Case BriefsHigh Courts

Bombay High Court: A Division Bench of Ujjal Bhuyan and Riyaz I. Chagla, JJ., rejected the relief of payment of full wages to the petitioner employees union holding that there case is not covered by the March 29th Order of the Central Government directing all establishments to pay full wages to employees during the period of lockdown due to COVID-19.

Premier Union Employees had approached the Court seeking direction to the State of Maharashtra and Commissioner of labour to ensure that workers of Premier Limited are pid wages for the duration of the lockdown in terms of Ministry of Home Affairs order dated 29th March, 2020, order of Department of Industries, Energy and Labour, Government of Maharashtra dated 31.03.2020; and order dated 20.03.2020 passed by the Industrial Court, Maharashtra at Pune.

Appropriate proceedings to be initiated against Premier Limited under Disaster Management Act for failure to comply with government orders.

On the other hand, Premier Limited assails the legality and correctness of the Order passed by the Industrial Court.

Union has raised grievance of unfair labour practice against the company. Complaint pertaining to the said grievance was registered at the Industrial Court.

Company obtained No Objection Certificate (NOC) from the office of Commissioner of Labour for shifting its plant, NOC was conditional in as much as the company had to give an undertaking that it would make full payment of wages and dues to the workmen and ensure continuity of their employment.

However, the company defaulted and has not paid wages and dues to the workmen since May, 2019.

Thus, Union in view of the above filed a petition before the Court seeking a direction to the State and Commissioner of Labour for cancellation of the NOC, both the matters are pending with no orders passed thereon.

On 3rd March, 2020, company had issued a notice addressed to all the workmen and staff stating that the management had decided to suspend operations with immediate effect. In response to this notice, Union raised the grievance of unfair labour practice and filed a complaint.

Industrial Court directed the company to pay wages to the workmen w.e.f. 01.03.2020 on or before the tenth day of each month.

Despite the above order, no payment has been made to the workmen.

Ministry of Home Affairs order dated 29-03-2020:

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

Government of Maharashtra in the Industries, Energy and Labour Department issued a government resolution dated 31.03.2020 declaring that all the workers / employees including contractual, temporary and daily wagers working in private establishments, shops (except essential services), factories etc., who had to remain indoors due to outbreak of COVID-19 and the lockdown, shall be deemed to be on duty and shall be paid full salary / wages and allowances.

On 2nd June, 2020, this Court had directed the company to comply with the Order of the Industrial Court, to which company filed a petition with regard to the legality and validity of the Industrial Court’s Order.

Company alleged that the union had adopted an obstructionist approach leading to the company losing many precious orders thereby causing substantial loss. This prevented payment of salary / wages to the employees and workers on regular basis post May, 2019.

Due to the stated circumstances, company had to suspend all its operations.

Analysis & Decision

A conjoint reading of the central government order and the Maharashtra government resolution would go to show that those have been issued to meet the situation arising out of the COVID-19 lockdown.

Question to be addressed is:

Could the central government order and the Maharashtra government resolution be invoked in a situation where the management and workmen are engaged in an industrial adjudication relating to non-payment of salary / wages and suspension of work much prior to closure of the establishments due to the lockdown?

Or where the related cause of action arose prior to the lockdown?

In Court’s opinion, the claim of the workmen to wages will not be covered by the central government order and the Maharashtra government resolution.

Adding the reasoning to its’ conclusion, bench stated that measures introduced by the above two would cover a situation where an employee / worker was in employment as on the day the lockdown was declared and had received salary / wages for the previous month i.e., the month immediately preceding the lockdown.

The said  measure was introduced to ensure maintenance of status quo with regard to payment of salary / wages and employment.

Industrial Court’s Order

Industrial Court noted that a prima facie case for interim relief was made out by the union. It was further observed that if the management was not directed to pay wages, members of the union would suffer hardship and inconvenience.

