Mahendra Kumawat, B.Sc., LLB
Background
PM Shri Narendra Modi, announced on dt. 24.04.202 nationwide lockdown to prevent “Covid -19” in India for 21 Days from dt, 25.03.2020.
All activities commercials and non-commercials closed in country except exclusion given as per order issued with guideline as per:-
1) Order No.40-3/2020-DM-I (A) GOI, Ministry of Home Affairs dt. 24/03/2020(As amended time to time) &
2) D.O. Letter No. 35022/4/2020 Policy (Pt.) dated. 23/03/2020 of Secretary. Dept. of pharmaceuticals, Ministry of Chemicals & Fertilizers, Govt. of India Issued under Disaster Management Act 2005 section 6(2)
Disaster Management Act 2005 (As amended):
This act extend to whole of the India,
The Central Government may, by notification in the Official Gazette appoint; and different dates* may be appointed for different provisions of this Act and for different States, and any reference to commencement in any provision of this Act in relation to any State shall be construed as a reference to the commencement of that provision in that State.
Section 71.Bar of jurisdiction of court – No Court (Except SC or HC)
Section 72. Act to have overriding effect.
“The provisions of this Act, shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.”
Section 74. Immunity from legal process.
Section 75. Power of Central Government to make rules.
Section 76. Power to make regulations.
Order issued by National Executive committee, in exercise, power conferred under section 10(2)(l) of Disaster management act 2005, shall make payment of wagesto their (shops and commercial establishment) workers at their work place on the due date, without deduction for the period of 21 days of declared lockdown nationwide.
It is further directed that in case of violation of this order, shall take strict action under this act. The district magistrate/Deputy commissioner or sr. superintendent or superintendent are personally liable for implementation of above direction & measures.
“No work no pay” principle cannot be invoked here. A March 29 GOI order makes it clear that deduction of wages during the lockdown will
Different legislation for Workmen/Payment of wages
1. The Industrial Disputes Act 1947
2. The Code on Wages 2019
3. The Contract Labour Act 1970
4. The Interstate Migrant Workmen Act 1979
5. The Industrial Employment (Standing Order) Rules 1946
6. The Epedemic Dieses Act 1897
The Industrial Disputes Act, 1947
[Sec. 2 (s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute,
but does not include any such person—
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding 3 [ten thousand rupees] per mensem or exercises, either by the nature of the duties ……………… functions mainly of a managerial nature.]
Section 2(kkk)-“lay-off” means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or natural calamity or for any other connected reason] to give employment…….”
Section 25C-“Whenever a whose name is borne on the muster-rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid-off, whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid- off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid-off.
Provided that if during any period of twelve months, a workman is so laid-off for more than forty-five days, no such compensation shall be payable in respect of any period of the lay-off after the expiry of the first forty-five days, if there is an agreement to that effect between the workman and the employer.”
The Code on wages 2019
Important Definitions
Sec. 2 (k)“employee” means, any person (other than an apprentice engaged under the Apprentices Act, 1961), employed on wages by an establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union;
Sec. 2 (s)“minimum wage” means the wage fixed under section 6;
Sec. 2 (y)“wages” means all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment,
and includes,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
but does not include––
(a) any bonus;
(b) the value of any house-accommodation, …………… order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident fund;
(d) any conveyance allowance;
(e) anyspecial allowance;
(f) house rent allowance;
(g) remuneration payable under …………………………………order of a court or Tribunal;
(h) any overtime allowance;
(i) any commission payable to the employee;
(j) any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other……………………the termination of employment;
Sec. 2 (z)“worker” means any person (except an apprentice as defined underclause (aa) of section 2 of the Apprentices Act, 1961) employed in any industry to doany manual, unskilled, skilled, technical, operational, clerical or supervisory work forhire or reward, whether the terms of employment be express or implied, and
includes—
(i) working journalists as defined in clause (f) of section 2 of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955; and
(ii) sales promotion employees as defined in clause (d) of section 2 of the Sales Promotion Employees (Conditions of Service) Act, 1976, …………………………………… led to that dispute,
but does not include any such person––
(a) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or theNavy Act, 1957; or
(b) who is employed in the police service or as an officer or other employeeof a prison; or
(c) who is employed mainly in a managerial or administrative capacity; or
(d) who is employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month or an amount as may be notified by theCentral Government from time to time.
Provision for Deduction of Wages
Sec. 18 (2) (b)deductions for his absence from duty;
Sec. 20. (1) Deductions may be made under clause (b) of sub-section (2) of section 18 onlyon account of the absence of an employee from the place or places where by the terms of hisemployment, he is required to work, such absence being for the whole or any part of theperiod during which he is so required to work.
(2) Deduction may only for the period of absence of employees
[Explanation.––For the purposes of this section, an employee shall be deemed to be absent from the place where he is required to work if, although present in such place, he refuses, in pursuance of a stay-in strike or for any other cause which is not reasonable in the circumstances, to carry out his work.]
