No coercive action against Punjab Association: Supreme Court

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’.

Hand Tools Manufacturers Association, is an association of around 52 members, which constitutes of sole proprietorship firms, partnership firms and private limited companies, engaged in the manufacturing and distribution of the hand tools.  Association by filing writ petition under Article 32 of the Constitution of India challenged the validity and vires of section 10(2)(l) of the Disaster Management Act, 2005  and seeking an appropriate writ for setting aside or quashing of Government Order dated March 29, 2020 issued by Ministry of Home Affairs, Government of India, under Section 10(2)(l) of the Disaster Management Act, 2005, only to the limited extent wherein the private establishments are directed to pay full salaries to all workers/employees, contract or casual workers during the period of COVID-19 lockdown. The petition is filed on May 7, 2020 by Advocate Krishan Kumar. The matter was listed before a three-judge bench of Justice Nageswara Rao, Justice S. K. Kaul and Justice B.R. Gavai.

Senior Advocate Jamshed Cama along with Advocate Abhay Nevagi appeared for the Association and argued that the companies are running out of work due to lock down and it is impossible for them to keep on paying full wages to its employees. On this the Bench posed a question to Mr. Tushar Mehta, Solicitor General, appearing for the respondents, that for how long the government can expect companies to pay full salaries to its employees. Mr. Mehta sought time to file reply.

Apart from this petition, other petitions which are filed seeking similar reliefs like Ficus Pax Private Limited vs Union of India, Ludhiana Hand Tools Association vs Union of India and  Twin City Industrial Employers Association vs Union of India were also listed. The latter petition also challenges the Government Order dated March 31, 2020 issued by Government of Maharashtra directing the private establishments to pay full wages to its employees. In all these petitions, Hon’ble Court was pleased to issue notices and matters are adjourned for a week.

Interestingly, another petition filed under Article 32 of the Constitution of India, by National Information Technology Employees Senate, a Pune based union espousing the interest of IT employees, was dismissed by Supreme Court on May 15, 2020. In this petition, wherein all the state governments are impleaded as respondents, directions were sought by the petitioner for initiation of action under section 51 and 58 of Disaster Management Act, 2005 against all the companies who are in breach of orders/circulars/ advisories dated March 20, 2020 issued by Ministry of Labour and Employment and Government Order dated March 29, 2020 issued by Ministry of Home Affairs. Petitioner had sought enforcement of rights of various employees in various public and private sector undertakings across the country under Article 14, 19(1)(g) and 21. The dismissal of this petition is of great relevance for all the employers. It can be contemplated that even the apex court is mindful of the fact that during these difficult times it is impossible for the employers to keep paying full wages to its employees, more particularly, when the future of the organisations is highly blurred. Also, it is essential to factor in the fact that the pandemic situation is indefinitely time lined.

In light of this interim relief order passed by Supreme Court, it can be reasoned that the show cause notices/orders issued by the various state governments against companies which are unable to comply with the MHA Order dated March 29, 2020 and respective, state government orders passed pursuant to the said order, due to its financial difficulties as a consequence of ongoing pandemic, are required to be kept in abeyance till further orders are passed by Supreme Court in these matters.