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Employers, workers can negotiate lockdown wages: Supreme Court
Various private firms and associations had approached the Supreme Court challenging the March 29 notification by the MHA stating that the obligation to pay employees arises only when work is actually done.
Private establishments, industries and employers are at liberty to negotiate with employees and arrive at a settlement regarding payment of wages for 50 days or any other period during which their establishments were closed due to the lockdown, the Supreme Court held on Friday.
Such settlement arrived at by the employers and employees will be valid and can be enforced under law despite the March 29 notification of the ministry of home affairs (MHA) mandating payment of full wages to employees for the period during which the establishment was closed, a three-judge bench headed by justice Ashok Bhushan clarified.
“Both industry and labourers need each other. No Industry or establishment can survive without employees/ labourers and vice versa. We are thus of the opinion that efforts should be made to sort out the differences and disputes between the workers and the employers regarding payment of wages and if any settlement or negotiation can be entered into between them, it may restore a congenial work atmosphere,” the court said, explaining the rationale behind Friday’s interim order.
Various private firms and associations had approached the Supreme Court challenging the March 29 notification by the MHA stating that the obligation to pay employees arises only when work is actually done.
“An employer and employee have reciprocal promises whereby the right of an employee to demand salary is reciprocal to performance of work by such employee. The employer has a right to not pay if no work is done,” the plea by the Hand Tool Manufacturers Association, an association of around 52 firms based in Punjab, said.
The notification issued by the MHA on March 29 stated that employers must pay wages in full to all their employees even if their establishments are closed due to the lockdown.
“All the employers, be it in the industry or in the shops and commercial establishment, shall make payment of wages of their workers, at their work places on due date, without any deduction for the period their establishments are under closure during the lockdown,” clause (iii) of the MHA notification said.
The notification was later withdrawn by the Centre on May 18, thus remaining in force for 50 days.
The Supreme Court in its order passed on Friday did not decide the validity of the notification itself, instead posting the case for a detailed hearing on that aspect in the last week of July.
The central government through its top law officer, attorney general KK Venugopal, defended the notification stating that it was intended to alleviate human suffering and will not come in the way if employers and employees wanted to negotiate payment terms.
“Government of India is interested in economy restarting, industries restarting. It is for employers to negotiate with employees as to how much wage could be paid for lockdown period, we will not interfere,” the attorney general told the court during a hearing on June 4.
However, various industries, traders and their associations, who are petitioners before the apex court in the case, countered that by arguing the workers will not come to the negotiating table as long as the government notification mandating payment of full wages is in operation.
The bench had shared the concerns of employers during the hearing stating that mandating payment of full wages during the lockdown could adversely impact industries. The court on June 4 granted protection to employers from any coercive action for violation of the MHA notification. That protection was extended by the court on Friday.
The court said employers, establishments, industries and factories that were working during the lockdown period, though not to their full capacity, could also resort to negotiation with their employees.
“Private establishments, industries, factories shall permit the employees to work in their establishment who are willing to work, which may be without prejudice to the rights of the employees regarding unpaid wages of above 50 days,” the court said.
