[Breaking] Payment of Wages amid COVID-19: "No industry can survive without workers", Supreme Court asks employers, employees to negotiate
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[Breaking] Payment of Wages amid COVID-19: "No industry can survive without workers", Supreme Court asks employers, employees to negotiate

Debayan Roy

The Supreme Court today asked employers and employees to negotiate and settle between themselves issues relating to payment of wages amid the COVID-19 lockdown.

In the meanwhile, the Court's earlier order directing that no coercive action be taken against employers with respect to the March 29 notification of the Ministry of Home Affairs (MHA) compelling payment of wages, will continue to operate.

The order was passed by a Bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah.

Dictating the order, Justice Bhushan said that all issues raised by the petitioners have to be decided together, and not in a piecemeal manner. He went on to say,

"No industry can survive without the workers. Thus employers and employee need to negotiate and settle among themselves. If they are not able to settle it among themselves, they need to approach the concerned labour authorities to sort the issues out..."

Justice Ashok Bhushan

The employers and employees are thus directed to work out whether salary can be paid for 54 days of the COVID-19 lockdown. Such a settlement ought to be without prejudice to the rights of the employers and employees, the Court further said.

It cannot be disputed that both Industry and Labourers need each other. No Industry or establishment can survive without employees /labourers and vice versa. We are thus of the opinion 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

reads SC order

The top court in it's order has also noted that while some employers will be able to pay employees whereas some may not be able to, thus, a balance was needed to struck among these "competitive claims."

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. A balance has to be struck between these two competitive claims

says the SC order

The Court also stated that those employers/industries which were working at limited capacity during the lockdown can also enter negotiation. Employees can be allowed to come back to work without prejudice to the ongoing negotiation, it was clarified.

The MHA is now required to file a detailed affidavit on the legality of the March 29 notification by the end of July. The matter will be heard next in the last week of July.

The three-judge Bench reserved its orders on June 4, while directing that no coercive action be taken against employers with respect to the MHA notification.

The Court was hearing a number of petitions including the one filed by Karnataka-based company Ficus Pax, challenging the constitutional validity of the March 20 notification of 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 MHA order of March 29 had said 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 workplaces, on the due date, without any deduction, for the period their establishments are under closure during the lockdown."

Before the Supreme Court, the MHA had submitted that the March 29 notification was a temporary measure for 54 days.

Attorney General for India KK Venugopal, appearing for the MHA, said,

"...people were migrating in crores, they wanted the industries to continue. The notification was to stop the workers which they only would if they are paid."

Advocate Jeetender Gupta, appearing for Ficus Pax, had argued that the Labour Ministry's advisory asking establishments not to terminate employees or reduce their salaries, was not passed under the Disaster Management Act.

Claiming that the company he represents carried out essential services, Gupta said that all in-house workers have been paid salaries.

"...but why should I pay the 800 contract workers when no work is happening? There is a separate ESI fund which has 80,000 to 90,000 crores as surplus fund.

Some of the other petitions were by Punjab-based Ludhiana Hand Tools Association, and Advocate Aditya Giri.

Ludhiana Hand Tools Association, through Advocate-on-Record Rajeev M Roy, stated that the March 29 MHA order was violative of Articles 14, 19(1)(g), 265 and 300 of the Constitution, and thus must be “struck down.”

Senior Advocate Indira Jaising, appearing in one of the cases, said that the MHA’s direction should not be quashed and that workers needed to be paid full wages for the period of the lockdown.

Jaising had primarily argued that the principle of no work no pay is not applicable in the present circumstances, especially when there is lockdown, as the workers cannot work even if they want to.

[READ ORDER]

SC_Ficus_Judgement_12-Jun-2020.pdf
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