Latest News

SC Gives Option To Establishments And Workers To Negotiate On Full Payment Of Wages, Regardless Of MHA Order

The Supreme Court on Friday batted for negotiations between establishments and workers on the full payment of wages, regardless of the direction issued by the Ministry of Home Affairs on March 29.


"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", Justice Bhushan read out from the order.


The bench also passed the following directions :


1) A date for conciliation and settlement may be effectuated by the MHA.


2) Directions for participation of employees for effectuating this settlement may be publicised for the benet of all employers and workers.


3) State governments to facilitate such settlements and initiate the process for the same and submit reports before the concerned labor commissioners.


4) Workers who are willing to work should be allowed to work notwithstanding disputes regarding wages.


The case will be next taken up during the last week of July. The SC direction against coercive action against employers on the MHA Order will continue till then.


Centre and states have been directed to circulate court order through labour departments to facilitate settlements.


The MHA direction was in force for 54 days, before it was withdrawn with effect from May 18.


On June 4, while reserving orders in the case Ficus Pax Pvt Ltd vs Union of India and connected cases, a bench comprising Justices Ashok Bhushan, S K Kaul and M R Shah had ordered that no coercive action should be taken against employers on the basis of the MHA direction to pay full wages amid lockdown.


The petitions challenged the order issued by Home Secretary on March 29 invoking powers under Section 10(2)(l) of the Disaster Management Act 2005, which directed as follows :


"All the employees, 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 direction issued by the Ministry of Home Affairs was intended to prevent human suffering amid the national lockdown, Attorney General, KK Venugopal had told the Court.


"The notication is for preventing human suffering", said the AG in response to a batch of petitions challenging the order issued on March 29 invoking the powers under Disaster Management Act.


Financial incapacity cannot be a reason to challenge the notication, the MHA said in its counter-adavit.


"Financial incapacity is a legally untenable ground to challenge a direction issued by a competent authority in the exercise of its statutory power", stated the MHA's counter adavit.


The MHA explained that directions were a temporary measure to "mitigate the nancial hardship of the employees and workers specially contractual and casual during the lockdown period."


The MHA also informed the Court that the March 29 notication has ceased to have with effect from May 18.


On May 15, the SC had passed an interim order in the petitions led by Hand Tools Manufacturers Association and Jute Mills Association that that no coercive action should be taken against the petitioners for non-compliance of the MHA direction.


On May 26, the SC had issued extended the interim orders passed in the cases of Hand Tools Manufacturers Association and Jute Mills Association


The MHA direction was challenged as unreasonable and arbitrary and as violative of the fundamental right to trade and business of the employers. Since operations are completely shut down during the lockdown, it is impossible for the employers to continue to bear the burden of full salary of employees, the petitioners submitted.


The petitioner(s) have also raised the argument that the impugned direction was beyond the scope of powers conferred under the Disaster Management Act.


"Interpreting Section 10(2)(l) of the Disaster Management Act 2005 as conferring power on the Central Government to direct Private Establishment to make full payment of wages to the employees during the lockdown period is arbitrary and violative of Articles 14, 19(1)(g) and 300A of the Constitution of India", said one of the pleas.


(With inputs from Sanya Talwar)