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Ishaan Saraswat*
I. INTRODUCTION
The Industrial Employment (Standing Orders) Act, 1946 (‘Standing Orders Act’), requires employers in industrial establishments to define conditions of employment to maintain industrial stability and transparency, hence, protecting the employer & their establishment, and the employees & their rights by fructifying industrial peace. However, when the pandemic forced a shift to work-from-home in India, the Standing Orders Act fell short, as they lacked provisions for remote setup. At the same time, Draft Model Standing Orders for Service Sector, 2020 (‘Model Orders’) were introduced under §29 of the inactive Industrial Relations Code, 2020 (‘IRC’). These Model Orders provide for the default rules on shift work, attendance, leave, wages, retirement, transfers, medical examination etcetera, for service sector establishments under the to-be-enforced IRC. Notably, the Model Orders introduced a work-from-home provision. Hence, the promulgation of the Model Orders during the pandemic effectively bridged the deficiency left by the Standing Orders Act by catering to the emergent needs of a rapidly changing work landscape.
II. SCOPE AND APPLICABILITY OF THE MODEL ORDERS
The Model Orders as per Rule 1(2), are designed to apply to ‘service sector’ establishments covered by the Occupation Safety, Health and Working Conditions Code, 2020 (‘OSH Code’), with a prerequisite of having at least three-hundred workers. ‘Establishment’ under §2(1)(v) of the OSH Code entails mines, ports, factories, construction sites, plantations, manufacturing buildings with ten or more workers, or a place with ten or more workers. Therefore, the criteria is that only ‘establishments’ under the OSH Code, being in the ‘service sector’, subject to the IRC, and employing at least three-hundred workers, are within the scope of the Model Orders.
However, the IRC and the Model Orders do not shed any light on the scope of ‘service’ sector. While the Model Orders’ Rule 5 and a Ministry of Labour and Employment press release suggest that the service sector includes the Information Technology (‘IT’) Sector, it lacks clarity on other which other industries are included.
This lack of clarity raises questions regarding the intended coverage and effectiveness of the Model Orders. Nevertheless, the National Industrial Classification of 2008 lists services to define the ‘service sector’, which include wholesale and retail trade, transportation and storage, information and communication, financial and insurance activities, consultancy services, professional-scientific-technical activities etcetera.
Precedents regarding activities enumerated above highlight that the IT sector[1], banking[2], insurance[3], hospitality services[4], research institutions[5], and logistic services[6] have been acknowledged as ‘industries’ with employees considered as ‘workers’ under the Industrial Disputes Act, 1947 (‘IDA’).
Considering the shared interpretation of ‘industry’ and ‘workers’ in §§2(p) & 2(zr) of the IRC – and the fact that these sectors typically employ more than ten individuals in a place which makes them an ‘establishment’ under the OSH Code – establishments with at least three-hundred workers would be subject to the Model Orders. However, medical services[7], consultancy services[8], and education services[9], although considered as ‘industries’, do not include ‘workers’ under the IDA (and therefore, IRC), and may not be subject to the Model Orders.
Notably, not all of the aforesaid industries subject to the Model Orders would be capable of performing work-from-home arrangements. Only the IT, banking, insurance, and research activities may be performed remotely. Other ‘service sector’ activities, such as, the hospitality sector and logistics sector, which although may be subject to Model Orders generally, do not naturally accommodate work-from-home. Hence, in the following sections, the author explores the Model Orders regulation of work-from-home with a focus on establishments, that apart from meeting the criteria of Model Orders, can perform remote work.
II. PAUCITY OF MINIMUM STANDARDS
In Delhi Transport Corporation v. D.T.C. Mazdoor Congress, the issue revolved around certain standing orders that granted the management unrestricted power to terminate employees. The Supreme Court of India emphasized that the employer’s rule-making authority, as reflected in standing orders, must not be arbitrary, unreasonable, or infringe upon employee rights. The Apex Court stressed on the importance of fairness and reasonableness and to avoid arbitrariness in creating standing orders that do not detriment workers’ interests.
