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?

 

COVID 19Hot Off The PressNews

What did Ministry of Home Affairs state in the May 17th, 2020 Order with regard to the ‘Payment of Wages’?

On 29th March, 2020, Ministry of Home and Affairs had issued an Order wherein additional measures to alleviate the hardships of migrant workers was the focus.

Following the above, National Executive Committee in exercise of its powers conferred under Section 10(2)(1) of Disaster Management Act, 2005, State/UTs were asked to issue necessary order and 5 additional measures were issued amongst which, following was with regard to payment of wages to workers,

All 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 the lockdown.

According to the said order, Employers were asked to may payment of wages without any deduction for the period of closure to the workers.

Whereas, according to the May 17, 2020 Order wherein the guidelines for Lockdown 4 has been issued, Ministry of Home Affairs has explicitly stated that the following:

“Whereas, save as otherwise provided in the guidelines annexed to this Order, all Orders issued by NEC under Section 10(2)(1) of the Disaster Management Act, 2005, shall cease to have effect from 18.05.2020”

According to the said statement, the measure regarding payment of wages by the employers without any deduction for the period of closure to the workers shall have a ceased effect which came into effect from 18th May, 2020.

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 BriefsHigh Courts

Bombay High Court: K.R. Shriram, J. dismissed an admiralty suit filed by the plaintiff insofar as he claimed wages under the provision of Section 129 of the Merchant Shipping Act, 1958.

The plaintiff was a seafarer and worked as Chief Engineer on board two shipping vessels — namely, Malaviya Thirty-Three and Bharati-S — both owned by GOI Offshore Ltd., which was under liquidation. According to him, wages which were due to him from working on both the vessels were not paid to him. He claimed the same under the present suit along with interest. The plaintiff further claimed wages under Section 129 of the Merchant Shipping Act.

Vikrant Shetty, counsel for the plaintiff, contended that Section 129 provides for time of payment of wages, and if the payment is not made within such time, the plaintiff is entitled for further payment of wages for the delayed period. Per contra, counsel for the defendant, S. Priya along with Aparna Sinha, did not dispute the plaintiff’s claim for the payment of wages payable for his employment on the two vessels. She, however, disputed the claim raised under Section 129.

The question before the Court was whether the plaintiff was entitled to approach the Court to claim the amount under Section 129 of the Merchant Shipping Act?

After discussing the provisions of Section 129 (time of payment of wages) and Section 132 (decision of questions by shipping masters), the High Court observed: “any claim for wages under Section 129 can be made only to the shipping master and if the shipping master passes an order within the limit of his jurisdiction, that could be enforced by a Judicial Magistrate of the first class or a Metropolitan Magistrate as provided in Section 132(3) as an order for payment of wages made by such Magistrate.”

It was noted that there are no averments in the plaint whatsoever as to how the plaintiff claims he is entitled to the amounts as claimed under Section 129 of the MS Act. Finally, it was held that since the jurisdiction is not with the High Court but only with the shipping master under Section 129, the Court could not determine the claim under Section 129. Therefore, the claim to such extent was rejected.[Jagdish Singh Bhaduria v. Bharati-S, 2019 SCC OnLine Bom 1179, decided on 05-07-2019]

Case BriefsHigh Courts

Jammu and Kashmir High Court: A Single Judge Bench comprising of Sanjeev Kumar, J., dismissed the current writ petition invoked for quashing the order of the district judge whereby the appeal of the petitioner was held as non maintainable and the order passed by the Assistant Labour Commissioner regarding the payment of wages to the employees was upheld.

The facts of the case are that a few employees had filed for payment of their withheld wages. The application was filed much after the period of limitation, prescribed under the Payment of Wages Act. The application was accompanied by an application for condonation of delay. The Assistant Labour Commissioner while exercising the discretionary powers allowed the condonation application. The petitioner thus filed an appeal which was dismissed. The impugned order dismissing the appeal was under question here.

The Court upholding the decision of the District Judge and Assistant Labour Commissioner said that condonation of the delay is a discretionary order and had been passed by the Authority after considering the stand taken by the rival parties. It has taken note of the social welfare nature of the legislation, i.e., the Payment of Wages Act, which is enacted for the benefit of workers who are denied wages for the work they render by the employer by misusing their higher bargaining powers and fiduciary relationship. The petition was thus dismissed. [Division Forest Officer, Bandipora v. Assistant Labour Commissioner,2018 SCC OnLine J&K 955, decided on 04-12-2018]