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No coercion of employers not paying wages, SC reaffirms

KT NEWS SERVICE. Dated: 6/5/2020 1:01:47 AM

NEW DELHI, June 4: The Supreme Court on Thursday extended its interim order of May 15 till June 12, barring any coercive action against the employers for non-compliance of the March 29 order of the Ministry of Home Affairs (MHA) for full payment of wages and asked the government to strike a balance between the payment of wages and protection of the industries already hit by the lockdown.
Reserving its verdict on a batch of petitions, including one by Punjab's Small Scale Industrial Manufacturers Association and another by a Mumbai firm,
the court further stayed execution of the order that envisages prosecution of the offending employers, asking all parties to file written submissions and granted three days to the Attorney General to submit a short note on the validity of the MHA notification.
The Centre had filed an affidavit justifying the notification and urging the court to direct the employers challenging it on the ground of incapacity to pay to furnish their audited balance sheets and accounts in the court.
Attorney General K K Venugopal even asserted that the March 29 directive has been revoked with effect from May 18 as it was intended only as a "temporary measure to mitigate the financial hardships to employees and workers, specially contractual and casual, during the lockdown period" and as such the employers' ground of coercion has already vanished.
The Bench comprising Justices Ashok Bhushan, SK Kaul and MR Shah expressed reservations over the viability of the MHA order that hundred per cent wages should be paid despite the fact that the industries and establishments were forced to shut down as part of the nationwide lockdown.
It also questioned why the government invoked the National Disaster Management Act for payment to the employees when there is a specific law of the Industrial Disputes Act for dealing with such situations. Noting that it appreciates that the workforce should be paid, the Bench said the capacity of the industry to pay must also be taken into account in view of the shutdown as they may not have money to pay.
Asking the government to play the role of facilitator in negotiations with the industry, the Bench sought a practical solution from it. "We have reservations over this. Some discussion should be held to work out some solution for this period of time,” the bench said, adding that a balance has to be struck between wage payment for the lockdown period and protecting the industries.
“State may have to give small industries owners a hand. Negotiations need to be held industry to industry, workmen to workmen,” the bench said while reserving the verdict on batch of petitions.
The Attorney General, appearing for the Centre, urged the court to appreciate that the underlying intention behind the MHA direction was to prevent human suffering. He said the court should factor in the humanitarian crisis on account of which the MHA order was issued. He said the people were migrating after the lockdown and so the notification was brought to ensure that the workers are paid to help them and not desert the work places.
He also sought to claim validity of the March 29 order since it was issued under the National Disaster Management Act. The Bench shot back whether the Centre has powers to prosecute the employers for non-payment of 100 per cent wages without invoking the Industrial Dispute Act.
Senior advocate Indira Jaising said the MHA direction should not be quashed since the workers need to be paid full wages for the period of the lockdown. She asserted that the principle of no work, no pay is not applicable in the present circumstances, especially when there is a lockdown.
The lawyer of Mumbai firm Ficus Pax said the company's work has come down to ten per cent and so it is impossible to pay the full wages.
A lawyer suggested that the government could have utilised the ESI fund to pay the minimum wage to all workforce in the country. The Attorney General dismissed the idea, noting that money can be borrowed from the ESI fund, but the government cannot be directed to use it to pay the workers.