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

Supreme Court issues Notice in Plea seeking exemption from Paying Wages to Workers who voluntarily stopped reporting to work

The plea seeks an exemption to not pay those workers who voluntarily stopped reporting to work due to the COVID-19 situation.

Debayan Roy

The Supreme Court has issued notice to the Union government on a petition by a Rajasthan-based company seeking to strike down the two government notifications compelling employers to pay full wages to workers during lockdown.

Bench of Justices Ashok Bhushan, SK Kaul and BR Gavai heard petitioner, Teknomin Construction Limited, represented by Advocate Jeetender Gupta, who had challenged an advisory dated March 20 issued by the Ministry of Labour & Employment and a 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 workplaces, 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.

Advocate Gupta stated that the Court has to clarify that MHA Orders should not apply to establishments which are operational and where workers are not voluntarily reporting to work.

Apart from the Teknomin case, Garment exports manufacturing and two other garment associations also filed a plea challenging the March 29 MHA order for being unconstitutional.

The plea argued by Senior Advocate Vikas Singh and drawn by Advocate Varun Singh cited before the court that the garment exports sector had borne the first effect of financial instability due to COVID-19 as most foreign contracting parties in the US and Europe had closed down even before India went into the lockdown mode.

The three judge bench of the Supreme Court issued notice in this matter too and clubbed it for hearing with other similar matters on May 15.

In the same hearing, another petition filed by 11 MSMEs in Haryana, Instruments and Chemicals Private Limited, seeking the same relief was tagged with the ‘Ficus Pax’ case

While hearing the Ficus Pax case on April 27, Justice NV Ramana led bench had granted the Centre two weeks' time to put its "policy on record" regarding the Ministry of Home Affairs (MHA) notifications directing payment of full salaries to employees during the COVID-19 lockdown.

All the matters, now challenging the MHA order or seeking an exemption from paying wages to employees during lockdown period will be heard on May 15.

The Rajasthan-based company contended that the 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 are engaged as work contractors for the mine development and production mines for companies such as M/s Hindustan Zinc Limited.

The plea states that the petitioner had engaged 1704 workers for execution of work contracts for four mine locations in the State of Rajasthan. “All these work contracts were stopped due to COVID – 19 lockdown,” the plea informs.

Further, the plea cites the hardship faced by them to continue operations.

In accordance with the exemption categories notified by the Ministry of Home Affairs time to time, Hindustan Zinc Limited applied to the District administration for requisite permission which were accordingly received between March 30 to April 19 for all four mining sites.

However, many of the workers employed by the Petitioner are not reporting to work hoping that they will continue to get wages for lockdown period in terms of impugned notifications irrespective of whether they resume their working or not.

Petition

However, many of the workers employed by the Petitioner are not reporting to work hoping that they will continue to get wages for lockdown period in terms of impugned notifications irrespective of whether they resume their working or not.

Substantiating the prayer to strike down the two notifications as ultra vires the Constitution, the plea states that “impugned notifications do not differentiate between the workers who report to work and the workers who refuse to work, when it comes to entitlement for wages for lockdown period as concerned, thereby being contrary to the principle of “Equal Work Equal Pay”.

Now, all the petitions relating to payment of wages to workers are listed on May 15.

[READ ORDERS]

Rajasthan Industry group (Order Part 1).pdf
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Teknomin Order 2.pdf
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Garments sector order.pdf
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