The “Model Standing Orders” Default: What Happens When You Don’t Frame Standing Orders Under the New Labour Codes?

On 21 November 2025, the Government of India brought into force the four Labour Codes. Among the most significant changes is the dramatic increase in the threshold for mandatory Standing Orders certification from 100 workers under the old regime to 300 workers under the new.

If you are an employer with 200 employees, here is the immediate takeaway: You are no longer required to frame and get Standing Orders certified by the government.

But this raises a critical question that keeps HR heads and business owners up at night:

“If I don’t frame Standing Orders, am I automatically governed by the Model Standing Orders by default, or do I just operate in a legal grey zone?”

The short answer: You are NOT in a grey zone. The Model Standing Orders apply to you automatically once notified by the appropriate government.

Let me explain exactly how this works and why choosing not to frame your own Standing Orders may be one of the riskiest decisions you can make.

The Dual-Regime Analysis: Legacy vs. New Rules

The Legacy Regime — Industrial Employment (Standing Orders) Act, 1946

Under the Industrial Employment (Standing Orders) Act, 1946 (“IESO Act”), the requirement to frame and certify Standing Orders applied to every industrial establishment employing 100 or more workmen on any day in the preceding twelve months. However, this threshold varied across states; some jurisdictions like Delhi and Karnataka reduced it to 50 workers through state amendments.

Key features of the legacy regime:

Aspect	IESO Act, 1946
Applicability Threshold	100+ workers (50+ in some states)
Obligation	Mandatory to frame and get Standing Orders certified
Default Rule	Model Standing Orders applied provisionally until the employer’s own Standing Orders were certified
Legal Consequence of Non-Compliance	Penalties under Section 13 of the Act

Under the old regime, every employer above the threshold had to act. There was no option to simply “do nothing”; failure to submit draft Standing Orders attracted penalties.

The Active Code Regime — Industrial Relations Code, 2020 (Effective 21 Nov 2025)

The Industrial Relations Code, 2020 (IRC) subsumes three major labour legislations: the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; and the Industrial Disputes Act, 1947.

The most consequential change is the increase in the applicability threshold for Standing Orders certification from 100 workers to 300 workers.

Aspect	Industrial Relations Code, 2020
Applicability Threshold	300+ workers (on any day in the preceding 12 months)
Obligation	Only establishments with 300+ workers must frame and certify Standing Orders
Default Rule	Model Standing Orders apply automatically to establishments below the threshold once notified by the appropriate government
Legal Consequence	The Model Standing Orders become the governing service rules for your establishment

Section 29 of the IRC empowers the Central Government to make Model Standing Orders relating to conditions of service and other incidental matters. The Central Government has published Model Standing Orders for the Manufacturing Sector, Mining Sector and Service Sector pursuant to this provision.

The Critical Question: Are You in a Grey Zone?

No. You are not in a grey zone.

Here is the precise legal position:

If an employer does not draft and submit its own Standing Orders, the Model Standing Orders will automatically apply to the establishment once notified by the appropriate government.

This is a statutory default mechanism; not an optional suggestion. The law has anticipated that employers below the 300-worker threshold might choose not to frame their own Standing Orders, and it has provided a default rule to fill that gap.

How the Default Mechanism Works

Step	What Happens
1	The Central Government notifies Model Standing Orders for different sectors under Section 29 of the IRC
2	The Model Standing Orders become applicable to all industrial establishments employing below 300 workers
3	The employer is governed by these Model Standing Orders; they become the legally enforceable service rules for the establishment
4	The employer cannot simply ignore them or operate without any governing rules

Think of it this way: The Model Standing Orders are like the default settings on your phone. You can choose to customise them (by framing your own Standing Orders), but if you don’t, the default settings apply automatically. You don’t get to operate without any settings at all.

What Do the Model Standing Orders Cover?

