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21 August 2019
On 24 July 2019 the Haryana state government issued a notification under the Industrial Employment (Standing Orders) Act 1946 (Standing Orders Act), which reiterated the notification of 12 December 2018 and introduced a new requirement for principal employers and contractors to file an undertaking of compliance with the act.
Under the 2018 notification, all shops and commercial establishments constitute notified establishments under the Standing Orders Act. Further, the act applies to all shops and establishments in Haryana state, provided that they have employed 50 or more workers in the past 12 months.
The Standing Orders Act also applies to all contractors which must fulfil a contract, provided that they have employed 50 or more workers in the past 12 months.
To add to this burden, the 2019 notification requires principal employers and contractors to file an undertaking of compliance with the Standing Orders Act with the Haryana labour commissioner's head office, thereby making compliance with the act a condition precedent for obtaining a registration or licence under:
The Standing Orders Act applies only to 'workers' (ie, persons who perform manual, unskilled, skilled, technical, operational, clerical or supervisory work, excluding those employed mainly in a managerial, administrative or supervisory capacity whose monthly wages exceed Rs10,000). It requires employers to implement standing orders, which must be certified by an officer appointed under the act. The standing orders must provide for the matters set out in the schedule to the act, including:
Failure to formulate or certify standing orders, as well as deviation from certified standing orders, will result in a fine under the act.
The 2019 notification aims to ensure the effective enforcement of the Standing Orders Act. However, employers may perceive the Haryana government's requirement of compliance with the act as a condition precedent to obtaining registration under other labour laws as a roadblock. In particular, multinationals would arguably rather have the flexibility to create policies and processes that align with global standards and market norms.
Further, the need for compliance under the Standing Orders Act, defeats the objective of ease of doing business. In fact, the Karnataka state government recently exempted all knowledge-based industries (eg, information technology, IT-enabled services, start-ups, animation, gaming, computer graphics, telecoms, business process outsourcing and knowledge process outsourcing) under the act for another five years with effect from May 2019.
For further information on this topic please contact Pooja Ramchandani or Suryansh Gupta at Shardul Amarchand Mangaldas & Co by telephone (+91 11 4159 0700) or email (firstname.lastname@example.org or email@example.com). The Shardul Amarchand Mangaldas & Co website can be accessed at www.amsshardul.com.
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