Exemption from Payment of Wages
Exemption from Payment of Wages
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Supreme Court grants Centre two weeks to show how it will implement MHA order directing payment of full wages during COVID-19 lockdown

Debayan Roy

The Supreme Court today 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. (Nagreeka Exports Limited vs Union of India)

The Bench of Justices NV Ramana, Sanjay Kishan Kaul and BR Gavai passed the order while hearing a batch of petitions filed by private organisations challenging the MHA notifications directing employers to pay full wages during the lockdown, and to ensure that no employee is terminated.

The court in its order has stated that all the petitioners will "supply copies of their applications to the Solicitor General through e-mail."

The petitions were filed by Mumbai-based textile firm, Nagreeka Exports; Karnataka-based packaging company, Ficus Pax Private Limited; Punjab-based Ludhiana Hand Tools Association, and Advocate Aditya Giri.

Nagreeka Exports, the original petitioner, withdrew its petition stating that it wanted to avoid conflict of submissions, considering the number of pleas in the Apex Court on the same issue.

Ficus Pax, represented by Advocate-on-Record Jeetender Gupta, was the only party to argue before the Court today.

The Karnataka-based company 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.”

Ficus Pax had stated that before the lockdown, it had 176 permanent workers and 939 contract workers across all its factories/warehouses/offices and that it had “paid the wages to all workers including contractual workers for the month of March 2020.”

It was contended that these notifications can turn “an otherwise stable and solvent industrial establishment, especially an MSME establishment, into insolvency and loss of control of business.”

Ludhiana Hand Tools Association, through Advocate-on-Record Rajeev M Roy, 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 petitioner had contended that organisations should be completely exempted from paying their 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.”

Advocates Rajeev M Roy, Abhay Nevagi and Jamshed Cama appeared for the petitioners.

The PIL filed by Advocate Aditya Giri was tagged in this order along with other petitions. The plea sought the court to issue directions to both Central & State Governments to formulate a framework to deal with the problems faced by private sector employees, who have been suddenly laid off due to the lockdown.

Plea by Advocate Giri sought affixation of the liability & accountability of all stakeholders, including the employers for "their dereliction of duty and negligent role in failing to curb laying off of the employees" during this pandemic.

[READ THE ORDER]

Companies Challenge to MHA Order .pdf
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