Burdon of proof
Sec. 59. Where a claim has been filed on account of non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deductions not authorized by this Code from the wages of an employee, the burden to prove that the said dues have been paid shall be on the employer.
Repeal and savings.
Sec. 69. (1) The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 are hereby repealed.
Industrial Employment (Standing Orders) Central Rules, 1946
Schedule I[Model Standing order in respect of Ind. Establishment not being Ins. Establishment in coal Mines]
Sec. 12. Stoppage of work.—
(1) The employer may, at any time, in the event of fire, catastrophe, breakdown of machinery or stoppage of power-supply, epidemics, civil commotion or other cause beyond his control, stop any section or sections of the establishment, wholly or partially for any period or periods without notice.
(2) In the event of such stoppage during working hours, the workmen affected shall be notified by notices put upon the notice-board in the department concerned, 13[and at the office of the employer and at the time-keeper’s office, if any], as soon as practicable, when work will be resumed and whether they are to remain or leave their place of work. The workmen shall not ordinarily be required to remain for more than two hours after the commencement of the stoppage. If the period of detention does not exceed one hour the workmen so detained shall not be paid for the period of detention. If the period of detention exceeds one hour, the workmen so detained shall be entitled to receive wages for the whole of the time during which they are detained as a result of the stoppage. In the case of piece-rate workers, the average daily earning for the previous month shall be taken to be the daily wage. No other compensation will be admissible in case of such stoppage. Whenever particable, reasonable notice shall be given of resumption of normal work.
(3) In case where workmen are laid off for short periods on account of failure of plant or a temporary curtailment of production, the period of unemployment shall be treated as compulsory leave either with or without pay, as the case may be. When, however, workmen have to be laid off for an indefinitely long period, their services may be terminated after giving them due notice or pay in lieu thereof.
(4) The employer may in the event of a strike affecting either wholly or partially any section or department of the establishment close down either wholly or partially such section or department and any other section or department affected by such closing down. The fact of such closure shall be notified by notices put on the notice-board in the section or department concerned and in the time-keeper’s office, if any, as soon as practicable. The workmen concerned shall also be notified by a general notice, prior to resumption of work, as to when work will be resumed.
The Interstate Migrant Workmen (Regulation of employment &condtn. Of Service) Act 1979
Sec.2(g). “principalemployer” means –
(ii) in relation to a factory, the owner or occupier of the factory and where a person has been named as the manager of the factory under the Factories Act, 1948 (63 of 1948), the person so named;
Sec.2(i) “wages” shall have the meaning assigned to it in clause (vi) of section 2 of the Payment of Wages Act, 1936 (4 of 1936);
Sec.2(j) “workman” means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied,
but does not include any such person—
(i) who is employed mainly in a managerial or administration capacity; or
(ii) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem, or exercises, either by the nature ……………………………………… of a managerial nature.
Sec.17. Responsibility for payment of wages.—
(1) A contractor shall be responsible for payment of wages to each inter-State migrant workman employed by him and such wages shall be paid before the expiry of such period as may be prescribed.
(2) Every principal employer shall nominate a representative ………………….. be prescribed.
(3) It shall be the duty of the contractor to ensure …………………..of the principal employer.
(4) In case the contractor fails ………. then the principal employer …………by the contractor.
Sec.18. Liability of principal employer in certain cases.—
(1) If any allowance required to be paid under section 14 or section 15 to an inter-State migrant workman employed in an establishment to which this Act applies is not paid by the contractor or if any facility specified in section 16 is not provided for the benefit of such workman, such allowance shall be paid, or, as the case may be, the facility shall be provided, by the principal employer within such time as may be prescribed.
(2) All the allowances paid by the principal employer or all the expenses incurred by him in providing the facility referred to in sub-section (1) may be recovered by him from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.
The Epidemic Diseases Act 1897
Under the Act both the Central and the State governments have the powers to take measures in order to control the epidemic.
Section 2 of the Act, confers States with the following special powers: To take “measures and, by public notice, prescribe such temporary regulations to be observed by the public or by any person or class of persons as it shall deem necessary to prevent the outbreak of such disease or the spread thereof, and may determine in what manner and by whom any expenses incurred (including compensation if any) shall be defrayed.”
Opinion under light of above acts and definitions
# In light of provision and definition given herein referred act,
- (i) Employees, drawing wages/salary ten thousand or exceeds per three mensem[fifteen thousand as per code on wages 2019], or and working managerial or administration capacity, are not defined any relief directly under any legislation relating to the labours in India.
- Provision has provided under acts relating to labour matters and rules made their under to deduct the wages if incase of workmen or worker or any employees is absence from his place or places of duties or working,where he required to work by the terms of his employment. “
- Force majeure condition invoked after formation of pandemic situation due to outbreak of covid-19 virus and nationwide lockdown imposed mandatory by State Govt. & Central Govt., in exercise of power conferred under the Disaster Management Act 2005 as amended, to prevent this pandemic spread of virus covid-19. “This situation not defined under any above referred acts or rules made their under.”
- No violation of any section of any act made for the matters relating to the labors or rule made their under by the employer on his own wish in the present circumstances as neither the employers offer work nor the workers are able even if willing to report for work.
