COVID-19| SC asks employers and workers to reach settlement in dispute regarding payment of wages for lockdown period

Supreme Court: In the batch of petitions challenging clause (iii) of the Ministry of Home Affairs order dated March 29, 2020 directing the industries, shops and commercial establishments to pay full salary/wages to all its staff, workers, contract workers, casual workers during the period of lockdown, the 3-judge bench of Ashok Bhushan, SK Kaul and MR Shah, JJ has 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.”

MHA Order dated 29.03.2020

The said order issued after a large number of migrant workers had started marching towards their hometowns amidst Coronavirus Lockdown. It lays down directions for adequate arrangements of food and shelter for migrant workers. It also directs the landlords to not demand the payment of rent from migrant workers.

However, only Clause (iii) of the impugned MHA order is under challenge in the present batch of petitions. The said clause reads:

“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 work places, on the due date, without any deduction, for the period their establishments are under closure during lockdown period.”

Ground for challenge

The petitioner’s case is that notifications are arbitrary, illegal, irrational and unreasonable and contrary to the provisions of law including Article 14, Article 19(1)(g). Notifications are unreasonable and arbitrary interference with the rights of petitioner Employers under Article 19(1)(g). Notifications are also contrary to the principles of Equal work Equal Pay and also No work No pay, for it does not differentiate between the workers who are working during the lockdown period in establishment such as the petitioner who have been permitted to operate during the lockdown period and the workers who had not worked at all.

The Home Secretary, Ministry of Home Affairs, Government of India, cannot invoke Section 10(2)(l) or any other provisions of Disaster Management Act, 2005, to impose financial obligations on the private sector such as payment of wages.

“The Central Government has the power to allocate funds for 6 emergency response, relief, rehabilitation, mitigation of disasters under Disaster Management Act. The ultimate onus for any compensation towards workers shall ultimately be of Government and the said liability cannot be shifted upon the employers in the Private establishment.”

Order of the Court

The Court noticed that all industries/establishments are of different nature and of different capacity, including financial capacity. Some of the industries and establishments may bear the financial burden of payment of wages or substantial wages during the lockdown period to its workers and employees. Some of them may not be able to bear the entire burden. Hence, a balance has to be struck between these two competitive claims.

i. The private establishment, industries, employers who are willing to enter into negotiation and settlement with the workers/employees regarding payment of wages for 50 days or for any other period as applicable in any particular State during which their industrial establishment was closed down due to lockdown, may initiate a process of negotiation with their employees organization and enter into a settlement with them and if they are unable to settle by themselves submit a request to concerned labour authorities who are entrusted with the obligation under the different statute to conciliate the dispute between the parties who on receiving such request, may call the concerned Employees Trade Union/workers Association/ workers to appear on a date for negotiation, conciliation and settlement. In event a settlement is arrived at, that may be acted upon by the employers and workers irrespective of the order dated 29.03.2020 issued by the Government of India, Ministry of Home Affairs.

ii. Those employers’ establishments, industries, factories which were working during the lockdown period although not to their capacity can also take steps as indicated in direction No.(i).

iii. The private establishments, industries, factories shall permit the workers/employees to work in their establishment who are willing to work which may be without prejudice to rights of the workers/employees regarding unpaid wages of above 50 days. The private establishments, factories who proceed to take steps as per directions (i) and (ii) shall publicise and communicate about their such steps to workers and employees for their response/participation. The settlement, if any, as indicated above shall be without prejudice to the rights of employers and employees which is pending adjudication in these writ petitions.

iv. The Central Government, all the States/UTs through their Ministry of Labour shall circulate and publicise this order for the benefit of all private establishment, employers, factories and workers/employees.

Union of India may file a detail counter affidavit for which the leave they have already prayed for in the common counter affidavit, within a period of four weeks. Rejoinder to which to be filed within a period of one week and all the matter to be listed again in last week of July,2020.

Continuation of order dated 04.06.2020

In our order dated 04.06.2020, the Court had directed,

 “In the meantime, no coercive action, against the employers shall be taken pursuant to notification dated 29.03.2020.”

The Court, in the present order, made it clear that the said order shall continue in all the matters.

[Ficus Pax Private Limited v. Union of India, 2020 SCC OnLine SC 503 , order dated 12.06.2020]


Also read:

MHA order dated 29.03.2020

No coercive action till June 12 against employers for non-payment of full wages

Order dated 15.05.2020 granting interim relief in Hand Tools Manufacturers Association’s case

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?

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