North Block - Home Ministry
North Block - Home Ministry
Law & Policy News

Home Ministry ceases all previous orders: No more compulsory payment of wages

Pallavi Saluja

The Ministry of Home Affairs (MHA), Government of India has issued an order providing for certain relaxations and guidelines with respect to the fourth phase of the COVID-19 lockdown, which will be in effect till May 31, 2020.

Through the order issued on May 17, the MHA has ceased all its previous orders, including the March 29 order that mandated payment of wages to employees during the lockdown period.

MHA Notification of March 29
MHA Notification of March 29

The May 17 Order states,

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

Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre.

Therefore, State Governments may enact separate rules if it intends to compel employers to pay during the Covid period.

"As per the latest MHA Order dated May 17, the MHA has stated that it's previous orders of lockdown and lockdown measures will cease to have effect from May 18, 2020. This would mean that the restrictions on termination of employment and salary reductions imposed by the MHA Order dated March 29, 2020 will no longer be applicable. Any such action would need be in accordance with applicable labour laws.
Pooja Ramchandani

Speaking to Bar & Bench on this development, Shardul Amarchand Mangaldas Employment Practice Head and Partner Pooja Ramchandani said:

"As per the latest MHA Order dated May 17, the MHA has stated that it's previous orders of lockdown and lockdown measures will cease to have effect from May 18, 2020. This would mean that the restrictions on termination of employment and salary reductions imposed by the MHA Order dated March 29, 2020 will no longer be applicable. Any such action would need be in accordance with applicable labour laws.

However, for the period prior, unless the Supreme Court decides otherwise, the MHA Order of March 29 would be applicable to those establishments that were under closure during lockdown."

Pooja Ramchandani
Pooja Ramchandani

She added,

"It is also pertinent to mention that the previous SOPs are now replaced by the new lockdown guidelines issued by the May 17 Order of MHA. Therefore, medical insurance is no longer mandatory and the obligation of employers to ensure installation of Arogya Setu app is on a best effort basis only."

As soon as the March 29 MHA notification came out, it was challenged in several petitions filed before the Supreme Court. The lead petitioner in the case is Ficus Pax, represented by Advocate-on-Record Jeetender Gupta.

The Karnataka-based company had challenged the constitutional validity of a March 20 notification by the Secretary (Labour & Employment) and clause III of the March 29 notification by the MHA, both of which compelled payment of full wages to workers and employees during the period of lockdown.

The petitioner company had submitted that these two notifications were “arbitrary, illegal, irrational, unreasonable and contrary to the provisions of law including Article 14 and Article 19(1)(g) of the Constitution of India.”

Nagreeka Exports Limited was the first petition to be filed challenging the constitutional validity of MHA Order. The petition was drawn by Advocate Abhay Nevagi, which was later withdrawn. Though another petition was filed by Ludhiana Hand Tools (drawn by Negi), which is tagged along with other petitions.

The petitions were listed for hearing on May 15, when the Government of India sought some more time to file its response.

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