Employee shall be on duty on the date when lockdown was announced to claim benefit of MHA order dated 29.03.2020: Bombay High Court

In a recent decision of Bombay High Court in the matter of Premier Employees Union vs M/s. Premier Limited, pronounced on July 13, 2020, it was held that Ministry of Home Affairs Order dated March 29, 2020 and Government of Maharashtra Resolution dated March 31,2020 will not be applicable to cases where cause of action for issue of non-payment of salary/wages and suspension of work arose before the date when lockdown was announced.

Brief background of the case:

Premier Employees Union vs  (‘Union’), espousing the interest of permanent workers of  M/s. Premier Limited (‘Company’), instituted a writ petition before Bombay High Court seeking a direction to the State of Maharashtra and Commissioner of Labour to ensure that workers of Company are paid wages during the lockdown period in terms of order dated March 29, 2020 passed by Ministry of Home Affairs, Government of India; order of Department of Industries, Energy and Labour, Government of Maharashtra dated March 31, 2020 and order dated March 20, 2020 passed by the Industrial Court,  Pune in Complaint (ULP) No.32 of 2020 between Premier Employees Union Vs. M/s. Premier Limited. Union also sought direction to the District Collector, Pune and Deputy Commissioner of Police, Pimpri-Chinchwad to initiate appropriate proceedings against the Company under the Disaster Management Act, 2005 for failure to comply with the government orders. Company also filed a cross petition challenging the order passed by the Industrial Court, Pune.

It was the case of the Union that the Company has not paid wages and dues of the workers of the Company since May, 2019 including payment towards the legal dues, such as, employers’ provident fund contribution, gratuity of retired employees and renewal payment of medi-claim insurance premium. On March 3, 2020, Company issued a notice addressed to all workmen and staff stating that management of the Company has decided to suspend the operations of the Company with immediate steps.

On March 20,2020, Industrial Court, Pune while passing an interim order in an application filed by Union found that the Company did not follow proper procedure while issuing the notice of suspension of operations and arrived at that the conclusion that the Company had committed unfair labour practice. Hence, directed the Company to pay wages to the workmen w.e.f. March 1, 2020 on or before the tenth day of each month. Inspite of the order, Company has failed to make any payment to the workmen.

By an interim order dated June 2, 2020, HC directed the Company to comply with the direction of Industrial Court before June 5, 2020. Company challenged the interim order by SLP in Supreme Court and SLP was dismissed.

It was the case of the Company that due to non-cooperation and agitation caused by the Union, certain customers of the Company withdrew their orders and this lead to serious losses to the Company. This prevented the Company from payment of salary/wages to employees and workers on regular basis post May, 2019. Hence Company was constrained to issue notice on March 3, 2020 declaring suspension of operations due to severe overall economic downturn, financial crisis due to which the banks had withdrawn normal credit facilities and other circumstances beyond the control of the Company. This shutdown was not only for the workmen but also for the staff and officers of the company

Issue before the Court:

Whether central government order and the Maharashtra government resolution can be invoked in a situation where the management and workmen are engaged in an industrial adjudication relating to non-payment of salary/wages and suspension of work much prior to closure of the establishments due to the lockdown or where the related cause of action arose prior to the lockdown?

Observations of the Court:

Court observed that:

  • MHA order dated March 29, 2020 contemplates that all categories of employers shall ensure that during the period their establishments are closed due to the lockdown, wages are paid to their workers at their workplaces on the due date without any deduction.
  • Government Resolution dated March 31, 2020 of the Government of Maharashtra, contemplates that all categories of workers, be it contractual, outsourced, temporary or daily wage basis, working in private organisations, industries, companies, shops (except those dealing with essential services) etc. who are confined to their homes due to the lockdown shall be deemed to be on duty and they shall be paid their full salary / wages and allowances to which they are entitled to.
  • Sum and substance of the related measures, by central government and the Maharashtra government would show that these have been issued to meet the situation arising out of the lockdown, is that the employers shall pay full salary / wages to their employees / workers during the period when their establishments were closed because of the lockdown. Such payment shall be made at the workplace and on the due date without any deduction. For this period, the employees / workers shall be deemed to be on duty.
  • During forced closure of establishments during lockdown, be it industrial or commercial, the principle of no work no pay shall have no application.
  • Claim of the workmen to wages will not be covered by the central government order and the Maharashtra government resolution. The measures introduced by central and state government orders would cover a situation where an employee / worker was in employment as on the day the lockdown was declared and had received salary / wages for the previous month i.e., the month immediately preceding the lockdown. This measure was introduced to ensure maintenance of status quo with regard to payment of salary / wages and employment.
  • To be deemed to be on duty one should be on duty on the date when the lockdown was declared. To be entitled to or for continuity of salary / wages during the lockdown, an employee / worker should receive the same till the month which is previous to closure on account of the lockdown.
  • When there is an ongoing industrial adjudication pertaining to claim of the workmen to wages, the claim to wages would be subject to such adjudication. The central government order and the Maharashtra government resolution cannot be invoked to short circumvent an industrial dispute which is being adjudicated upon before the competent forum.
  • Court also reiterated that jurisdiction under Article 226 is plenary and this power cannot be restricted only because there is an alternate remedy available. Court further held that Article 226 being a constitutional provision does not impose any restriction or limit on the High Court. Interestingly, Court opined that available of alternate remedy does not mean that the writ petition under 226 is not maintainable.

In light of the above observations, Court held that Union is not entitled to the benefit of the central government order and the Maharashtra government resolution. Taking a view that workers are not paid wages from May, 2019 and their employment is not disturbed by suspension order dated March 3, 2020 and after considering the poor financial condition of the Company and importance of survival of the Company for both management and workmen, Court aimed to strike a balance between the two claims. In light of this, interim order of Industrial Court was modified with a direction to the management to pay 50% of the full monthly wages to the workmen with effect from 01.03.2020 till disposal of Complaint (ULP) No.32 of 2020.

To can be safely concluded that the HC has rightly held that employee who wants to take benefit of MHA order dated March 29, 2020 is required to show that on the date of lockdown i.e. March 24, 2020, he was in the employment of the employer from whom he is claiming full wages or against whom he has alleged wrongful termination. If he fails to satisfy on these points, the said MHA order will be of no assistance to such employee.