Exemption from Payment of Wages
Exemption from Payment of Wages
Litigation News

“Govt has not taken any steps for workforce instead put the burden on employers to pay full wages” Petition in SC to set aside MHA Order

Plea says organizations should be completely exempted from paying its workmen during the lockdown as “one-sided implementation of contract alone is not permitted"

Debayan Roy

After Mumbai-based textile firm, a Punjab-based collective of 41 small scale organizations including sole proprietorship and partnership-based firms have moved Supreme Court to set aside March 29 order of the Ministry of Home Affairs (MHA) directing private establishments to pay full wages to workers during the period of COVID-19 lockdown.

The plea also challenges the constitutional validity of Section 10(2)(i) of the Disaster Management Act, 2005

Section 10 (2) (i)
Section 10 (2) (i)

Punjab-based Ludhiana Hand Tools Association through Advocate on Record Rajeev M. Roy in a writ petition under Article 32 of the Indian constitution has stated that the March 29 MHA order under the Disaster Management Act, 2005 is violative of Articles 14, 19(1)(g), 265 and 300, of the Constitution and that it must be “struck down.”

The plea drawn and settled by Advocate Abhay Nevagi states that Section 25M of the Industrial Disputes Act provides for the right to layoff workmen due to natural calamity.

Thus, the plea makes a case that an order under the Disaster Management Act cannot take it away and therefore, the provisions of the Disaster Management Act, 2005 cannot “impinge upon express provisions of the Industrial Disputes Act, 1947 and take away the right to layoff workmen during times of natural calamity under the Disaster Management Act is contrary to law”.

The petitioner has contended that organisations should be completely exempted from paying its workmen during the lockdown implemented in the wake of novel coronavirus pandemic as “one-sided implementation of contract alone is not permitted since relationship between employer and employee consists of reciprocal promises wherein payment can be enforced only against consideration of performing work.”

The plea before the Supreme Court also takes note of a press release issued by Government of Punjab on April 14 stating that Capt. Amarinder Singh, Chief Minister of Punjab informed Prime Minister Narendra Modi by a letter “seeking reconsideration of Government Order directing payment of full wages to workers as it will lead to bankruptcy of such organisations.”

The petitioner organisation has drawn up a case that when during this unprecedented situation of COVID-19, various governments of different countries across the globe are taking measures for the workers/employees, “Government of India has not taken any steps for the workforce and instead put entire burden on the employers/owners to pay full wages.”

Attacking the legislative competence of the centre, the petitioner states that the Central Government under section 10(2)(i) of the Disaster Management Act, 2005 lacks the legislative competence to direct private establishments to pay full wages to their workforce.

The employers organisation submits that the existence of power under Section 10(2)(i) of the Disaster Management Act to treat all private establishments at par by “passing a blanket direction of payment of full salaries against no work" is manifestly arbitrary and therefore, violative of Article 14 of the Constitution.

Further the plea also states that it is implicit in the fundamental right of an employer to trade or business that there is an obligation to pay when work is actually done and there is no obligation if no work is done.

An employer and employee have reciprocal promises whereby the right of an employee to demand salary is reciprocal to performance of work by such employee. The employer has a right to not pay if no work is done

says the plea

A Mumbai-based textile company Nagreeka Exports Limited has also filed a plea in the Supreme Court challenging the constitutional validity of orders passed by the MHA and the Maharashtra government ordering payment of salaries to workers amid the COVID-19 lockdown.

[READ PETITION]

Ludhiana Hand Tools Association Petition.pdf
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