Article (July-2020)


SC order on wages payment: A case of judicial evasion

H.L. Kumar

Designation : -   Advocate, Supreme Court

Organization : -  New Delhi


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Industries and business establishments are like the arteries and the lifelines of the economy of the country. No country can afford to lose sight of the fact that if the economy is sick, the people would be deprived of their livelihood in the absence of the supply of the essentials. Pandemic COVID-19 has brought extra-ordinary problems for the whole world. Business and production activities have come to a grinding halt. They need to be resuscitated and it is the primary responsibility of any government to ensure that the industries start working with all vigour. Unfortunately, our government has shown extreme insensitivity by asking the employers to pay their employees even for the period when there has neither been any production nor any work in the establishments during the lockdown period. The employers approached the Hon'ble Supreme Court of India for setting aside the highly callous order of the government. They expected that the Hon'ble Supreme Court would come to the rescue of the employers, who are already groaning with pain but the Court threw the ball in the courts of employers and employees and asked them to settle the matter through negotiations. This is no relief at all. This order of the Supreme Court is an interim one and it is believed that the final order will bring a much-needed the sigh of relief to the industries in the interest of the country's economic health.

No credit can be given to the Hon'ble Supreme Court of India, which instead of deciding the clutch of petitions filed by the employers and employers' association questioning the order of the Government of India issued on 29th March under the Disaster Management Act of 2005, passed an order which can be best described as a piece of 'glorious ambiguity'. The only saving grace is that the order passed by a three-judge bench on the 12th of June is only an interim order and the final order may come in the last week of July. The Supreme Court was hearing the petitions against the Executive firman, which asked 'all the employers, be it in the industry or in the shops or commercial establishments to make payment of wages of their workers, at their workplace on the due date, without any deduction, for the period their establishments are under closure during the lockdown'. The tone and tenor of the Ministry of Home Affairs (MHA) was coercive and intimidating. The MHA advised all employers and private enterprises not to terminate their employees from jobs, including the casual and contractual, and not to deduct their wages during the lockdown period failing which penal action can be taken against erred employers.

In fact, the interim order passed by the Hon'ble Supreme Court is more like a sermon or homily given by a pontiff than a clear-cut direction based on the facts and circumstances coming from the pulpit of justice. Our purpose is not to criticise the order of the Hon'ble Court but to point out that the negotiations in the normal circumstances would have yielded salutary result but in the time of Pandemic when all activities have come to stand still, what would be the outcome of the negotiations is anybody's guess? Hon'ble Court says that "no industry or establishment can survive without employees/labourers and vice versa". This fact is undeniably true, but the moot question is how to keep them alive when all the sources have got dried up. India's economic growth has slowed to 3.1 per cent in January-March 2020 and 11 years low of 4.2 per cent for the full fiscal 2019-20 which was lowest since 2008-09. What the apex court has said in this order is like passing the buck in the courts of employers and employees where there is no possibility of any conclusive settlement.

As far as the stand of the government is concerned, it is very clear as it had dropped the hint of adopting coercive measures against employers if the wages of the lockdown period were not given to the employees. Thus, the Supreme Court order leads to neither here nor there which said that 'efforts should be made to sort out differences and dispute between workers and employers regarding payment of wages of above 50 days and if settlement and negotiation is entered into between the two, that will restore the congenial work atmosphere'.

A million dollar question arises when there has not been any production for more than two months and the economy is in complete disarray due to depression and when most of the industries are starving of funds, gasping for their survival and then they are asked to enter into a settlement for the wages will amount to driving a nail in the body of their existence. Over a third of employers have not paid provident fund dues for April, highlighting the deterioration in finances as revenue dried up because of lockdown.

It is no respite to them and indeed to the country because that is certainly not going to improve the health of the economy.

Any court, much less the Supreme Court, is not supposed to give any decision which is unimplementable. No country in the world has imposed any burden on their employers to pay full wages to the employees for the period of lockdown.

Therefore, the case of 'Ficus Pax Private Ltd and others vs. Union of India and others' is not like a dispute between two adversarial parties but is the question of the revival of the economy and the welfare of the employees as well as employers. Hence, the government will do well to take care of the wages of the employees so that the employers who are already puffing and panting for the survival must get a new lease of life. The Hon'ble Supreme Court can use the extraordinary power under article 142 of the constitution to handle with this extraordinary situation. Such matters need all sensitivity particularly when the Executive goes adrift.

The government of India must, therefore, adopt a pragmatic and proactive attitude to ensure that economy should not be in the whirlwind. It must inform the Supreme Court that the wages for the lockdown period would be borne by the government in the interests of the employees, employers and the industry so as to bring the economy on the rails.

The court has also to give unequivocal guidelines to the government so that the relief could be meted out to all stakeholders. As is well known that the employers do not have the financial capacity to pay wages for no work to workers and the suggestions for holding the negotiation will end them to nowhere.

Therefore, the government, which represent the wishes and aspirations of the people must come up to their expectations and earnestly work earnestly to bail out the industry and other employers by providing them with the sumptuous package. It will no big deal if the Government is asked to take up the responsibility of paying the wages to employees for the lockdown period.