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Plea In SC To Direct Centre To Pay 70 % salaries During Lockdown Period From Govt Funds

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A group of 11 Haryana based micro, small and medium businesses have  petitioned the Supreme court seeking directions to the Government of India to subsidize the wages of workers to the tune of 70% for lockdown period by utilizing the funds collected by the Employees’ State Insurance Corporation (ESIC) or the PM Cares Fund or through any other Government Fund / Scheme.

As per the Impugned Advisory on 20th March, 2020 issued by Secretary (Labour & Employment) to all States / UTs, requesting them to issue necessary Advisory to Employers / Owners of all establishments in the state, to extend their cooperation by not terminating their employees, particularly casual or contractual workers from job or reduce their wages. As per same, if any worker takes leave, he should be deemed to be on duty without any consequential deduction in wages for this period. Further, if the place of employment is to be made non-operational due to COVID-19, the employees of such unit will be deemed on duty.

Similarly, Pursuant to the clause (iii) of the impugned order passed by Home Secretary, Ministry of Home Affairs, on 29th of March, 2020 which says “all the employers, be it in the industry or in the shops and commercial establishments shall make payment of wages of their workers at their work places, on the due date, without any deduction, for the period their establishments are under closure during the lockdown.” The Impugned Order further directs the States / UTs to take necessary action for the violation of the Said Order. The Chief Secretary, Haryana Government vide its letter dated 29.03.2020 has further circulated the impugned order dated 29.03.2020 to all administrative secretaries, nodal officers, Divisional Commissioners and Deputy Commissioners in the state for necessary action. 

The Petitioners are MSMEs (Micro, Small and Medium Enterprises) registered under the Micro Small Micro Enterprises Development Act 2006 (“MSMED Act 2006”) as manufacturing / service industry. The petitioners have atleast one of their factories / work place in the state of Haryana. 

The Petitioner stated in the petition that the Impugned Notifications are arbitrary, illegal, irrational, unreasonable and contrary to the provisions of law including Article 14 and Article 19(1)(g) of the Constitution of India and is ipso facto reason enough to strike down the impugned notifications. By way of the the impugned notifications, an otherwise stable and solvent MSME industry could be forced into insolvency. Consequently, the very notifications issued for the benefit of the workers would in fact adversely impact those workers in the long term, who would be rendered unemployed.

“the Central Government in terms of Section 46 of DMA 2005 has the power to constitute National Disaster Response Fund towards meeting the expenses for emergency response, relief and rehabilitation. Similarly, Section 47 of DMA 2005, empowers the Central Government has the power to constitute National Disaster Mitigation Fund for the purpose of mitigation. Even though the Central government has the power to allocate fund for emergency response, relief, rehabilitation, mitigation of disasters under DMA 2005 it cannot enforce financial obligations upon the private establishments’, said by the petitioner.

It is also mentioned in the petition that the impugned notifications are in violation of Article 14 and Article 39 of the Constitution of India, being contrary to principle of “Equal Work Equal Pay” and also “No Work No Pay” for it does not differentiate between the workers who are working during the lock down period in establishments such as the Petitioner who have been permitted to operate during the lockdown period. While the intent of MHA to pass impugned order appears to be to safeguard the interest of MHA workers, it has arbitrarily expanded the scope to all workers across the board.

The Petitioners said that it should be entitled to laying off & retrench workers in term of Section 2(kkk), Section 2(oo) and Sections 25C to 25N of I.D. Act. As per Section 25M of I.D. Act there is no prohibition of layoff or a permission from the government, if such layoff is due to a natural calamity. Further, the Respondents cannot legally override the contracts between Employers and Contractors for contractual work. The Respondents cannot restrain the Petitioners from terminating their contracts, especially when the market demand post Covid-19 has contracted and the cash flow of the Petitioners has been severally hampered and the Respondents Government of India cannot arbitrarily differentiate against the construction workers & workers in other Industry for utilization of welfare funds to compensate the workers for the lockdown period.

Therefore, the petitioner seeks for the directions to the Central Government to subsidize the wages of workers to the tune of 70% for lockdown period by utilizing the funds collected by the Employees’ State Insurance Corporation (ESIC) or the PM Cares Fund or through any other Government Fund / Scheme.

-India Legal Bureau

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