- In present situation, while all industries/commercial establishment/shops are lock-down may not have alternate other adequate source to for their financial requirement or if the employer is incapacitated to pay meet the full expenditure of payment of wages then it cannot termed as illegal on the part of employer. However, the burden to prove shall be on the employer.
# Legal provisions under “The Disaster management Act 2005”
“The powers of the National Executive Committee and the State Executive Committee have been listed in the Act. A reading of the provisions of the Act would show that powers have not been vested with either the State or the Central Government to direct private employers to pay wages during a disaster despite the employees not working. The scope of the Act empowers committees to frame plans to meet disasters”.
# Clarification about wages paid during lockdown by MCA
- In a clarification on corporate social responsibility (CSR) spending signed on Friday 11th April 2020, the ministry of corporate affairs has said payment of salary or wages in normal circumstances is a contractual and statutory obligation of the company. Similarly, payment of salary or wages to employees and workers even during the lockdown period is a moral obligation of the employers, as they have no alternative source of employment or livelihood during this period. Such payment to employees and workers during the lockdown period shall not qualify as admissible CSR spending, the ministry said.
- Payment of wages to temporary or casual or dailywage workers during the lockdown period is partof the moral/ humanitarian/ contractualobligations of the company and is applicable toall companies irrespective of whether they have any legal obligation for CSR contribution undersection 135 of the Companies Act 2013. Hence,payment of wages to temporary or casual or dailywage workers during the lockdown period shallnot count towards CSR expenditure.
# Substantial Provision under ID Act 1947
The Industrial Disputes Act 1947 is a Special Law which mandates payment of “lay-off” compensation in the event of a natural calamity or other connected reasons. The liability in this Special Law which is specific has restricted the payment of 50 per cent of wages as compensation limited to first 45 days of “lay-off”. Being so the various directions/circulars/communications of the government issued, direction to DM/Police Authorities to strict implementation can at best be advisory and not mandatory.
“The government would need to give legal position to the order issued on date 29th March 2020.”
# Open to interpretation
♦ Since the NDMA does not define workers, which law’s definition of workers should be used under this order?
♦ Will the employees, including the supervisory, administrative and managerial staff who are generally excluded from the definition of workers in the Industrial Disputes Act, 1947 (the ID Act) be included or not?
♦ Should the order be construed for March and/or April, since the lockdown covers parts of both months?
♦ Does the mean of order, the wages could be paid pro-rata as per the lockdown period or need to payment for the entire month?
# Penal Provision under the “Disaster Management Act 2005” for violation of orders
Sec. 51 (b) Punishment for obstruction, etc.Whoever, without reasonable cause – refuses to comply with any direction given by or on behalf of the Central Government or the State Government or the National Executive Committee or the State Executive Committee or the District Authority under this Act,
shall on conviction be punishable with imprisonment for a term which may extend to one year or with fine, or with both, and if such obstruction or refusal to comply with directions results in loss of lives or Imminent danger thereof, shall on conviction be punishable with imprisonment for a term which may extend to two years.
Sec. 58 (1) Offence by companies “Where an offence under this Act has been committed by a company
or body corporate, every person who at the time the offence was committed, was in charge of, and was
responsible to, the company, for the conduct of the business of the company, as well as the company,shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished
accordingly”
Sec. 58 (2)Notwithstanding anything contained in sub-section (1),where an offence under this Act has been committed by a company, and it ……………….any director, manager, secretary or other officer of the company, …………………… shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purpose of this section—
(a) “company” means anybody corporate and includes a firm or other association of individuals;and
(b) “director”, in relation to a firm, means a partner in the firm.
Way forward
√ The Indian Government would need to come up with a scheme to subsidies employers towards the wages paid during the lockdown. The scheme can be linked to profits earned by the industrial establishment and the wage bill for a month. In the absence of such a scheme, private employer’s especially small and medium industries will be put through hardships that could even bankrupt them.
√ The “no work no pay” judicial principle cannot be invoked in the present circumstances as neither the employers offer work nor the workers are able even if willing to report for work. Ovid-affected workers are rendered ineligible to work. So the employers cannot deduct wages for absences due to national lockdown.
√ At this crucial hour is the sustenance of the business entities wherein they struggling to cover unanticipated losses due to lock-down, the employer required to allow to reduce pay the wages of the employees. While all around the world, many govt. of affected countries are reducing the payment of their officials and expenses.
√ Payment of wages made for the days of no work during lock-down, should considered under CSR expenditure for the purpose of fight against corona by industries. This consideration will mitigate the losses of industries/corporate establishment and will do help to sustain in the current situation.
Wait and watch for removal of doubts for legal status of order to payment of wages and financial relief or scheme for industries to sustain during the struggling to recover their unanticipated losses.
Disclaimer:Provided Legal information is not legal advice, use of this information at your own risk. Author not responsible of any legal liability arises by use of given information.
wages paid during lockdown period (april20) does attract under ESI and EPF deduction? also
or not applicable