No coercive action against employers, SC tells Centre

‘Govt. can’t compel private employers to pay full wages’

June 04, 2020 03:12 pm | Updated 09:53 pm IST - New Delhi

Supreme Court of India in New Delhi. File

Supreme Court of India in New Delhi. File

The Supreme Court on Thursday restrained the government from taking any “coercive action” against private employers unable to pay full wages to their workers during the COVID-19 lockdown.

A Bench, led by Justice Ashok Bhushan, reserved its order on a batch of petitions challenging the legality of a notification issued by the Union Ministry of Home Affairs on March 29, compelling employers to pay full wages to their workers during the entire period of the lockdown. The court said it would pronounce its judgment on June 12.

The petitions, filed by the owners of small commercial establishments, industries, shops and factories, said the pandemic had already driven them to the brink of insolvency. Paying workers full wages with no work done would irretrievably send them out of business. The economy would fall flat. They said the notification was ill-devised and arbitrary.

“You [the government] said everybody across the board should pay their workers 100% wages. Some of them [private employers] would be able to pay full wages, but many may not even be able to pay 25% or 50% wages... You have made such employers even liable to penal action,” Justice S.K. Kaul, on the Bench, questioned the logic behind the notification.

“The problem is on the one hand, you want to put money in the hands of the industries and on the other, workmen cannot be abandoned. A balance has to be maintained... Some negotiations have to be held from industry to industry, from workmen to workmen,” Justice Kaul observed.

Senior advocate K.V. Vishwanathan, for some petitioner-employers, submitted that the global pandemic had affected all. “Let this not be considered a bonanza for some and ruin for others. Quash the March 29 notification and let parties start negotiations with a clean slate,” he said.

Justice Bhushan questioned the government’s authority to compel private employers to pay full wages to their workers. “When it comes to governmental authorities, you can give such directions, but how can you force private persons,” he asked.

Attorney-General K.K. Venugopal, for the government, said the notification was no longer operational and most workers had already returned to their villages.

“The measure was pro-actively taken by the respondent to prevent perpetration of a financial crisis within the lower strata of society, labours and salaried employees... It would neither be in the interest of justice nor in public interest to adjudicate the validity of a notification which operated only for 54 days to mitigate the financial hardships of crores of workers and employees,” the government said.

Mr. Venugopal said the government was working hard to restart the economy and get the industries back on their feet. “We are not going to take any coercive action against them,” he assured the court.

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