The Model Standing Orders cover a wide range of service conditions that are critical to day-to-day employment relationships:

Matter	What It Covers
Classification of Workers	Permanent, probationer, temporary, badli, casual, apprentice, fixed-term
Working Hours & Shifts	Daily hours, spread-over, interval for rest, weekly off, shift change notices
Attendance & Late Coming	Procedures for attendance, consequences of habitual late-coming
Leave Entitlements	Earned leave, sick leave, casual leave, festival holidays, approval mechanisms
Misconduct	Definition of what constitutes misconduct — insubordination, theft, fraud, habitual late coming, etc.
Disciplinary Procedure	Detailed requirements for domestic inquiry, show-cause notices, etc.
Termination & Grievance	Processes for termination, grievance redressal mechanisms

Importantly, the Model Standing Orders for the Service Sector now explicitly acknowledge Work From Home (WFH) arrangements; a clear recognition of the changing nature of work.

The Risks of “Doing Nothing”

If you choose not to frame your own Standing Orders and simply rely on the Model Standing Orders by default, you are not in a grey zone; but you may be making a strategic error.

Risk 1: The Model Standing Orders May Not Fit Your Business

The Model Standing Orders are one-size-fits-all templates. They may not account for:

Your specific industry practices
Your unique shift patterns
Your particular disciplinary needs
Your specific leave policies
Your operational requirements

Example: If your business operates 24/7 with rotating shifts, the default Model Standing Orders may not adequately address your specific shift management needs.

Risk 2: You Lose the “Employer-Friendly” Customisation Opportunity

When you frame your own Standing Orders, you can:

Define misconduct in ways that align with your business reality
Set attendance policies that suit your operations
Establish disciplinary procedures that are efficient and fair
Create leave policies that balance employee needs with business requirements

By doing nothing, you accept whatever the Model Standing Orders prescribe; which may not be the most favourable or practical framework for your business.

Risk 3: Ambiguity in Enforcement

While the Model Standing Orders do apply by default, there may be transitional friction regarding:

The exact date from which they become applicable
Whether they apply to all establishments below 300 workers uniformly
How they interact with existing employment contracts

This is not a “grey zone” in the sense of no law applying; it is a zone of interpretive uncertainty that may lead to disputes during labour inspections or litigation.

State-Specific Nuance: The Concurrent Subject Challenge

Labour is a Concurrent Subject under the Indian Constitution. While the IRC provides the central framework, State Rules can introduce significant variations.

State	Key Nuance
Karnataka	Has issued Draft Industrial Relations (Karnataka) Rules, 2026, with detailed provisions on Standing Orders; has also exempted IT/ITeS establishments from Standing Order requirements until 2029
Maharashtra	Has its own Model Standing Orders under the Bombay Industrial Employment (Standing Orders) Rules, 1959
Delhi	Had reduced the threshold to 50 workers under the old regime; may issue state-specific notifications under the new Code

Action Point: Employers must monitor both Central Rules (Draft Industrial Relations (Central) Rules, 2025) and State Rules applicable to their establishments. Compliance is not “one size fits all.”

The 2026 Core Impact Filters: Intersections You Must Know

1. Fixed-Term Employment (FTE) — Now in the Model Standing Orders

The Model Standing Orders now explicitly cover Fixed-Term Employment classification. Under Section 2(o) of the IRC, fixed-term employees are entitled to equal wages, benefits, and working conditions as permanent employees. Under the Code on Social Security, 2020, FTEs are entitled to pro-rata gratuity after just 1 year of continuous service.

Implication: If you rely on the default Model Standing Orders, the FTE provisions automatically apply to your establishment. You cannot opt out.

2. The 50% Wage Rule & 48-Hour Exit Rule

While these apply primarily to wage calculations under the Code on Wages, 2019, they intersect with Standing Orders in one critical way:

The Model Standing Orders may reference wage payment and settlement procedures
If the Model Standing Orders prescribe specific timelines or procedures that conflict with the 48-hour exit rule, the Code on Wages (being a specific statutory provision) would prevail

3. Grievance Redressal Committees — A Separate Mandate

Even if you are below the 300-worker threshold for Standing Orders, every establishment employing 20 or more workers must constitute a Grievance Redressal Committee. This is a separate, independent obligation under the IRC; not linked to Standing Orders certification.

