All INDIA Central Council of Trade Unions

April 27,2020

By Tanya Vashishtha

All India Central Council of Trade Unions (AICCTU) has moved the Supreme Court seeking intervention as a Respondent in a plea against Government order on payment of full wages to employees during the lockdown period.

The impugned order was issued by the Union Ministry of Home Affairs on March 29 under Section 10 (2) (l) of the Disaster Management Act, 2005, directing all employers to retain their employees and pay full wages to them throughout the lockdown.The Applicant, through Advocate Aparna Bhat, has submitted that since much of the population relies on private establishments for employment and wages, regulation of the relationship between such establishments and workers is a necessary corollary to fulfill the objective of the DM Act.

It averred that employers have been showing significant profits in the past and are in a position to recover their losses. However, if employees are terminated or wages are reduced, it would further deepen the crisis and weaken the financial condition of the employee.

“The proper and timely payment of wages will mitigate the disruption caused by the COVID-19 lockdown. The directions issued by the impugned order are necessary measures to safeguard the rights of workers in the face of severe social and economic hardships caused by the COVID-19 lockdown…The lockdown and its consequence has affected everyone in the country and has affected the poor and the marginal the most. The employers are mostly profit driven and most of them have been showing significant profits made by them in the preceding period and will be able to recover their losses. It is wholly misconceived to represent the woes of private establishments to be on a worse footing as compared to workers, most of whom are poor with negligible to no savings with many of them being indebted to money lenders. Loss of wages to them will lead to complete loss of their livelihoods,” the application read.

The Applicant has contended that the impugned order does not affect the employment contracts and, the relationship between the employer and the worker subsists. Thus, merely because the employers are “unable to provide work” they cannot terminate/ deduct wages of their employees. “The contract between the employer and the worker is that the worker will get his wages as long as he is employed and is ready to work. It cannot be read into the contract that he will not be entitled to wages if the employer is unable to provide him with work.

The workers, even though not given work, are expected to abide with all other terms of the contract such as not taking employment elsewhere, not disclosing trade secrets to rivals, etc. In such a situation it is clear that the contract of service is valid and subsisting during the lockdown and workers are entitled to wages under such a contract,” the application states.

In the main petition it is contended that the Government cannot invoke Section 10(2)(l) or any other provision of the Disaster Management Act 2005 to impose financial obligations on private sector.Objecting to this, the Applicant has submitted that the DM Act is concerned with disasters and the emergent situation that may arise with each disaster has to be “administratively dealt with” by the executive through its administrative orders issued under the Act.

“The act therefore cannot explicitly provide and describe every situation and its objective is to stipulate mechanisms to deal with disasters. The determination of what constitutes such measures has been left to the wisdom of the respective State Authorities,” the Applicant submitted.It has further been contended that the legislative competence of the Govt vis-a-vis the impugned order cannot be called into question in light of the fact that during an emergent situation, Section 35 of the DM Act stipulates that the “central government shall take all such measures as it deems necessary or expedient for the purpose of disaster management.”
In this regard the Applicant has further clarified that though Section 35 was not mentioned in the impugned Govt order yet, neither the failure to mention the source, nor even the mention of an incorrect source of power, vitiates the exercise of that power (see Ram Manohar Lohia v. State of Bihar, AIR 1966 SC 740).

In view thereof, the Applicant has sought intervention to oppose the Petition. “The right to wages is a pre-existing right which flows, inter alia, from the contract of employment as well as a broader constitutional and statutory scheme flowing from Articles 14 and 21 of the Constitution and encompassing, the Payment of Wages Act, the Minimum Wages Act, the Contract Labour (Regulation and Abolition) Act, the Industrial Disputes Act, 1947, etc,” the application states.

A Karnataka based company has moved Supreme Court challenging the Constitutional validity of two Government orders which directed employers to retain their employees and pay full wages throughout the duration of the ongoing nationwide lockdown.The Petitioner has asserted that the effect of these notifications is such that “an otherwise stable and solvent industrial establishment, especially an MSME establishment, can be forced into insolvency and loss of control of business”. 

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