Fact Check: Did the Supreme Court pass any order staying MHA Order dated 29-03-2020 directing private companies to make full payments to their employees? [Updated]

Many news websites published a news story yesterday that the Supreme Court has stayed a Ministry of Home Affairs order dated March 29, 2020 directing industries, shops and commercial establishments to pay full salary/wages to all its staff, workers, contract workers, casual workers during the period of lockdown.

Some of such news articles are:

  1. https://www.timesnownews.com/india/article/sc-stays-mha-order-to-companies-directing-not-to-cut-salaries-during-lockdown/592396
  2. https://ahmedabadmirror.indiatimes.com/news/india/supreme-court-puts-on-hold-mha-circular-on-full-payment-of-wages-during-lockdown/articleshow/75755753.cms
  3. https://www.financialexpress.com/india-news/lockdown-news-supreme-court-wages-full-payment-workers-employers-prosecution-coronavirus-update/1959905/
  4. https://www.republicworld.com/india-news/law-and-order/sc-stays-mha-circular-directing-private-companies-to-make-full-payment.html

Let us test the veracity of such claims. On 15th May, 2020 some petitions heard in Supreme Court which challenged Clause (iii) of the MHA Order No. 40-3/2020-DM-I-(A)[1]. The three judge bench of L. Nageswara Rao, Sanjay Kishan Kaul and BR Gavai, JJ  issued notice in a batch of 15 petitions challenging the  clause mentioned above. Let us have a look at some of those orders.

In Ficus Pax Private Ltd vs. Union of India, Writ Petition No. 10983/2020 dated 15.05. 2020, the same clause was challenged. The written order of this case just mentions

‘Issue notice returnable next week’[2]

There is no mention that any interim order has been passed to stop any coercive action against employers under the MHA circular. The same interim order has been mentioned in 12 other petitions excluding Ficus Case which challenged the same clause.

In rest of the two petitions namely Hand Tools Manufacturing Association v Union of India, Writ Petition No. 11193 of 2020[3] and Indian Jute Mills vs Union of India, Writ Petition No. 11281 of 2020[4] the written order of the case states that

‘Issue notice returnable next week. No coercive action shall be taken in the meanwhile.’

If we have a look at the petition filed in the Hand Tools and Indian Jute Mills case, they have also challenged clause (iii) of the MHA circular mentioned above, which directed full payment of wages during the lockdown. In this particular case, direction was given by the Court that no coercive step should be taken.

There are two parts to the MHA order – The directive part – i.e. to make the payment of wages

“All the employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their workplaces, on the due date, without any deduction, for the period their establishments are under closure during lockdown period.”

And the second part is the coercive part ‘It is further directed that in case of violation of any the above measure, the respective State/UT shall take necessary action under the act’ [5]if the aforementioned obligation is not discharged.

It is clear from the Supreme Court order in Govt. of India v. Workmen of State Trading Corporation,[6] that the obligation to pay the wages remains, whereas the Court only in Hand Tools case and Indian Jute Mills case has directed that no coercive action be taken.

The Court order is silent whether its direction is In Rem or In Personem especially since it granted this relief in 2 petitions and denied this relief in 13 petitions.

Question is whether the Court’s order can be interpreted to mean the MHA Order dated 29-03-2020 has been stayed.

All the above reports were published before the Court’s order was available on the Supreme Court’s website.

In a haste to report news first, many news websites are reporting cases without waiting for the written order. They are quick to report comments made by judges in open court without mentioning the context in which they were said. Jumping to conclusions without waiting for Court order can lead to such results. Sometimes the comments made in Court are not reflected in the written order and therefore do not have any legal consequences. This leads to wrong information being disseminated into the public, who rely on such reports. Such reporting can mislead the entire country in believing wrong information and should be discouraged.

Update:

In an order dated 12.06.2020[7] the 3-judge bench of Ashok Bhushan, SK Kaul and MR Shah, JJ  held that “efforts should be made to sort out the differences and disputes between the workers and the employers regarding payment of wages of above 50 days and if any settlement or negotiation can be entered into between them without regard to the order dated 29.03.2020, the said steps may restore congenial work atmosphere.”

In another order dated 04.06.2020[8], the Court had directed,“In the meantime, no coercive action, against the employers shall be taken pursuant to notification dated 29.03.2020.” Read details about the 4.06.2020 order here[9]. The Court, in the present order dated 12.06.2020 has made it clear that the said order shall continue in all the matters. More details of the order dated 12.06.2020 can be read here.[10]

The Supreme Court order dated 04.06.2020 and 12.06.2020 are In Rem as it is directed towards all employers and not specific towards certain employers only. The is unlike the SC orders in a batch of petitions dated 15.05.2020 where the Court order was silent on whether its direction was In Rem or In Personem especially since it granted this relief in 2 petitions and denied this relief in 13 petitions.


Nilufer Bhateja, Editorial Assistant has put this story together

[1] https://csharyana.gov.in/WriteReadData/Notifications%20&%20Orders/COVID-1910920.pdf

[2] https://main.sci.gov.in/supremecourt/2020/10983/10983_2020_31_25_22066_Order_15-May-2020.pdf

[3] https://main.sci.gov.in/supremecourt/2020/11193/11193_2020_31_9_22066_Order_15-May-2020.pdf

[4] https://main.sci.gov.in/supremecourt/2020/11281/11281_2020_31_20_22066_Order_15-May-2020.pdf

[5] http://csharyana.gov.in/WriteReadData/Notifications%20&%20Orders/COVID-19/10920.pdf

[6](1997) 11 SC 641

[7] Ficus Pax Private Limited v. Union of India, WRIT PETITION (C) DIARY No. 10983 OF 2020, order dated 12.06.2020

[8] http://www.scconline.com/DocumentLink/ct1OgF15

[9] https://www.scconline.com/blog/post/2020/06/05/covid-19-no-coercive-action-till-june-12-against-employers-for-non-payment-of-full-wages/

[10] https://www.scconline.com/blog/post/2020/06/12/covid-19-sc-asks-employers-and-workers-to-reach-settlement-in-dispute-regarding-payment-of-wages-for-lockdown-period/

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