Home » Lockdown: Don’t take coercive action against firms on full wages, SC tells govt

Lockdown: Don’t take coercive action against firms on full wages, SC tells govt

by Raju Vernekar
0 comment 3 minutes read

IT Correspondent
Mumbai, May 16
While dealing with a bunch of petitions filed by different industries challenging the Union Government’s directives to pay full wages to workers during the lockdown period, the Supreme Court on Friday directed the government to put on hold its order of 29 March.
In response to the SC’s direction, the Solicitor General of India, Tushar Mehta sought time to file a detailed report. Now the hearing of the petitions is scheduled for next week.
A three-judge Bench headed by Justice L. Nageswara Rao indicated that payment of full wages, as directed by the  Union 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. Some small units may not have been able to survive a fortnight into the lockdown. The court remarked that the March 29 order was an omnibus one and there were several issues involved that required careful reconsideration from the government side.
The court hearing was based on a batch of petitions filed by several companies challenging the constitutional validity of the March 29 order, which mandates that industry, shops and commercial establishments, without exception, should pay their workers without any deductions in the name of COVID-19 pandemic.
The petitions have been filed by entities from the micro, small and medium sector against the government’s order to pay full wages to their workers. MSME industries have said that they are compelled to slide into insolvency by the government, which has ordered them to continue to 100% pay to their workers. The petitioners even prayed the court to order the government to support them by taking responsibility for 70% of their staffers’ pay by drawing funds from PM CARES Fund or the Employees State Insurance Corporation.
“It is implicit in the fundamental right of an employer to trade or business that there is an obligation to pay when work is actually done and there is no obligation if no work is done. An employer and employee have reciprocal promises whereby the right of an employee to demand salary is reciprocal to performance of work by such employee. The employer has a right to not pay if no work is done,” petitions filed by private firms like Nagreeka Exports Limited and Ficus Pax Private Ltd said. Nagreeka said it was engaged in manufacture and export of cotton yarns, fabric and textiles. It said stoppage of operations since the lockdown had led to losses to the tune of Rs.1.50 crore.
The petitioners said that a blanket direction from the government to private establishments to pay full salaries against no work was arbitrary and violative of Article 14 (right to equality), 19 (A), (G), 265 and 300 of the Constitution.  They also challenged sections 10(2) (I) of the National Disaster Management Act 2005.lso pending hearing in the Supreme Court and the high courts across the country.

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