No coercive action on firms for non-payment of full wages during lockdown: SC

In a breather for private companies, the Supreme Court on Friday (June 12) said that the government cannot take any coercive action till the last week of July against those who have failed to pay full wages to their employees during the coronavirus-induced lockdown period.

A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and M R Shah also gave the Centre four weeks’ time to reply on the legality of the Union Home Ministry’s March 29 notification, which made it mandatory for employers to pay full wages to staff.

The bench said industries and employees need each other and they should sit together to arrive at a settlement on the issue of payment of wages.

The bench asked the state governments to facilitate such settlement process and file its report with the labour commissioners concerned.

The apex court asked the Centre and state governments to circulate its order through labour departments to facilitate the settlement process.

The Ministry of Home Affairs (MHA), in its March 29 circular, had asked all employers to make payment of wages to their workers without any deduction for the period their establishments were under closure during the lockdown to contain COVID-19. The Secretary (Labour & Employment) had also written to chief secretaries of states to advise employers not to terminate employees from their jobs or reduce their wages amid the challenging situation of the pandemic.

Attorney General K K Venugopal, appearing for the Centre, had earlier told the court that as the people were migrating after the lockdown, the government came out with the notification to ensure that the workers are paid to help them in staying put at workplaces. The top law officer had referred to the provisions of the National Disaster Management Act to argue the validity of the March 29 circular.

The Centre had also filed an affidavit justifying its March 29 direction saying that the employers claiming incapacity in paying salaries must be directed to furnish their audited balance sheets and accounts in the court.

The government had said that the March 29 directive was a “temporary measure to mitigate the financial hardship” of employees and workers, especially contractual and casual, during the lockdown period and the directions have been revoked by the authority with effect from May 18. While requesting the top court to dispose of as infructuous the batch of pleas challenging the March 29 notification, the government had said the “impugned notifications have outlived their life and adjudication of the same would only entail an academic exercise as it would not be in the interest of the public to seek recovery of salaries paid to employees and workers for the said 54 days.

(With inputs from agencies)