Further, in Bagalkot Cement Company v. R.K. Pathan, the Supreme Court of India has held that the object of the Standing Orders Act is to require the employers to make the conditions of employment precise and definite, and to prescribe these conditions in the form of standing orders so that what may be governed by a contract would be governed by the statutory standing orders. The Court hence concluded that the conditions of employment must be well-defined and be precisely known to both the parties.
On an overall reading, it is clear that firstly, standing orders must be crafted in a manner that isn’t prejudicial to the employees, and secondly, that the standing orders must not be capricious and must be clear. Drawing from this discussion, lack of minimum standards in standing orders fails to make the conditions of labour clear. Thus, it detriments workers because it leads to arbitrary decisions by employers in the absence of any pre-defined rules.
The provision for work-from-home per Rule 10 of the Model Orders solely states that, subject to conditions agreed between the employer and workers, the employer may allow work-from-home.
Firstly, it is contended that work-from-home conspicuously sticks out like a sore thumb, since the Model Orders, except for work-from-home, establishes clear minimum standards for all other aspects of employment, such as shift work (Rule 8), attendance (Rule 11), leave (Rule 12), wages (Rule 14), retirement (Rule 17), transfers (Rule 18), and medical examination (Rule 19 & 20). Secondly, this discrepancy is troubling because, as has been highlighted before, the work-from-home regulation fails to establish any conditions of labour and instead allows unilateral decision-making by the employers. This discrepancy becomes much more apparent when foreign jurisdictions with a comparable labour market are observed since they provide essential rights for remote work that our Model Orders lack.
III. COMPARITIVE ANALYSIS OF WORK-FROM-HOME REGULATIONS
Before we dive into a comparative analysis, it is befitting to justify the choice of countries India would be compared with. The author employs the Low-Cost Country Sourcing (LCCS) approach, which focuses on nations with lower material costs, labour expenses, and tax rates to reduce production costs but with regulated wage labour, which apart from India, includes Brazil, Mexico and Thailand.
Firstly, Article 75F of Brazil’s Consolidation of Labour Laws (‘Brazilian Law’) mandates employers to prioritize employees with disabilities or with caregiving responsibilities when allocating remote work positions. Secondly, as per Section 23/1(5) of Thailand’s Labour Protection Act (‘Thailand Law’) and Appendix 1(k) of Mexico’s Labour Standards (‘Mexican Law’), employers have to pay for any appropriate telework-related costs. Thirdly, Section 23/1(5) of Thailand Law and Rules 5.1(k), 5.8 & Appendix 5 of Mexican Law mandate employers to provide necessary equipment and cover installation, repairs, and maintenance costs in a work-from-home setup.
Further, Article 75B(9) of Brazilian Law extends Brazil’s working hours legislation to remote workers, whilst mandating electronic timekeeping systems. Rule 5.2(e) of Mexican Law and Section 23/1’s First Proviso of Thailand Law grant employees the right to disconnect after working hours, and mandate the employer to abide by the same. Lastly, per Rules 5.2(a) & 5.11 of Mexican Law and Section 23/1’s Second Proviso of Thailand Law, teleworkers enjoy the protection against occupational accidents and illnesses to maintain parity with on-site employees.
IV. WAY FORWARD FOR THE INDIAN WORK-FROM-HOME-REGIME
The comparative analysis of work-from-home regulations above sheds light on the pitfalls of India’s work-from-home regulations, such as, the lack of safeguarding the rights and well-being of employees, not promoting inclusivity by not mandating work-from-home to accommodate specific employee needs such as health conditions, pregnancy, or caregiving responsibilities, and ensuring a productive environment. It is imperative to consider the following recommendations to enhance and refine the proposed work-from-home regulations.
