SC reserves verdict on Centre’s Wages order in Lockdown

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Suprme Court of India
Supreme Court dilutes MHA order on full payment of salary and said that the issue should be resolved through negotiations between the employers and their employees

The Supreme Court of India on 4 June 2020, Thursday reserved its verdict for 12 June on pleas challenging Centre’s March 29 order asking employers to pay full wages to employees for the lockdown period. However, The Supreme Court said that no coercive action will be taken against any employer for violating MHA’s order.

Earlier, The SC had asked the Centre Government to put its response in an affidavit and scheduled another hearing after a week.

Accordingly, In an affidavit filed in the apex court, the government has said the March 29 directive was a “temporary measure to mitigate the financial hardship” of employees and workers, specially contractual and casual, during the lockdown period and the directions have been revoked by the authority with effect from 18 May 2020. The affidavit also said the direction was fully in conformity with the provisions, scheme and objects of the Disaster Management Act and it is not ultra vires.

The MHA said the direction for payment of wages was in the public interest and was taken by the National Executive Committee under the pertinent provisions of the Disaster Management Act. Therefore, the National Executive Committee had full competence to issue the order.

The affidavit filed by the government has said that no material has been placed on record to establish the contentions raised in the petitions that employers are not in a financial position to pay their employees and workers.

It said that petitions have raised grounds of “financial hardship, incapacity or lack of desire” of the employers to pay their employees or workers during the lockdown without taking work from them.”

It is respectfully submitted that this ground of financial incapacity is a legally untenable ground to challenge a direction issued by the competent authority in the exercise of its statutory power,” the affidavit said.  Scores of firms from across the states moved the apex court challenging the March 29 order, which obligated employers to pay full wages to their workers during the period of the lockdown.

The industries have challenged the MHA on the source of power to pass such directions and highlighted that financial burden cannot be put on the private firms when the companies are shut during the lockdown. The apex court had in March asked the government not to resort to any coercive action against private companies who have not paid their workers’ full wages during the lockdown in accordance with a government order in March. The court had indicated that payment of full wages, as directed by the Ministry of Home Affairs (MHA) in an order on March 29, may not be viable for small and private enterprises, which themselves are tottering on the brink of insolvency due to the lockdown.- Business Standard

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