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Allow us to pay workers 70% less during Lockdown, let Govt pay rest from PM CARES or other Funds: Plea in Supreme Court by 11 MSMEs

Debayan Roy

A group of 11 MSMEs (Micro, Small and Medium Enterprises) having at least one of their factories in Haryana have approached the Supreme Court to challenge Union Government advisories/orders compelling payment of full wages during the period of the COVID-19 lockdown.

In particular, the plea challenges the March 20 advisory by the Union Ministry of Labour and Employment and a March 29 order of the Ministry of Home affairs.

The petitioners represented by Advocate Jeetender Gupta contend that government should relieve the companies from paying 70% of the salary of each worker during the lockdown. It is added that the Government has to take up paying the 70% percent from the funds collected by the Employees' State Insurance Corporation (ESIC) or the PM Cares Fund or through any other Government Fund / Scheme.

The petitioners have challenged the March 20 advisory by the Ministry of Labour & Employment and the March 29 order of the Ministry of Home Affairs as violative of Articles 14 and 19(1)(g) of the Constitution of India.

The MHA order had stated that 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 the lockdown,” adding that States / UTs should take necessary action against any violation of the said Order.

The petitioners argue that they should be allowed to pay 70% less salary to employees and that the Government should take care of the rest.

"The government should be directed to subsidize the wages of workers to the tune of 70% for lockdown period by utilizing the funds collected by the Employees' State Insurance Corporation (ESIC) or the PM Cares Fund or through any other Government Fund / Scheme," reads the plea.

The group of 11 petitioner companies led by Instrument and Chemicals Pvt limited states that all the companies had paid wages to all its workers for March, 2020. The plea goes on to point out that their businesses have since come to a standstill.

"Business of the Petitioners has come to a standstill still due to lock down and on the other hand the Petitioners are being compelled under the Impugned Notifications to pay for the wages to workers for entire lockdown period. The Petitioners are being further restrained from reducing their workforce especially the casual or contract or migrant workers. The Petitioners are under extreme financial & mental stress because of the Impugned Notifications", reads the plea.

The plea further states that petitioners should be entitled to laying off and retrenching workers in terms of Sections 2(kkk), 2(oo) and Sections 25C to 25N of the Industrial Disputes Act. Act.

"As per Section 25M of I.D. Act there is no prohibition of layoff or a permission from the government, if such layoff is due to a natural calamity. Further, the Respondents cannot legally override the contracts between Employers and Contractors for contractual work," submits the petitioners.

The primary contention forwarded is that the obligation to pay salaries during lockdown is not on the employer but, rather, on the government.

"The two notifications are contrary to Article 300A of the Constitution of India as per which no person shall be deprived of his property save by the authority of law. However, by way of enforcement of Impugned Notifications, the Respondents are compelling Petitioner to meet out an expense which is otherwise the obligation of the Respondents and not that of the Petitioners," says the plea.

Read the Petition:

WPC - Instruments and Chemicals Ltd and Others vs UOI (Petition).pdf
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