Payment of Wages
Payment of Wages
Litigation News

No coercive action against Punjab association for failing to pay employee wages during COVID-19 lockdown till next week: Supreme Court

Debayan Roy

The Supreme Court today ordered that no coercive action will be taken against an association of 52 companies in Punjab for failing to comply with the Ministry of Home Affairs (MHA) notification compelling payment of wages to workers during the COVID-19 lockdown.

The three-judge Bench of Justices L Nageswara Rao, SK Kaul and BR Gavai was hearing a batch of petitions seeking to quash the government notification directing that if workers were not paid, employers could be prosecuted.

Senior Advocate Jamshed Cama, appearing for Punjab-based Hand Tools Manufacturer Association today, argued,

"Companies are going out of work....they are being prosecuted. All I am saying is if the government wants further time, then the government must hold its hand."

The Bench asked,

"How long can the government expect companies to pay?"

At this point, Cama urged that no coercive action be taken against the association for non-payment of wages.

The Bench obliged, and also asked states to not prosecute private firms, factories etc over non-payment of wages to workers. This, after Solicitor General Tushar Mehta sought more time to file reply in this case.

The plea by Hand Tools Manufacturer Association was filed on May 7 by Advocate-on-Record Kishan Kumar and drawn by Advocate Abhay Nevagi. The association has around 52 members, including sole proprietorship firms, partnership firms and private limited companies engaged in the manufacture and distribution of hand tools.

The association 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 has 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.”

The plea further states that the existence of the power under Section 10(2)(l) of the Disaster Management Act to treat all private establishments at par by passing a blanket direction to pay full salaries against no work is manifestly arbitrary and therefore, violative of Article 14 of the Constitution.

On April 27, the Supreme Court, while hearing another similar plea by Ficus Pax Ltd. had granted the Centre two weeks' time to put its "policy on record" regarding the MHA notifications directing payment of full salaries to employees during the COVID-19 lockdown.


MHA Notification - Hand Tool Petiton.pdf


Hand Tools association order on payment of wages.pdf
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