Directions to private establishments to pay 100% wages is challenged before Supreme Court

A writ petition has been filed before the Hon’ble Supreme Court by invoking Article 32 of the Constitution of India challenging the constitutional validity of Government Order dated March 29, 2020, being N0.40-3/2020-DM-I(A) issued by Ministry of Home Affairs, Government of India, under section 10(2)(I) of the Disaster Management Act, 2005. This Government Order is issued by the Government of India providing directions to Ministries/Departments of Government of India, State and Union Territories Governments and authorities to implement lockdown measures for containment of spread of COVID-19 in the country. This Government Order is challenged only to limited extent of additional measure in clause (iii) in the said Government Order, being “All the 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 lockdown period.” 

This petition is filed by Nagreeka Exports Limited, a company registered with Registrar of Companies, Kolkata, a manufacturer and exporter of cotton yarns, fabric and textiles. Company has its manufacturing units in Kolhapur, Maharashtra. Apart from challenging the Government Order dated March 29, 2020, the Company has also challenged the subsequent Government Order dated March 31, 2020 issued by Government of Maharashtra, only to the limited extent of compelling private establishments, including the petitioner, to pay full salary to all its staff, workers, contract workers, casual workers during the period of lockdown due to COVID-19, when its factories are not operational.

While challenging these Government Orders, it is contended by the Company that these Government Order violates Articles 14 and 19 of Constitution of India. It is also argued by the petitioner that neither the Government of India nor the State Government have any power under the Disaster Management Act, 2005 to direct the private establishments to pay 100% wages to its workers/employees. Further, these Government Orders offer no clarification in respect of its applicability to workman class or to all employees of all private establishments, otherwise this will have grave financial implications on all private establishments. Petitioner has also referred to order dated April 1, 2020 of Government of Maharashtra by which it is notified that Government of Maharashtra will pay salaries to government employees for the month of March, 2020 in two instalments, to be disbursed in month of April, 2020. State Government directing private establishments to pay full wages to its employees during the times when the operations of private establishments are completely shut and more particularly, when State Government is itself paying salaries to its employees in two instalments, demonstrates that these Government Orders suffer from inherent infirmity. Therefore, the petitioner has alleged that the Government Orders suffer from gross arbitrariness, irrationality and hostile discrimination, and liable to be struck down for being unconstitutional, as it violates Article 14 and 19 of the Constitution of India.