Supreme Court Refuses To Help Employees On Unpaid Salary; Asks To ‘Negotiate’ With Employers

The Supreme Court on June 12 asked employers and employees to negotiate and settle between themselves issues relating to payment of wages amid the COVID-19 pandemic resultant lockdown. The order was passed by a Bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah.

At the same time, the Court’s earlier order directing that no coercive action be taken against employers with respect to the March 29 notification of the Ministry of Home Affairs (MHA) compelling payment of wages, will continue to operate.

Read to find out more…

The Case So Far!

The MHA order of March 29 had said that, “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 workplaces, on the due date, without any deduction, for the period their establishments are under closure during the lockdown.”

The Court was hearing a number of petitions including the one filed by Karnataka-based company Ficus Pax, challenging the constitutional validity of the March 20 notification of the Secretary (Labour & Employment) and Clause III of the March 29 notification by the MHA, both of which compelled payment of full wages to workers and employees during the period of lockdown.

Before the Supreme Court, the MHA had submitted that the March 29 notification was a temporary measure for 54 days.

Attorney General for India KK Venugopal, appearing for the MHA, said, “…people were migrating in crores, they wanted the industries to continue. The notification was to stop the workers which they only would if they are paid.”

Advocate Jeetender Gupta, appearing for Ficus Pax, had argued that the Labour Ministry’s advisory asking establishments not to terminate employees or reduce their salaries, was not passed under the Disaster Management Act.

He claimed that the company he represents carried out essential services. Gupta also said that all in-house workers have been paid salaries. He said, “…but why should I pay the 800 contract workers when no work is happening? There is a separate ESI fund which has 80,000 to 90,000 crores as surplus fund.”

Some of the other petitions were by Punjab-based Ludhiana Hand Tools Association, and Advocate Aditya Giri.

Ludhiana Hand Tools Association, represented by Advocate-on-Record Rajeev M Roy, stated that the March 29 MHA order was violative of Articles 14, 19(1)(g), 265 and 300 of the Constitution, and thus must be ‘struck down’.

Senior Advocate Indira Jaising, appearing in one of the cases, said that the MHA’s direction should not be revoked and that workers needed to be paid full wages for the period of the lockdown.

Jaising had primarily argued that the principle of no work no pay is not applicable in the present circumstances, especially when there is lockdown, as the workers cannot work even if they want to.

The Supreme Court Tells Companies and Employees to Settle the Salary Dispute!

Dictating the order, Justice Ashok Bhushan said that all issues raised by the petitioners have to be decided together, and not in a piecemeal manner. 

Furthermore he said, “No industry can survive without the workers. Thus employers and employees need to negotiate and settle among themselves. If they are not able to settle it among themselves, they need to approach the concerned labour authorities to sort the issues out…”

The Court further said that the employers and employees are thus directed to work out whether salary can be paid for 54 days of the COVID-19 lockdown. Such a settlement ought to be without prejudice to the rights of the employers and employees.

The Court also stated that those employers/industries which were working at limited capacity during the lockdown can also enter negotiation. It further clarified that the employees can be allowed to come back to work without prejudice to the ongoing negotiation.

The MHA is now required to file a detailed affidavit on the legality of the March 29 notification by the end of July. The matter will be heard next in the last week of July.

The three-judge Bench reserved its orders on June 4, while directing that no coercive action be taken against employers with respect to theMHA notification.

NITES React To This Verdict

National Information Technology Employees Senate (NITES), which is a nonprofit dedicated to help employees’ across the country had also filed a petition at Supreme Court, seeking action against the employers who were deducting salaries and firing employees during the lockdown.

Reacting to this verdict, Harpreet Saluja, General Secretary National Information Technology Employees Senate NITES said, “No industry can survive without the workers. Thus employers and employee need to negotiate and settle among themselves. If they are not able to settle it among themselves, they need to approach the concerned labour authorities to sort the issues out.. As quoted by the Hon’ble Justice Ashok Bhushan NITES has already submitted complaints of more than 68000 employees for layoffs and salary cuts at the Labour Commissioner Office. As per the current status the MHA is now required to file a detailed affidavit on the legality of the March 29 notification by the end of July. There is still no clarity on the issues of layoffs. The companies claiming inability to pay employees under lockdown have not submitted any financial documents to support their statements. Hence we are still awaiting the final judgment from the Supreme Court in July 2020. The Maharashtra State Government’s GR dated 31 March 2020 is still in force and it is illegal and unethical by companies to layoff and deduct wages breaching the Government’s directions. On our complaints against various companies Labour Commissioner Office Pune and Mumbai have issued notices to these companies as well. But the companies have violated these notices as well. National Information Technology Employees Senate NITES has already submitted a letter to the Hon’ble Chief Minister of Maharashtra Shri Uddhav Thackeray ji, Labour Minister Shri Dilip Walse Patil ji, District Collector Shri Naval Kishore Ram and concerned labour authorities for their prompt intervention. We are awaiting now further actions on our complaints from Labour Commissioner Office and concerned authorities.”

We will keep you updated, as more details come in.