
certain cases, if there is need to interpret further, then the employment
contracts should be looked into. They should not be utterly disregarded and
should serve as a tool to interpret conditions of service where they is a
worker with special skills or job profile who needs certain conditions in
addition to the ones mentioned in the Standing Orders. In case there is a need
for difference in employment conditions from Standing Orders for particular
employees, it should be allowed via employment contracts by evolving a
mechanism where such cases are assessed on case to case basis by the Certifying
Officer. These models are a very basic proposal of what needs to be done. The
proper form and working of such model needs to be determined to ensure that the
welfare of labour is given paramount importance. A fusion of both might be able
to provide a system which is dynamic as well as rigid.
Dev Chaudhary
[1]
Rohtak Hisar District Electricity Supply
Co. Ltd. vs. State of U.P. 1966 AIR 1471
[The Court in this case had held that it is not for the employer to go
outside the matters set out in the schedule and form Standing Orders with
respect to them. Only the Appropriate Government has the power to include any
matter in the Schedule on its discretion.]
[2]
Section 9 requires the certified standing orders to be posted prominently by
the employer in English and in the language which is understood by most of the
workers in the industry.
[3] 1973
AIR 2650
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