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Photo: Bloomberg
Photo: Bloomberg

SC: No coercive action against biz over wages

  • Employers and staff have been asked to negotiate on wages for the lockdown period
  • States should facilitate, initiate the process of settlement, and submit a detailed report to labour commissioners on this, says the court

NEW DELHI : The Supreme Court on Friday ruled that no coercive action can be taken against employers who fail to pay full wages to employees during the lockdown, offering relief to thousands of small businesses that have seen their revenues dwindle.

The judgement was pronounced by a three-judge bench comprising Justices Ashok Bhushan, S.K. Kaul, and M.R. Shah on a batch of petitions filed by more than 15 micro, small, and medium enterprises (MSMEs) against the home ministry’s 29 March notification that “employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers at their work places, on the due date, without any deduction, for the period their establishments are under closure during the lockdown."

The notification was withdrawn on 18 May after 54 days.

The MSMEs filing the petition included Karnataka’s Ficus Pax and Ludhiana Hand Tools Associations.

The petition said they should be allowed to pay employees 70% less. They argued that the government should take care of the rest by utilizing the funds collected by the Employees’ State Insurance Corporation or the PM Cares Fund. The petitioners said their business had been hit because of the lockdown and that being forced to pay workers in full caused extreme financial and mental stress on them.

The court asked employers and staff to negotiate on wage payments for the 54-day lockdown. The bench observed that labourers and the industry need each other and should make efforts to resolve the dispute.

“No industry can survive without workers. Thus employers and employees need to negotiate and settle among themselves. If they are not able to settle it, they need to approach the labour authorities concerned to sort the issues out," said Justice Bhushan.

States should facilitate, initiate the process of settlement, and submit a detailed report to labour commissioners on this, the court said. The Centre and states have also been directed to circulate the court order to facilitate settlement.

The case will be next heard in the last week of July.

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