Legality of Mandatory Salaries to Employees Amidst Lockdown

COVID-19 is a global public health crisis and the world is going through very tough times. COVID-19 is one of the deadliest and most easily spread virus that mankind has seen so far and there is no vaccine available. Owing to spread of the virus in India, the Government responded with a nationwide lockdown and invoked its power under section 10(2) (I) of the Disaster Management Act, 2005 with the exception of essential services that have been allowed to continue. All the non-essential businesses and facilities were asked to shut down for a period of 21 days starting from 24th of March to 15th of April. The Government issued guidelines and mandated all the industry owners, schools, shops and establishments to pay salaries to their workers without any deduction during this period.

Introduction  

Imposing a lockdown was the only option that the government deemed fit in this crucial time to save lives. As soon as our government took this step of nationwide lockdown, the workers, labor class and migrant laborers started leaving for their homes leading to a huge exodus. They were worried of running out of food. Mass departures increased the risk of spreading the virus. In order to prevent further infection due to mass gatherings of labourers and to mitigate the economic hardship, guidelines were issued by the government mandating employers to pay full wages to the employees.

Additionally, to ensure that people who are not working due to social distancing will need monetary support to feed their families, the government directed states and union territories to take measures and ask them to ensure that all employers, be it industry owners, shopkeeper, or any other employer give full salaries to their employees amid lockdown. The government took them in confidence by stating that they will get paid even if no work was carried out. These guidelines by the authorities created a state of great panic amongst the employers. They argue that they are unable to pay the wages in question since there is no income being generated due to the fact that manufacturing is not operational.

It is very difficult for a small business or establishment to give full wages to their employees without work being done. Moreover, no subsidy or relief has been provided by the government to meet the wage liability during this lockdown period. The order also stated that if any worker took any leaves, he should be deemed to be at work without any wage cut. Furthermore, the employers have to pay the wages on the due date, no extension has been given to the employers to pay the wages.

Power of the Government

The Industrial Disputes Act, 1947 allows a “lay-off” in situations where an employer is unable to pay the wages in the times of natural calamities. But this order by the government mandates all the employers to pay full wages. The Government defended itself by saying that the Disaster Management Act overrides the Industrial Disputes Act and as per section 72 of the former, the order passed shall prevail over any other existing laws. Section 72 is a non-obstante clause giving overriding powers to the government in times of a disaster. But we should not lose sight of the fact that neither the Disaster Management Act, 2005 nor the Epidemic Diseases Act, 1897 mandates anyone to pay wages in times of disaster or natural calamity. The order issued by government neither comes within the framework of DMA and EDA nor is backed by any other law.

This order of paying full wages completely ignored the rights of employers and failed to note that a situation like COVID-19 is adversely affecting both the employer and employee. Fundamental right of practice any occupation, trade or business under Article 19 of the constitution seems to be suspended during lockdown. It further appears to be in derogation to Article 14 of the Constitution of India which protects a person’s right to equal protection of laws. (Gopalan, n.d.)

The Disaster Management Act was enacted to have a unified command over managing disasters. Paying wages has no mention in the Act and by reading its provisions, one could definitely say that there is no power vested with either state or central government to mandate employers to pay the full wages during a disaster despite work being non-operational. In the same way, the objective of Epidemic Act was to prevent the spread of an epidemic. Under this Act, both the state and centre have the power to legislate for controlling the spread of the epidemic. It, however, does not come under the ambit of Epidemic Act to mandate employers to pay their workers. Section 2 of Epidemic Act says that the government can prescribe measures to prevent the outbreak of such disease or the spread thereof. The same does not give power to the government to mandate the employers to pay full wages. (Chatterji, n.d.)

These are the two enactments based on which the governments have been issuing directions. Given the provisions of both the Acts and the language of the sections as analysed above, there is no statutory provision to support the directions of the Central or State government with reference to payment of wages.

Conclusion

While the intention of the government appears to be noble, the measures adopted are not adequate to tackle the problem. The need of the hour is a dedicated framework in the form of monetary subsidies similar to the ones declared by governments across the globe. The government of India should come up with a scheme to subsidise employers to provide an impetus towards paying wages during the lockdown. Without any relief and subsidies offered by the government, these types of mandatory guidelines would put them in hardships and probably even bankrupt them.

The author believes that it should not be a mandate for the employers and should be left to them to handle the situation as they deem fit. They should have a free choice to decide whether to pay 50%, 75% or even nothing. There are disagreements over moral obligation and statutory obligation between various ministries. As the lockdown has been extended it is likely that most businesses across the country would be severely impacted. In such a situation it would neither be prudent nor fair to further direct an employer to continue paying wages to its workers. The government in the recent 20 lakh crore package did not even talk about the wages of the workers and expects every employer to pay. The government would have come up with a package and should take into serious consideration subsiding the wage cost for the lockdown period at least in part if not in entirety.


(1) Cherian, M. C. (2020). mondaq. Retrieved from mondaq: https://www.mondaq.com/india/employment-and-workforce-wellbeing/929816/payment-of-wages-during-period-of-lockdown-implemented-to-contain-COVID-19?signup=true

(2) CHATTERJI, U. (n.d.). Retrieved from the leaflet: https://theleaflet.in/right-to-wage-during-lockdown-due-to-COVID-19/

(3) Gopalan, A. (n.d.). Retrieved from the hindu: https://www.thehindubusinessline.com/opinion/what-are-the-legal-obligations-to-pay-wages-during-a-lockdown/article31262286.ece

Satyam Batra from Institute of law, Nirma University

editor: vatsala sood

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: