Case Law Details
Payment to labour during lockdown: SC on June 12 asks states to facilitate negotiations between employers & employees – no coercive action till end of July
A number of writs were filed in the apex court questioning the orders issued under Disaster Management Act, 2005 and consequential orders issued by different States that all industries or commercial establishments shall make payment of wages of their workers on the due date, without any deduction, for the period their establishments were under closure during the lockdown. The Orders of MHA in exercise of powers under Section 10(2)(1) of Disaster Management Act, 2005 & the vires of the said Section have also been challenged. It has also been pleaded to subsidise 70 to 80 percent of the wages for the lockdown period by utilising funds collected by Employee State Insurance Corporation or the PM Cares Fund or through any other Government funds/schemes. The order of the MHA has also been assailed as arbitrary, illegal, irrational and unreasonable and contrary to the provisions of law including Article 14 & Article 19(1)(g). It was also contended that the said Notifications are also contrary to the principles of Equal work-Equal Pay and also No work -No pay. The attention of the court was also invited to the plight of majority of employers who are financially not in position to maintain the employees and make full payments of wages to their workers for the lockdown period.
It was also contended on behalf of the petitioners that the employers should not be compelled to not only continue to retain their workers but also pay full wages at a time when the business is effectively closed and there is no income. Failure to comply for any reason, including the paucity of funds, would render them liable to prosecution. Such order was pleaded to be ex-facie arbitrary and unreasonable. Some of the petitioners have come forward with the prayer that they are ready to pay 50 percent wages during the said period. Some of the petitioners have also submitted that they are also negotiating with their workers regarding payment of wages during the period of lockdown and some of the workers have re-joined their work.
The Central government averred in the court that the impugned orders passed under Section 10(2)(1) of the Disaster Management Act, 2005, have been withdrawn w.e.f. 18.05.2020. It was also reiterated that the government had full authority to issue such directions and the measures taken by the Government of India were within its legislative competence. The prayer of the petitioner to utilise the ESIC fund was also refuted by the government.
On behalf of the government, it was reiterated that the directions are neither arbitrary nor capricious. The ground of financial hardship & incapacity which has been pleaded by the petitioner is legally untenable to challenge the direction issued by competent authority in exercise of statutory power. It was clarified that the Union of India issued the above directions as a temporary measure to mitigate the financial hardship of the employees and workers especially contractual and casual workers during the lockdown period. Moreover the impugned notifications have already outlived their lives and the adjudication of the same would only entail academic exercise.
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