Since according to the Industrial Court, complainant had made out a strong prima facie case, interim direction was issued to the management to pay wages to the workmen from 01.03.2020 onwards till final disposal of the complaint.

In Courts opinion, the above view of Industrial Court was found to be contradictory and therefore, High Court held that, in the interest of justice it would be just and proper if a direction is issued to the management to pay 50% of the full monthly wages to the workmen with effect from 01-03-2020 till disposal of Complaint (ULP) No.32 of 2020.

Industrial Court is directed to complete the adjudication process within a period of six months.

In the above view, petitions were been disposed off. [Premier Employees Union v. State of Maharashtra, 2020 SCC OnLine Bom 794 , decided on 13-07-2020]

Case BriefsCOVID 19Supreme Court

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?

Case BriefsCOVID 19Supreme Court

Supreme Court: The 3-judge bench of Ashok Bhushan, Sanjay Kishan Kaul and MR Shah, JJ has extended the interim relief 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.

Listing the matter on June 12, the Court directed,

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

This order also clears the air on the confusion created by the May 15 orders in about 15 petitions where the Court, granted interim relief in two of the petitions, namely, by Hand Tools Manufacturers Association and Indian Jute Mills Association [WP (Civil) Diary No(s). 11281/2020] and directed that “no coercive action shall be taken in the meantime”. However, no such relief was granted to other petitioners like Ficus Pax Private Limited [WP (CIVIL) Diary No(s). 10983/2020], Ludhiana Hand Tools Association [WP (Civil) Diary No(s). 10993/2020], Twin City Industrial Employers Association [WP(Civil) Diary No(s). 11018/2020], etc.

The May 15 orders in all 15 matters were silent on whether the direction is In Rem or In Personem especially since the Court granted this relief in 2 petitions and denied this relief in 13 petitions. The direction of granting relief in 2 matters simply stated:

“No coercive action shall be taken in the meanwhile.”

The direction in the present order, the Court has clearly mentioned the term ’employers’ and it is safe to say that the said order extends to all employers.

[Ficus Pax Private Limited v. Union of India, 2020 SCC OnLine SC 481 , order dated 04.06.2020]


Also read:

MHA order dated 29.03.2020

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?

 

Case BriefsCOVID 19Supreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao, Sanjay Kishan Kaul and BR Gavai, JJ has issued notice in a number 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 notice is returnable next week.

The Court, granted interim relief in two of the petitions, namely, by Hand Tools Manufacturers Association and Indian Jute Mills Association [WP (Civil) Diary No(s). 11281/2020] and directed that “no coercive action shall be taken in the meantime”. However, no such relief was granted to other petitioners like Ficus Pax Private Limited [WP (CIVIL) Diary No(s). 10983/2020], Ludhiana Hand Tools Association [WP (Civil) Diary No(s). 10993/2020], Twin City Industrial Employers Association [WP(Civil) Diary No(s). 11018/2020], etc.

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.”

Hand Tools Manufacturers Association’s case

Hand Tools Manufacturers Association is an association formed and registered under Societies Registration Act, 1860 and as amended by Punjab Amendment Act, 1957. Petitioner comprises of around 52 members, which constitutes of sole proprietorship firms, partnership firms and private limited companies engaged in the manufacturing and distribution of the hand tools.

It has challenged the order on the ground of it being,

“illegal, violative of law, impossible to implement and have a cascading effect which may lead to winding up, closure or shut down of various industrial establishments, factories etc. rendering the workers, employees and other ancillary staff as unemployed.”

The petition also states,

“when hundreds of Crores of unclaimed provident fund and Employees State Insurance Corporation contribution lies in banks attracting interest and Government of India is enjoying benefit out it, Government of India completely erred in directing the private establishments to pay full wages, instead of using this contribution of the industry towards the welfare of workers/employees, and therefore, arbitrary and unreasonable.”