It is crucial to include remote work in the Model Orders for specific employee needs, such as pregnant individuals, those with health conditions incompatible with onsite work, or caregivers of young children or dependents-with-disabilities, which fosters inclusivity. Further, it is vital to mandate employers to reimburse teleworking-related expenses like home office setup, internet, and utilities to ensure remote work is financially viable for all employees, and to ensure that employees have the necessary tools and resources for effective work.
Furthermore, the OSH Code, as apparent from §23(2), does not acknowledge pertinent concerns regarding the well-being of workers operating beyond the confines of a physical establishment. For example, the OSH Code does not address remote workers’ specific safety and health needs, which drawing from the comparative analysis above, reinforced with International Labour Organization’s standards, include designated non-work time, ergonomic (not risking injuries or pain) equipment, secure networks, and flexible breaks (for mental health, eye fatigue, migraines, etcetera). In the same vein, §25 of the OSH Code provides for working hours, however, it does not address provisions for timekeeping and the right to disconnect regarding remote workers which the comparative analysis highlighted, which may potentially lead to employee exploitation, and needs to be tackled in the Indian law.
V. CONCLUDING REMARKS
The scope and applicability of the Model Orders are ambiguous, raising questions about which industries and employees are covered, and requires clarifications. In addition to this, this paper critiqued the Model Orders’ lack of minimum standards for remote work, highlighting the vulnerability of employees to arbitrary decisions by employers. Comparative analysis with other countries reveal deficiencies in India’s regulations, particularly in inclusivity and safeguarding remote workers’ rights. It was hence the objective of the author to establish and recognize the evolving nature of work and adapt regulations to promote fairness, inclusivity, and productivity in the ever-expanding world of remote work.
Ultimately, the author advocates for necessary adaptations in India’s regulations to promote fairness, inclusivity, and productivity in the realm of remote work. This piece recommends specific changes, including accommodating specific employee needs, mandating employer reimbursements for teleworking expenses, and introducing safety and well-being provisions for remote workers in the regulatory framework.
† Ishaan Saraswat is a final year student at Jindal Global Law School, Sonipat.
[1] Thirumalai Selvan Shanmugam v Tata Consultancy Services Limited I.D. No. 34/2016, Principal Labour Court of Chennai; The Commissioner of Income-Tax LTU v Texas Instruments India Pvt. Ltd. I.T.A. Nos. 141/2020 & 150/2020, High Court of Bengaluru
[2] Accountants & Clerks, and Bank Secretaries have been held to be workmen per Punjab Coop Bank v R.S. Bhatia AIR 1975 SC 1898; Kavitam Co-operative Rural Bank Ltd. v Presiding Officer Labour Court, WP 2208/1997, Andhra Pradesh High Court respectively. However, Bank Managers are not workmen per Karnataka Bank Ltd. v Sunita Vatsaraj 2008 (1) BomCR 891
[3] Development Officers held to be workmen per Ishwarlal Ramhariya v New India Assurance Co. Ltd. WP 2055/2001, Madhya Pradesh High Court. However, Insurance Inspectors held to be in administrative capacity and not workmen per G. L. Pawha v Chairman, New India Assurance Co. Ltd. WP 593/1999, Delhi High Court
[4] Nawab Ali and Ors. v Management of Indian Hotel Company Ltd. (Taj Palace Hotel) I.D. No. 194/2016, Rouse Avenue Delhi District Court
[5] Workmen of Indian Standards v Indian Standards Association AIR 1975 SC 145
[6] Vipin Verma v Management of Blue Dart Express Ltd. I.D. No. 245/2009, Karkardooma Delhi District Court; The Management of Toll (India) Logistics Pvt. Ltd. v R. Ravikumar WP 1358/2018, Madras High Court
[7] M.M. Wadia Charitable Hospital v Dr. Umakant Ramchandra Warerkar WP 3730/1993, Bombay High Court
[8] Santram Spinners Limited v Babubhai Magandas Patel Special Civil Application 10741/2008, Gujarat High Court
[9] A. Sundarambal v Government of Goa, Daman and Diu AIR 1988 SC 1700