Dear All,
We are a small IT company based in Karnataka. During the current COVID-19 scenario, our client has postponed all projects, and therefore, there is no revenue, and the company is unable to pay salaries to employees.
In this scenario, is there a possibility of a layoff until the situation is back to normal? Are there any directions from the government in this regard?
Please advise.
From India, Bengaluru
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3We are a small IT company based in Karnataka. During the current COVID-19 scenario, our client has postponed all projects, and therefore, there is no revenue, and the company is unable to pay salaries to employees.
In this scenario, is there a possibility of a layoff until the situation is back to normal? Are there any directions from the government in this regard?
Please advise.
From India, Bengaluru
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Dear RD2018,
Can I presume that the "lay-off" mentioned in your post is not the termination resulting in the foreclosure of the contract of employment, but the "lay-off" defined under Section 2(kkk) of the Industrial Disputes Act, 1947? If it were so, you can follow the procedure mentioned in Section 25-C in case your company comes under Chapter V-A of the IDA, 1947.
The Government of India and State Governments have advised industrial establishments to pay wages for the period of lockdown. I hope you are aware of the concessions extended by the Employees' Provident Fund Organization (EPFO). The Reserve Bank of India (RBI) has announced certain measures in the form of a moratorium on the payment of EMIs for a consecutive period of 3 months.
From India, Salem
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Can I presume that the "lay-off" mentioned in your post is not the termination resulting in the foreclosure of the contract of employment, but the "lay-off" defined under Section 2(kkk) of the Industrial Disputes Act, 1947? If it were so, you can follow the procedure mentioned in Section 25-C in case your company comes under Chapter V-A of the IDA, 1947.
The Government of India and State Governments have advised industrial establishments to pay wages for the period of lockdown. I hope you are aware of the concessions extended by the Employees' Provident Fund Organization (EPFO). The Reserve Bank of India (RBI) has announced certain measures in the form of a moratorium on the payment of EMIs for a consecutive period of 3 months.
From India, Salem
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Dear Sir, I request to clarify the point mentioned by you above i.e concessions extended by the EPFO during COVID -19 period. Warm Regards Devashree N
From India, Pune
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From India, Pune
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Thank you sir for your reply. The company does not qualify under Chapter V-A and thereof not possible.
From India, Bengaluru
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From India, Bengaluru
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Dear Ms. Devashree,
Please check the following news update on EPFO benefits during the present COVID-19 scenario. You can access the article at https://economictimes.indiatimes.com...3.cms?from=mdr.
Thank you.
From India, Bengaluru
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Please check the following news update on EPFO benefits during the present COVID-19 scenario. You can access the article at https://economictimes.indiatimes.com...3.cms?from=mdr.
Thank you.
From India, Bengaluru
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Dear Members, May refer the attachment -notification from Ministry of Labour regarding not to terminate / reduce wages during lockdown. Hope will be useful. Regards Ram
From India, Chennai
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From India, Chennai
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Sir,
In view of the prevailing conditions of this pandemic, nowadays all of the business houses like industries, factories, shops, and other commercial establishments are locked down due to well-known reasons. To maintain equality among the society, the Government of India (GOI) has taken a wide decision enabling the employers/factory owners not to terminate the services of the employees working in their establishments/factories on the day of declaration of this lockdown. Accordingly, the GOI as well as respective state governments have issued directives and advice to all establishments not to deduct the salary of the employees working in the month of March 2020. However, this mandate will not be applicable to all such employees who have tendered their resignations prior to the declaration of the lockdown.
Now, in addition to the provisions stipulated under the Payment of Wages Act (PWA) and Minimum Wages Act (MWA), the GOI has enforced the provisions of the Disaster Management Act (DMA), which enables government agencies to direct all concerned to act in accordance with the provisions of the Disaster Management Act. Accordingly, you are bound to pay salary to the employees for the lockdown period. If you do not have sufficient funds to meet this requirement, it can be paid partially. However, the GOI has further clarified that employees can also claim their Employees' Provident Fund (EPF) accumulations equivalent to three months' salary as discussed earlier.
