Payment of Wages - MHA
Payment of Wages - MHA
Litigation News

Employers not willing to pay wages during Lockdown cannot cite financial incapacity to challenge Govt Notification: MHA tells Supreme Court

"Financial incapacity is a legally untenable ground to challenge a direction issued by a competent authority in the exercise of its statutory power", states the MHA's reply.

Debayan Roy

The Union Ministry of Home Affairs (MHA) has informed the Supreme Court that "financial incapacity" of an employer to pay his employee is a not a legally tenable ground to challenge its March 29 notification directing to pay employee wages during the COVID-19 lockdown even if no work was done.

The reply from the MHA came on a batch of petitions led by a Karnataka-based company, Ficus Pax, who had challenged the Constitutionality of the March 29 notification as arbitrary and unreasonable.

In its writ petition before the Supreme Court, Ficus Pax has challenged the Constitutional validity of a March 20 notification issued by the Union Labourt Department and Clause III of the March 29 MHA notification. These notifications effectively compelled the payment of full wages to workers and employees during the period of the lockdown.

The petitioner company, through Advocate on Record, Jeetender Gupta, has submitted in the plea 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.”

The MHA has now termed the grounds for the challenge as legally untenable and urged the Court not to adjudicate the validity of the March 29 notification. In this regard, the MHA's reply reads,

"The ground for challenging the March 29 notification by the employers is primarily financial hardship, lack of desire or incapacity of the employers to pay the workers during lockdown without taking work from them. Financial incapacity is a legally untenable ground to challenge a direction issued by a competent authority in exercise of its statutory power."

The Centre maintains that the Government's directions were a temporary measure to "mitigate the financial hardship of the employees and workers specially contractual and casual during the lockdown period."

"The directions to employers were as an economic and welfare measure and benevolence of the object sought to be achieved through such directs is writ large on the face of such directions," says the MHA.

The government has also highlights that this temporary measure lasted for only 54 days. By a notification issued on May 17, it was ensured that employers were able to resume work so that the burden of paying salary without work is mitigated, it is pointed out.

As such, the MHA adds that "it would not be proper to adjudicate in the interest of justice the validity of the notification which stayed in operation for only 54 days."

The Centre has also stated that no material was placed on record to show that the employers are not in a position to pay the workers.

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