Financial / Operational Risk Analysis

The Cost of Getting It Wrong

Risk Area	Financial / Operational Impact
Disciplinary Actions	Without clearly defined Standing Orders (your own), you rely on the Model Standing Orders — which may not define misconduct in ways that suit your business
Termination Disputes	If your termination procedures don’t align with the Model Standing Orders, you risk reinstatement orders with back wages
Labour Inspections	During inspection, authorities will check if you are governed by applicable Standing Orders — if you have neither certified your own nor adopted the Model Standing Orders, you face penalties
Litigation Risk	Ambiguity about which Standing Orders apply can lead to prolonged litigation
Operational Disruption	If the Model Standing Orders prescribe procedures that don’t fit your operations, you face practical challenges in day-to-day management

The “Default is Not Always Better” Principle

Relying on the Model Standing Orders by default is legally permissible but it may not be commercially optimal. The Model Standing Orders are designed as a safety net, not as a strategic advantage. Employers who proactively frame their own Standing Orders gain:

Tailored rules that fit their specific business
Clarity for employees and management
Protection during disputes and inspections
Operational efficiency through customised procedures

Core Compliance Checklist for HR / Management – FREE

Immediate Actions (Next 30 Days)

Confirm Your Worker Count
- Verify whether your establishment employs 300 or more workers on any day in the preceding 12 months.
- If below 300, you are not required to frame and certify Standing Orders.
Review the Model Standing Orders for Your Sector
- The Central Government has published Model Standing Orders for Manufacturing, Mining, and Service Sectors.
- Identify which sector applies to your establishment.
- Review the Model Standing Orders to understand what default rules will govern your establishment.
Decide: Adopt or Customise?
- Option A: Do nothing — the Model Standing Orders apply by default.
- Option B: Frame your own Standing Orders (even though not mandatory) to customise rules for your business.
If Adopting Model Standing Orders
- Under the IRC, if you adopt the Model Standing Orders, you must intimate the concerned certifying officer electronically of the specific date from which the Model Standing Orders have been adopted.

Medium-Term Actions (Next 90 Days)

Monitor State Notifications
- Track notifications from the State Governments where your establishments operate.
- States may issue additional guidance or different thresholds for Standing Orders applicability.
Review Existing Employment Contracts
- Ensure your employment contracts are consistent with the applicable Standing Orders (whether your own or the Model).
- Courts have held that certified Standing Orders override inconsistent clauses in appointment letters.
Train HR and Management Teams
- Educate teams on the applicable Standing Orders.
- Ensure disciplinary procedures, leave policies, and attendance rules are aligned with the governing Standing Orders.
Consider Framing Your Own Standing Orders
- Even though not mandatory for establishments below 300 workers, framing your own Standing Orders provides clarity, protection, and operational efficiency.
- Consult legal counsel to draft Standing Orders that are compliant with the IRC and tailored to your business.

Practical Examples: To Frame or Not to Frame?

Scenario	Employer Action	Result
200-worker manufacturing unit	Does nothing	Model Standing Orders for Manufacturing Sector apply by default
200-worker manufacturing unit	Frames own Standing Orders	Own Standing Orders govern the establishment (subject to compliance with IRC)
250-worker IT services company	Does nothing	Model Standing Orders for Service Sector apply by default
350-worker logistics company	Must frame and certify Standing Orders	Mandatory certification under Section 28 of IRC

The Bottom Line

“Doing nothing” is not a grey zone; it is a default setting. But default settings are rarely optimal.

Under the Industrial Relations Code, 2020, establishments with less than 300 workers are not required to frame and certify Standing Orders. However, this does not mean you operate in a legal vacuum. The Model Standing Orders notified by the Central Government under Section 29 of the IRC automatically apply to your establishment by default.

The question is not whether any Standing Orders apply they do. The question is whether you want to be governed by the one-size-fits-all Model Standing Orders, or whether you want to frame customised Standing Orders that reflect your specific business needs, industry practices, and operational requirements.

Proactive, principle-driven compliance; not reactive defaulting is the only path to sustainable operational efficiency and legal protection.

Disclaimer: This content is provided for educational and informational purposes only. It is based on available Central and State notifications as of the date of publication and does not constitute formal legal counsel. Labour laws are subject to frequent amendments and State-specific rules. Employers and individuals are strongly advised to consult qualified legal professionals for advice tailored to their specific circumstances. The author and publisher assume no liability for any actions taken or not taken based on the contents of this article.