Thank you.
Regards,
R B Rao
From India, Gurugram
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In view of the prevailing conditions of this pandemic, nowadays all of the business houses like industries, factories, shops, and other commercial establishments are locked down due to well-known reasons. To maintain equality among the society, the Government of India (GOI) has taken a wide decision enabling the employers/factory owners not to terminate the services of the employees working in their establishments/factories on the day of declaration of this lockdown. Accordingly, the GOI as well as respective state governments have issued directives and advice to all establishments not to deduct the salary of the employees working in the month of March 2020. However, this mandate will not be applicable to all such employees who have tendered their resignations prior to the declaration of the lockdown.
Now, in addition to the provisions stipulated under the Payment of Wages Act (PWA) and Minimum Wages Act (MWA), the GOI has enforced the provisions of the Disaster Management Act (DMA), which enables government agencies to direct all concerned to act in accordance with the provisions of the Disaster Management Act. Accordingly, you are bound to pay salary to the employees for the lockdown period. If you do not have sufficient funds to meet this requirement, it can be paid partially. However, the GOI has further clarified that employees can also claim their Employees' Provident Fund (EPF) accumulations equivalent to three months' salary as discussed earlier.
Thank you.
Regards,
R B Rao
From India, Gurugram
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Thank you Yadav Sir. Yesterday, we got circular from EPFO office also. Regards Devashree N.
From India, Pune
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From India, Pune
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if employer himself does not earn and he is forced to ask the employee leave, will it be a crime under law. Does the circular put any penalty on employer for this. regards Puran
From India, New Delhi
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From India, New Delhi
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Thank you, Mr. Rao, for the detailed explanation. I have one query: if a company is already not earning much profit and, due to the shutdown of a manufacturing plant, it will not be able to bear the expenses, would it be acceptable to pay only a partial amount of salary?
Looking forward to your response.
From India, Lonavla
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Looking forward to your response.
From India, Lonavla
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Organizations can pay partial salaries if they are facing a severe financial crisis due to the lockdown. This may be observed in mid-sized and small-sized companies where revenue every month is crucial. There should be a mutual understanding between the employer and employee, and all dues should be cleared as soon as the situation is resolved. Everything should be transparent.
Regards
From India, Kolkata
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Regards
From India, Kolkata
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Yes, the government has issued a notification that no deductions should be made from wages. Such an instruction has its limitations, as no one can be compelled to do the impossible. The only option is to pay a uniform wage (not less than the living wage) to all employees, including those at the management level, during this period.
From India, Kochi
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From India, Kochi
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Sir,
Keeping in mind the points explained to you, if you do not have sufficient funds to pay the employees for the lockdown period, in this case, partial payment can also be made to the employees who were on the muster roll of the company on the day of the lockdown. The rest of the amount, after deducting the amount paid partially, is required to be paid at the earliest, most probably as the first priority upon receipt of the funds. However, the State Governments are stating to initiate legal actions against all such offenders under the provisions of the DM Act, 2005, whereas there is no such provision stipulated in the DM Act, 2005 enabling authorities to prosecute for non-payment of full wages/salary.
Thanks
Regards
R B Rao
From India, Gurugram
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Keeping in mind the points explained to you, if you do not have sufficient funds to pay the employees for the lockdown period, in this case, partial payment can also be made to the employees who were on the muster roll of the company on the day of the lockdown. The rest of the amount, after deducting the amount paid partially, is required to be paid at the earliest, most probably as the first priority upon receipt of the funds. However, the State Governments are stating to initiate legal actions against all such offenders under the provisions of the DM Act, 2005, whereas there is no such provision stipulated in the DM Act, 2005 enabling authorities to prosecute for non-payment of full wages/salary.
