The Sivika Tech. Ltd. is an IT-enabled services company established in 2012 at Gurgaon. The company employed 550 workers, including 350 software developers and technical staff (monthly salaries ₹ 30,000–₹ 80,000), 150 ad

CS Professional · Labour Laws and Practice · PYQS · June 2026
The Sivika Tech. Ltd. is an IT-enabled services company established in 2012 at Gurgaon. The company employed 550 workers, including 350 software developers and technical staff (monthly salaries ₹ 30,000–₹ 80,000), 150 administrative and support staff (monthly salaries ₹ 8,000–₹ 18,000), 50 managerial and supervisory personnel (monthly salaries ₹ 60,000–₹ 1,50,000). Due to global economic recession, Covid-19 outbreak and loss of major client contracts, the company faces severe financial distress in January 2021. The Board of Directors decides to implement cost cutting measures including workforce reduction, salary restructuring, and operational downsizing. The management identifies 120 permanent employees for retrenchment (employed since 2013), including: 50 junior developers (average service: 3 years, average monthly salary : ₹ 35,000), 40 administrative staff (average service: 5 years, average monthly salary: ₹ 12,000), 30 senior developers (average service: 7 years, average monthly salary: ₹ 55,000) without stating the reason in the termination letter. The company issued termination letters on 1st October, 2022 effective immediately, offering 15 days' salary for every completed year of service, one month's salary as notice pay, no prior consultation with workers or trade union. Affected permanent employees approach the Regional Labour Commissioner alleging illegal retrenchment. During the retrenchment process, these 120 staff members went on strike immediately receiving the termination letter on 1st October, 2022 without informing to the management. These 120 staff members did not file their complaint to the Works Committee and the matter was also not referred to the Conciliation Officer. They directly filed the matter before the Industrial Tribunal on 1st January, 2023, the Industrial Tribunal passed an Award on 25th August 2025 without holding a proper enquiry. While passing an Award it was also found that the Labour Audit is pending since last two years, the Labour Inspector have not audited the company regarding various statutory compliances, the company license was also due for renewal and found irregularities in labour compliances. But during the pendency of proceedings, the management changed some service conditions which were unconnected with the dispute, without serving the notice to the workers. The management made the changes in their standing orders too without informing to the workers, and to the appropriate authority. The management made the alteration in the payment of subsistence allowance, the change was that if any workmen is suspended by the employer where the investigation or inquiry and the matter is pending before the court only nominal charges i.e. only 30 percent, will be paid to the workmen during the pendency of the proceedings. When the workers got to know about the changes they threatened to the management and filed multiple cases against the management. Can management unilaterally modify standing orders without prior consultation with the workers ? Additionally, outline the statutory provisions for subsistence allowance, discuss under the Industrial Relations Code, 2020.

Answer & Explanation:

The management cannot unilaterally modify certified Standing Orders without following the statutory procedure prescribed under the Industrial Relations Code, 2020. Section 35 of the Industrial Relations Code, 2020 provides that the certified standing orders shall not be liable to modification until the expiry of six (6) months from the date on which the standing orders or the last modifications thereof came into operation. However, same may be modified if there is an agreement between the employer and workers, or a negotiating union or a Trade Union or other representative body of workers. Application for Modification An employer or worker or a Trade Union or other representative body of the workers may apply to the certifying officer to have the standing orders modified in such application as may be prescribed. Certifying officer means any officer appointed by the appropriate Government, by notification, to perform the functions of a certifying officer under the provisions of Chapter IV - Standing Orders; The application shall be accompanied by copies of the modifications proposed to be made. Where the modifications are proposed to be made by an agreement between the employer and the workers or a Trade Union or other representative body of the workers, a certified copy of that agreement shall be filed along with the application. In the present case, the management of Sivika Tech. Ltd. altered the Standing Orders without informing to the workers and to the appropriate authority. In view of the above mentioned provisions, management unilaterally cannot modify the standing orders without prior consultation with the workers. Provisions for Subsistence Allowance The standing orders certified or modified under Industrial Relations Code, 2020 shall provide that where a worker is suspended by the employer pending investigation or inquiry into complaints or charges of misconduct against him, the employer in relation to the industrial establishment or undertaking shall pay to such worker employed in such industrial establishment or undertaking a subsistence allowance at the rates specified in the Code for the period during which such worker is placed under suspension pending investigation or inquiry into complaints or charges of misconduct against such worker. {Section 38(2)} Rates of Subsistence Allowance The amount of subsistence allowance payable under Section 38(2) shall be- at the rate of fifty per cent. (50%) of the wages which the worker was entitled to immediately preceding the date of such suspension, for the first ninety (90) days of suspension; and at the rate of seventy five per cent. (75%) of such wages for the remaining period of suspension, if the delay in the completion of disciplinary proceedings against such worker is not directly attributable to the conduct of such worker. {Section 38(3)}

Topics: Industrial Relations Code, 2020

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