The Association, apart from seeking a direction to quash the impugned MHA order, has prayed before the Court that Section 10(2)(I) of the Disaster Management Act, 2005, in the event that the same are interpreted as conferring power on the Central Government, to direct private establishments to make full payments of wages to the employees during the lock-down period, be declared as illegal, arbitrary and violative of Articles 14, 19(1)(g), and 300A of the Constitution. It also sought a stay on the operations of the Impugned MHA order till the final disposal of the case before the Supreme Court.

[Hand Tools Manufacturers Association v. Union of India, WRIT PETITION (CIVIL) Diary No(s). 11193/2020, order dated 15.05.2020]


Click here to read the MHA order dated 29.03.2020

Case BriefsCOVID 19High Courts

Delhi High Court: A Division Bench of D.N. Patel, CJ and C. Harishankar, J., addressed a petition wherein mandamus has been sought to shut the Public Sector Undertakings/Public Enterprises in view of the COVID-19 lockdown.  

Petitioner states that by allowing their offices to function, public sector enterprises engaged in “non-essential goods and services” such as Steel Authority of India (SAIL), National Buildings Construction Corporation (India) Ltd (NBCC), Engineers India Ltd (EIL), Indian Railways Construction International Ltd (IRCON) and the Rail India Technical and Economic Service (RITES), have breached  the Ministry of Home Affairs Order dated 15-04-2020.

Thus, in view of the breach, petitioner sought criminal proceedings to be initiated for the heads of such Public Enterprises/Government Companies.

Petitioner states that such disobedience by PSUs of lockdown directives issued by Centre could not be tolerated for an instant.

Adding to his submissions he stated that PSUs which operate with a motive to profit and are purely commercial enterprises could not be treated as “offices under the control of” the Government so as to be entitled to the benefit of Clause 18 (ii) of the MHA Order dated 15-04-2020.

The “control” exercised, by the Government, over such undertakings, was merely owing to the majority Governmental shareholding therein.

Bench on perusal of the submissions stated that,

It is a matter of public knowledge that the decision, regarding the establishments, offices and enterprises, which ought to be extended some relaxation, from the rigour of the lockdown, is a decision taken after days of deliberation, involving pan-India consultations at the highest levels of the Central government as well as the governments of the States and UTs, aimed at safeguarding and promoting national interest, irrespective of considerations of caste, creed or political affiliations.

“…continuing to exercise judicial vigil over the acts of the executive, Courts have, in times such as these, necessarily to take care that, in doing so, they do not rock the boat, ending up doing more harm than good.

Bench on referring to the Office Memorandum dated 16th April, 2020 issued by DPE wherein it was requested that PSUs be instructed to comply with MHA Order dated 15th April, 2020, stated that in Court’s opinion the MHA order did not contemplate complete closure of all PSUs.

further the Bench added to its opinion with regard to interpretation of the “offices under control” of government stated that,

“…while interpreting Clause 18 ii) of the guidelines dated 15th April, 2020. Governmental control, over their affairs, unquestionably exists and that, in our view, is enough, for PSUs to regard themselves as officers under the control of the Government.”

The fact that PSUs named in the present petition are engaged in production of goods & services that impact the lives of citizens cannot be ignored.

In the exercise of the power of judicial review vested with the Court, it is not permissible for the Court to rewrite the MHA issued guidelines by introducing any consideration of the “essential” or non-essential” nature of services.

“…goods produced, and services rendered, by public Sector undertakings are all, to one extent or the other, “essential.”

It is also to be noted that allowing of “select additional activities” is intended “to mitigate the hardship to the “public”.

Bench also observed that

“It is entirely within the realm of the executive, seized with the crisis and the necessity of tiding over it in the best possible manner, to take a decision regarding the establishments which may be permitted to function, and to the extent thereof.”

Thus, any hyper-legalistic interpretation of the various Clauses in the Guidelines issued by the Central Government to tide over the COVID-19 crisis, would be fundamentally misconceived.

Hence, in the above-view petition stands dismissed. [Anil K. Aggarwal v. Union of India, 2020 SCC OnLine Del 576, decided on 01-05-2020]