The Supreme Court of India on Friday stayed the operation of a Ministry of Home Affairs circular asking employers to pay full wages to workers amid the coronavirus induced lockdown.
Additionally, Supreme Court asked the State and Centre not to prosecute any private firms, factories, etc over non-payment of wages. The Centre has sought time to reply and SC said no coercive action will be taken until next week.
SC's order comes two weeks after it had granted time to the Centre to respond to the pleas challenging its decision asking employers to pay full wages to their workers during the lockdown imposed to contain spread of COVID-19.
A bench of Justices N V Ramana, Sanjay Kishan Kaul and B R Gavai, in a hearing conducted through video conferencing, on Monday heard counsel for three private firms including Nagreeka Exports Limited and Ficus Pax Private Ltd against notifications of the Ministry of Home Affairs asking them to pay full wages to employees during lockdown.
"Solicitor General (Tushar Mehta) submits that he wants to file a response to these writ petitions. List after two weeks," the bench said in its order.
The top court asked the private firms to supply copies of their applications to the Solicitor General through e-mail.
Textile firm 'Nagreeka Exports Limited, one of the petitioners, has sought quashing of the government order asking employers to pay full salary to staff, contract workers, casual workers and other workers during the corona virus lockdown, even though factories are not operational.
The firm engaged in manufacture and export of cotton yarns, fabric & textiles, stated in its plea that because of stoppage of operations since the lockdown, it has suffered losses to the tune of Rs.1.50 crore till the filing of the plea.
"On top of that, as per the said orders dated March 29, 2020 and March 31, 2020, Petitioner had to disburse full salaries to all its employees on its payroll, which amounts to approximately Rs.1.75 crores," the petition said.
The plea has challenged the constitutional validity of Government Order dated March 29, 2020 issued by MHA only to limited extent being that "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. "
It has also challenged subsequent Government Order dated March 31, 2020, issued by Maharashtra government, only to the limited extent of compelling the petitioner to pay full salary to all its staff, workers, contract workers, casual workers during the period of lockdown, when its factories are not operational.
The petition has sought to adjudicate whether the Centre and Maharashtra government is empowered to issue direction to private establishment, like the petitioner, to pay 100 per cent wages under Disaster Management Act, 2005.
The textile company said that with the lockdown now being extended, its losses will be multiplied and if it has to follow the government orders in their entirety, its business will become unsustainable.
The orders will have "more far reaching consequences, affecting the livelihood of more people", the plea said.
The plea states that the government orders passed by the MHA and the Maharashtra government are "illegal, unconstitutional" and violative of Articles 14 and 19 of the Constitution of India.
The petitioner has asked the Court to set aside both the Centre's order and the order by the Maharashtra government to the extent that payment of full salaries were mandated.
The plea further prays that during the pendency of the plea, the petitioner be allowed to pay only 50 per cent of the salaries to its workers.
