Supreme Court on Employer’s Obligations to Pay Wages During the Lockdown

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The Honourable Supreme Court on June 12, 2020 heard the batch of petitions challenging the Central Government’s order of March 29, 2020 (MHA Order) issued under Disaster Management Act, 2005, other consequential orders issued by different States, and the Ministry of Labour and Employment dated March 20, 2020 requiring employers to make timely payment of wages, without any deductions, for the period that their establishments were unable to function during the lockdown.

In its order, the Honourable Supreme Court, has directed that the following interim measures can be availed by all private establishments, industries, factories and workers’ trade unions/ employees’ association etc., which may be facilitated by the state authorities:

•     Employers who are willing to negotiate with their workers/employees regarding payment of wages for the period when their establishment was closed due to the lockdown may initiate such negotiations and enter into settlements with the workers/employees directly or with the intervention of the concerned labour authorities. In the event a settlement is arrived at, it may be acted upon by the employers and workers/employees, irrespective of the MHA Order.

•   Similarly, employers whose establishments were permitted to function during the lockdown may also negotiate with their employees/workers.

•     Further, the employers who decide to negotiate should publicise and communicate their intention to negotiate to their workers and employees for their response/participation. If any settlement is reached, then such settlement will be without prejudice to the rights of employers and employees, which are pending adjudication in these writ petitions.

The Central Government has been allowed time till the last week of July to submit a detailed affidavit on the legality of the MHA Order. In the meanwhile, the Court’s earlier direction that no coercive action will be taken against employers for failing to pay wages, as required under the MHA Order, would continue to be applicable.

Date:June 13, 2020