- Amid the Covid-19 pandemic, the Ministry of Home Affairs (“MHA”), in exercise of powers conferred under section 10(2)(l) of the Disaster Management Act, had issued an order dated March 29, 2020[i], whereby it was directed that “All the employers, be it in the Industry or in the shops and commercial establishments, shall make payments of wages of their workers, at their work places, on the due date, without any deduction, for the period their establishments are under closure during the lockdown”, (hereinafter referred to as “MHA Order”). Thus, under the MHA Order all the employers were required to make full payment of wages, without making any deductions, to their employees during the period of the lockdown.
Aggrieved by the MHA Order, employers of various establishments filed petitions with the Hon’ble Supreme Court challenging the constitutional validity of the MHA Order on the grounds of arbitrariness, unreasonableness and violation of the provisions of law including the violation of fundamental rights guaranteed under Article 14 and Article 19(1)(g) of the Constitution of India. Parallelly, petitions were also being filed by the employees of various establishments seeking implementation of the MHA Order and demanding payment of wages by the employers for the lockdown period.
On May 15, 2020, while hearing these petitions, the Hon’ble Supreme Court issued notice and further, in the case of Hand Tools Manufacturers Association v. Union of India & Ors.[ii] and Indian Jute Mills Association & Anr., v. Union of India & Ors.[iii] , directed that no coercive action shall be taken against any employer, by virtue of the MHA Order. A similar order was passed by the Hon’ble Supreme Court on June 4, 2020, in the case of Ficus Pax Private Limited v. Union of India & Ors.[iv] (2020 SCC OnLine SC 481) and after the conclusion of arguments, the cases were listed on June 12, 2020 for further orders.
Thereafter, the MHA issued another Notification dated May 17, 2020[v], stating that the order issued by MHA Order, shall cease to have effect from May 18, 2020. Thus, the MHA Order, was revoked by the MHA with effect from May 18, 2020. Consequently, the MHA Order was effectively in force for a period of 50 days prior to its revocation on May 18, 2020.
Finally, on June 12, 2020 the Hon’ble Supreme Court in the case of Ficus Pax Private Limited v. Union of India & Ors.[vi] (2020 SCC OnLine SC 503), observed that by virtue of the MHA Notification dated May 17, 2020, the MHA Order demanding the payment of full wages by the employers to their employees during the period of lockdown is no longer in force and thus, the issue is with respect to the payment of wages for the period during which the MHA Order was in force (i.e. a period of 50 days). While dealing with this issue, the Hon’ble Supreme Court observed that survival of any industry or establishment is not possible without the employees and vice versa. Thus, the employers and employee should try to negotiate and settle the dispute, regarding the payment of wages for the period during which the MHA Order was in force, among themselves.
The Hon’ble Supreme Court directed that the following interim measures can be taken into consideration while arriving at a settlement: –
- The employers who are willing to enter into negotiation and settlement with the employees regarding payment of wages for the above-mentioned period can initiate a process of negotiation with their employees and enter into a settlement with them. In case they are unable to settle by themselves, they can submit a request to concerned labour authorities to facilitate the negotiation and settlement. Further, if they arrive at a settlement, the same can be acted upon by the employers and employees irrespective of the MHA Order.
- The above-mentioned measures can be taken by employers of those establishments which were operating during the lockdown period, though not up to their full capacity.
- The employees who are willing to work, shall be permitted to work in the establishments without prejudice to their rights regarding unpaid wages of above-mentioned period.
- The establishments who undertake steps for negotiations shall publicise and communicate their steps to the employees to ensure their response and participation.
- The Central Government, all the States/UTs through their Ministry of Labour shall circulate and publicise this order for the benefit of all establishment, employers and employees.
The Hon’ble Supreme Court further directed that if any settlement is arrived between the employees and employers whose cases are pending before this court, then they shall submit an affidavit giving the details of the same, before the next date of hearing in order to bring the same on record. The matter is tentatively listed for last week of July.
“The views of the authors are personal“
[i] Notification No. 40-3/2020-DM-I(A), dated March 29,2020
[ii] Hand Tools Manufacturers Association v. Union of India & Ors., Writ Petition (Civil) Diary No. 11193/2020
[iii] Indian Jute Mills Association & Anr., v. Union of India & Ors., W.P. (Civil) Diary No. 11281/2020
[iv] Ficus Pax Private Limited v. Union of India & Ors., W.P. (Civil) Diary No. 10983/2020; 2020 SCC OnLine SC 481
[v] Notification No. 40-3/2020-DM-I(A), dated May 17,2020
[vi] Ficus Pax Private Limited v. Union of India & Ors., W.P. (Civil) Diary No. 10983/2020; 2020 SCC OnLine SC 503