On 08.05.2020, Supreme Court has denied any relief to MSME against Payment of Wages during Lockdown

Facts of the Case:

The Petition was filed by MSMEs challenging the Advisory Issues by the Union Ministry of Labour and Employment on March 20 and the order issued by the ministry of home affairs (MHA) on March 20 wherein it has specified that the “employers, be it in the industry or in the shops and commercial establishments,” will have to pay the wages of their workers without any delay and deductions for the period the establishments are under closure during the lockdown and any failure by them in implementation, action will be taken.

Status as on date:

The Supreme Court on 08.05.2020 turned down the plea of MSMEs (11 Haryana-based MSMEs) to provide interim protection against the order which required them to pay full salaries to its employees.

Concern:

There is no doubt that whatever steps were taken by the Respected Chaired Prime Minister, Shri Narendra D Modi in regard to COVID 19 is commendable and no doubt he has been working as a Strong Leader always since many years now and sure many more years to come. However, their minister sometimes takes such steps which results in a not bad but horrible situation, and in fact, the decision are so bad that it really gives a bad signal to business entities. There is no doubt that MSME is the backbone of Commerce which is often poorly heard and very poorly paid and is also the backbone of Industry in contributing to country s employment and various Taxes. One has to understand that to save the Indian economy one needs to save MSME and small business houses. There is also no doubt that prior to Lockdown, the economy was not in good shape but nothing taking away from the present Government of its brilliant intention of doing for future India. Post Demonetization along with many laws being enacted such as RERA, IBC, GST being a major one, the business has been at a low level in India and was waiting to see the change very soon and no doubt that MSME adapted to the new system and it was a matter of time that economy was coming to good shape and then came this Lockdown which has totally put an almost stop signal to MSME especially. There is no doubt of the contribution made and will always be made by MSME but at the same time, MSME does not find any support from at present Government or Courts.

Running a business in India with so many compliances, day to day change in laws, inspection by an officer already a big concern at any time, corruption (at least it has been reduced to good extend due to Prime Minister brilliant efforts but there are corruption still floating in the market in other ways) and Labour Laws which is very difficult to comply with at all the time is not at all easy and more on that nowadays, MNC and dominant positioned companies are avoiding making a deal with MSME (for the reasons of speedy Recovery Forum and ROC Compliance) and if made, then payments are not on time and on that no judicial reforms have been done for recovery of money as recovering the money via Court or Arbitration in India is a very much costly and lengthy process in India and even if MSME wins the case and opposite party uses his all right of appeal, Execution of Decree is the next step which itself is a lengthy process and this lenghty process and costly legal process has literally choked the money in a huge volume and for MSME this has been hampering a lot in many ways.

There is no doubt that during this Lockdown, the employees are at risk as they don’t have any other mode of earning and have to survive, but pressuring the employers and forcing them to make the payment via such draconian circular does discourage the faith amongst MSME’s and this will give a bad impact in future. Till date there is no encouragement or relief of any kind has been given to MSME to keep their confidence at top and there are many MSME in the market who are struggling to make the payment to their employees due to their already financial mess due to non-cooperation of Bank as Banks are only darling to big companies and political references and hence this circular of MHA of directing mandatory to pay is more of a penalty on them.

Even more, the concern is that nowadays the Apex Courts are taking a decision in Business related matters in a manner that is badly affecting the Indian economy as it has done in Telecom sector and more concern is not taking into consideration the other side realty and even if the Supreme Court is aware then also such decision only affects the business community.

The intention of the present Government and especially of Respected Shri Narendra Modi cannot be doubted ever but there happen many times that certain decision does affect badly and in this case of pressuring the payment of wage it is badly affecting small business/MSME.

Saving MSME:

Saving MSME means urgent and quick incentives for “Man, Machine, Money, Material, Market, and Method”

I myself belong to a Business family where Business is taught first and being myself an Entrepreneur since many years now can understand the many pains, problems an Entrepreneur has to suffer even during good economy and now in an almost closed market, MSME/Entrepreneur is not finding any support from anywhere and this will only lead to bad morale of MSME and hence it is more relevant now and very soon to take them into confidence and do whatever it can to revive MSME soon as there is no doubt that the Year 2020 at least till December is no-business period unless there is a sudden change in the market.

*Content of this post is a Copyright work and is owned by THE LEGAL DESK (Adv Lalit K Jain)

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Qualification: LL.B / Advocate
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I have been in Law Practice since more than 15 Years . My practice areas include: (a) Drafting of Commercial and Non-commercial Agreements/Contracts; (b) Recovery Matters before all Forums/Courts; (c) Arbitration and Conciliation; (d) Cross-Examination, Admission and Interim Stay; (d) Devising Strat View Full Profile

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