Are employers no longer under obligation to pay full wages during lockdown after Central Govt. repealed old orders, including 29.03.2020?

It is correct to state that, in recent order dt. 17.05.2020 (Lockdown no.4) the National Executive Committee (Central Govt.) has repealed its previous orders, including the one dated 29.03.2020, wherein employers were directed to pay full salaries to their employees during lockdown, even if the organisation was not functioning. The order dated 17.05.2020 does not mention anything regarding if employers have to pay salaries to their employees during lockdown. Therefore, from 18.05.2020 onwards the Central Govt. has practically removed the compulsion on employers to pay salaries during the lockdown.

However, in my opinion there is more to it.

Order dt. 29.03.2020 was passed u/s 10(2)(l) of Disaster Management Act, 2005 (‘DMA’). Section 10(2)(l) reads under;

“(2) Without prejudice to the generality of the provisions contained in sub-section (1), the National Executive Committee may-

(l) lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster;”

So, u/s 10(2)(l), the NEC has the power to lay down guidelines or give directions. A careful reading of the of the order dt. 29.03.2020 shows that it was directory in nature asking the State Governments/Departments to take measures including; directing employers to pay full salary during the period when the establishment was closed on account of lockdown.

In pursuance of the order dt. 29.03.2020, various State Government including Govt. of Maharashtra (GOM) released their own orders. Accordingly, GOM released a GR dt. 31.03.2020 u/s 24 of DMA, directing that;

All the workers ( Either on contract basis or outsourced workers / employees, temporary workers / employee or daily wage workers) working in private organisations , industries, companies, shops ( except essential services organizations) etc, who have to stay at their houses due to spread of covid – 19 virus shall be assumed to be on work and these workers/ employees shall be given complete salaries and allowances to which they are entitled to.

Labour Commissioners, especially in Mumbai & Pune have been issuing show cause notices referring to the said GR dt. 31.03.2020 of GOM to any employer which has; deducted salaries; adjusted leaves; terminated employees; laid-off employees; asked employees to go on unpaid leaves; during the lockdown. The show cause notice warn of action under DMA, if the GR is not strictly adhered to. Unions have also been taking up issues of employees citing the said GR dated 31.03.2020.

What has happened in Supreme Court

The In the matter of Hand Tools Manufacturers Association vs Union of India, the Hon’ble Supreme Court on May 15, 2020 issued notice to Central Government and ordered that ‘no coercive action shall be taken in the meanwhile’.

Although an organisation representing employers namely TWIN CITY INDUSTRIAL EMPLOYERS ASSOCIATION has approached the Hon’ble Supreme Court challenging the constitutionality of the GR dated 31.03.2020 as well. The Supreme Court has issued notice in the said matter on 15.05.2020 and the matter is currently subjudice.

Section 24 of DMA gives autonomy to States

The GR dt 31.03.2020 released by GOM does refer to the order of the NEC dt. 29.03.2020 but is passed under Section 24. The GR dt. 31.03.2020 focuses solely on payment of wages to employees of private organisations during lockdown, whereas the order dt, 29.03.2020 had given other directions as well, such as ensuring food and shelter to migrant workmen.

The wording of section 24 of DMA clearly shows that the State Executive Committee (State Govt.) has autonomy to lay down guidelines and issue directions and especially under clause (j), which reads as under;

“For the purpose of, assisting and protecting the community affected by disaster or providing relief to such community or, preventing or combating disruption or dealing with the effects of any threatening disaster situation, the State Executive Committee may—

(j) ensure that non-governmental organisations carry out their activities in an equitable and non-discriminatory manner;”

Although the GR dt. 31.03.2020 does not specify the exact sub clause under which it has been passed but there is no other subclause which comes closer than this. The phrase ‘non-governmental organisations’ may be considered by some as NGO. But for the sake of understanding we are assuming that the GR was passed u/s 24(j).

The scheme of DMA gives autonomy to State Govt. and even to local bodies, as they are more aware of the local conditions. Even in the order of the Central Govt. dt. 17.05.2020, it has been clearly stated that the State govt. cannot dilute the restrictions laid down by the Central govt. but can put in additional restrictions s may be deemed necessary.

Conclusion

GOM has not released its orders in respect of lockdown no. 4 after the Central Govt. passed the order dt. 17.05.2020. Therefore, unless GOM specifically repeals the GR dt. 31.03.2020, it would continue to remain valid in the eyes of law and employers would be under an obligation to pay full wages to employees who cannot attend to work because of lockdown. Maharashtra Govt. is likely to release its order on lockdown no.4 in a day or two, so it be would wiser to wait till then.