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Unreasonable and Arbitrary Interference on Rights of Employer: New Plea in SC against Govt Notifications On Payment Of Full Wages To Employees During Lockdown

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 argues that the advisory notified by the Secretary (Labour & Employment) on March 20 and Clause (iii) of the order notified by the Ministry of Home Affairs on March 29 are contrary to provisions of the Constitution.


The petitioner company, which engaged 176 permanent employees and 939 contractual workers prior to the lockdown, has apprised the Court of difficulties being faced by it due to these notifications. Monthly business has come down to 5-6%, wages have been paid to all workers (including contract workers) for the month of March, and most workers do not show up for work believing they will get wages despite not resuming work, explains the plea.


"The Impugned notifications do not differentiate between the workers who report to work and the workers who refuse to work, when it comes to entitlement for wages for lock down period as concerned, thereby being contrary to the principle of 'Equal Work Equal Pay'."


It is contended that the notifications do not differentiate between workers engaged in establishments which are permitted to operate during the lockdown period. Therefore, a worker in such an establishment can continue to feel entitled to wages despite not showing up for work. This is a contrary to Articles 14 as well as 39, because the principles of 'Equal Work Equal Pay' and 'No Work No Pay' are both violated.


It is further argued that the notifications cause arbitrary and unreasonable interference with a persons' fundamental right to carry on with his trade or profession under Article 19(1)(g).


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", asserts the petitioner.


Thus, alluding to the said notifications as arbitrary, illegal, irrational and unreasonable, the petitioner seeks the same to be declared ultra vires Articles 14 and 19(1)(g)of the Constitution.


In another notable argument, it is urged that the Government does not have the power to impose any financial obligations on the private sector by invoking the Disaster Management Act, 2005 (DMA). It is the Government's obligation to ensure the same under Article 43 of the Constitution, adds the plea.


"The Home Secretary, Ministry of Home Affairs, Government of India cannot invoke Section 10(2)(l) or any other provision of the Disaster Management Act 2005 ("DMA 2005") to impose financial obligations on private sector such as payment of wages, contrary to the obligation of state under Article 43 of Constitution of India."


Therefore, it is suggested that the Government may invoke its powers under Sections 46, 47, 65 and 66 of DMA to raise and direct funds and resources towards mitigation of the emergency. The onus to compensate workers is on the Government, which cannot be shifted upon employers in the private sector, asserts the plea.


In this light, it has further been prayed that the Government could subsidize 70-80% wages of workers during this period by utilizing funds collected through the Employees' State Insurance Corporation (ESIC) or the PM Cares Fund or any other such Government scheme.


This is the third plea filed in the last week before the Apex Court which challenges the MHA order. Previously a Maharashtra based textile mill and a Punjab based Association filed petitions raising similar grievances.

Source: LiveLaw