Wage stimulus package for private sector likely, says labour secretary

  • Heeralal Samariya assures that industrial relations code and social security code will be a reality soon
  • Small and medium firms are struggling with cash flows and unable to pay wages to employees

Prashant K. Nanda
Updated22 Apr 2020, 11:30 PM IST
The Union labour ministry has assured industry body Ficci that companies will not be penalised if employees joining work test positive for the novel coronavirus.
The Union labour ministry has assured industry body Ficci that companies will not be penalised if employees joining work test positive for the novel coronavirus.(Photo: Reuters)

The Union labour ministry on Wednesday said that it was exploring the possibility of a stimulus package for the private sector to pay wages, especially for small and medium firms, which are struggling with cash flows and may consider laying off employees amid the nationwide lockdown.

The announcement comes amid speculations that the Union government is set to announce a long-awaited stimulus package for businesses and workers to soften the devastating blow of the coronavirus lockdown, which has pushed many companies to the brink of bankruptcy, with revenues and cash flows disappearing.

“No one can survive with zero income,” labour secretary Heeralal Samariya told industry leaders during a webinar organized by the Federation of Indian Chambers of Commerce and Industry (Ficci), adding that he will take up the wage stimulus package at the highest level. “The big problem that remains is taking care of wages. If it can be done, it will be done.”

He, however, ruled out utilizing the corpus with the employee’s state insurance companies (ESIC) for paying 50% wage of workers during this crisis. “Paying certain portion of wages from ESIC…is not advisable,” he said in response to queries from industry leaders.

Government support to the industry to deal with this crisis is essential now, said Ficci president Sangita Reddy. If this is not forthcoming, then for the sake of their survival companies may be forced to let go some of their employees.

The Union labour secretary, however, assured Ficci that companies will not be criminalized, if workers joining work are tested positive for coronavirus. The comment comes in the wake of a Union government notice, issued earlier this month, which had put the onus on firms to ensure that their workers do not get infected with coronavirus. The Centre had said that if it happens, an FIR will be registered against the company and the factory premises may be sealed.

There should be no criminality in covid-19 control in the industry, Samariya said. However, the companies must ensure social distancing norms are followed, and adopt a dedicated transport system for the movement of workers between home and the work place, he added.

Labour reforms will be taken up in a big way in the coming months and labour codes will become a reality soon, said the labour secretary. “We are going in for labour reforms and have already got the report from our parliamentary standing committee. Also, we are getting reports on the industrial relations code and the social security code. In the coming months, these codes will become a reality.”

He also said that the Centre, in collaboration with states, had collected data about migrant workers. “We are working towards implementing measures to give them employment, as well as relief.” Samariya, however, did not divulge any detail.

Former Ficci presidents Y.K. Modi and R.V. Kanoria demanded that the government take quick steps to help the industry tackle the impact of covid-19, and urged it to offer 50% of workers’ wages so that companies have some breathing space and are not forced to close down. They presented the case study of Germany and Switzerland, which have said they will pay a lion’s share of workers wages for a few months.

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First Published:22 Apr 2020, 11:30 PM IST
HomeNewsIndiaWage stimulus package for private sector likely, says labour secretary

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