Don’t Prosecute Employers Who Don’t Pay Wages During Lockdown: SC

MHA had issued an order on 29 March saying all employers had to pay workers full wages even during lockdown.

The Supreme Court on Friday, 15 May, said that authorities should not take any coercive action against private employers who fail to pay wages to workers during the nationwide coronavirus lockdown.

A bench of justices L Nageshwara Rao, Sanjay Kishan Kaul and BR Gavai were hearing a number of petitions filed by companies, industrial associations and MSME groups, which had asked the apex court to quash the Ministry of Home Affairs’ order dated 29 March, which had directed all employers to pay full wages to their workers while their establishments are shut during the lockdown.

As this order was passed under Section 10(2)(l) of the Disaster Management Act, it was binding, and those who failed to comply with it were liable to be prosecuted under Section 51 of the same Act, or Section 188 of the Indian Penal Code (IPC).

The court has not formally stayed the MHA order, though it issued notice in the petitions, and asked state governments to ensure no private employers are prosecuted while it hears the case. Solicitor General Tushar Mehta asked the court for time to reply to the petitions, and is to submit a detailed response by the next hearing after taking instructions.

The judges observed that there may be small industries which would not have been able to survive financially beyond a limited period of time (the lockdown has been extended twice since its first iteration, when the MHA order was issued), and if they cannot earn, how could they pay their workers.

The Association of Micro, Small and Medium Enterprises has argued in its plea that the MHA’s order ignored the financial implications for such employers, and that this could cause permanent unemployment, adversely affecting the economy even further, reported PTI. Several petitions have argued that the blanket directions for payment of salaries without deductions is arbitrary and illegal.

Senior advocate Jamshed Cama, who appeared for one of the associations, noted that there were no production orders for companies like this, and that there was a risk of prosecution for them for failing to follow the MHA order.

The court will take up the matter again next week.

(With inputs from PTI.)