Employers of private companies won’t be prosecuted for non-payment of full wages during lockdown

May 15: The Supreme Court on Friday asked the government not to take any coercive action till next week against the companies and employers who are unable to pay full wages to their employees during the nationwide lockdown due to the coronavirus pandemic. The order came on petitions challenging the validity of the Ministry of Home Affairs (MHA) notification mandating payment of full wages to workers during the COVID-19 lockdown.

The Supreme Court stayed the MHA order while hearing various petitions filed by companies including Ludhiana Hand Tools Association and Ficus Pax. They sought the quashing of the MHA’s circular and blamed the government of passing such orders without due care and deliberation on the financial implications for the employers. The petitioners warned that making such payments will lead to the closure of many of the units and which in turn will cause permanent unemployment and will adversely affect the economy.

A bench of Justices LN Rao, SK Kaul and BR Gavai, hearing multiple petitions on the issue through the video conferencing, observed that the Ministry of Home Affairs (MHA) circular of March 29, directing companies to make payment of full wages to workers, was an omnibus order and there was a larger question involved which needs to be answered.

“How long can the government expect companies to pay?” the Bench wondered and went on to pass the interim order after Solicitor-General Tushar Mehta sought further time to respond to the petitions.

“No coercive action shall be taken in the meantime,” a Bench headed by Justice LN Rao said while issuing notice to the Centre on petitions filed by the Indian Jute Mills Association and an association of factory owners from Punjab. The Supreme Court asked the government to respond to the petitions within a week.