Thanks
Regards
R B Rao
From India, Gurugram
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Point for Consideration
Excerpt from the opinion below: The directions issued by the governments to employers to pay wages to all the workmen neither come within the framework of the DMA and EDA nor are backed by statutory law. What is also not clear is if any disputes get to court, what exactly could the outcome be. It would be most helpful if Legal Professionals in this group could clarify. Thanks in advance.
Link: https://www.thehindubusinessline.com...le31262286.ece
From India, Bengaluru
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Excerpt from the opinion below: The directions issued by the governments to employers to pay wages to all the workmen neither come within the framework of the DMA and EDA nor are backed by statutory law. What is also not clear is if any disputes get to court, what exactly could the outcome be. It would be most helpful if Legal Professionals in this group could clarify. Thanks in advance.
Link: https://www.thehindubusinessline.com...le31262286.ece
From India, Bengaluru
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Central and State governments have issued notifications stating that employers shall not terminate any employee during the lockdown period. Employees can only be terminated after following the due procedure of the law.
For more information, you can visit [https://lawcovid19.blogspot.com/](https://lawcovid19.blogspot.com/)
From India, Bengaluru
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For more information, you can visit [https://lawcovid19.blogspot.com/](https://lawcovid19.blogspot.com/)
From India, Bengaluru
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The DMA & EDA gives very wide powers to the Government to issue directions, orders, rules, and regulations. These laws could not envisage the specific measures that Government would have to take during an epidemic; hence, the wide powers under these laws. Additionally, the DMA has a provision (Section 72) which has an overriding effect on any other law in force.
https://lawcovid19.blogspot.com/
From India, Bengaluru
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https://lawcovid19.blogspot.com/
From India, Bengaluru
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Please suggest.
Can we terminate an employee who is going to complete her maternity leave in April and is seeking an extension of 2-3 months? We are considering this decision due to the company facing financial challenges and operating at a reduced capacity of 50%. We will contact her if any suitable openings arise in the future. This is an IT company. Can we proceed with this decision?
From India, Mumbai
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Can we terminate an employee who is going to complete her maternity leave in April and is seeking an extension of 2-3 months? We are considering this decision due to the company facing financial challenges and operating at a reduced capacity of 50%. We will contact her if any suitable openings arise in the future. This is an IT company. Can we proceed with this decision?
From India, Mumbai
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Dear Seniors,
In this situation, when manufacturing units and projects are shut down, it is very difficult for companies to pay employees or workmen. Practically, it is challenging to pay salaries to the employees, and for their livelihood, it is tough for the laborers or workmen to survive.
In this scenario, please suggest how HR can advise the management on the amount to release as salary.
Thanks,
Ram Prajapati
From India, Delhi
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In this situation, when manufacturing units and projects are shut down, it is very difficult for companies to pay employees or workmen. Practically, it is challenging to pay salaries to the employees, and for their livelihood, it is tough for the laborers or workmen to survive.
In this scenario, please suggest how HR can advise the management on the amount to release as salary.
Thanks,
Ram Prajapati
From India, Delhi
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There are benefits that you can avail from the government:
- 3 Months of PF will be paid by the government.
- The government has deferred the payment of ESI/PF, which creates short-term liquidity for you.
As per the MHA directions, you cannot lay off or terminate employees during the lockdown period.
[Link to source](https://lawcovid19.blogspot.com/)
From India, Bengaluru
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- 3 Months of PF will be paid by the government.
- The government has deferred the payment of ESI/PF, which creates short-term liquidity for you.
As per the MHA directions, you cannot lay off or terminate employees during the lockdown period.
[Link to source](https://lawcovid19.blogspot.com/)
From India, Bengaluru
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Dear Concern,
I would like to submit that you will have to seek permission under Section 25 M from the competent authority for the lay-off. Since the national lockdown has been declared from 23/03/2020, the Disaster Management Act and Epidemic Disease Act are in force, superseding all applicable labor laws.
You are only considering the Industrial Dispute Act and ignoring the Disaster Management and Epidemic Disease Act. According to government orders, all private sectors are restricted from terminating employment and reducing wages.
Considering all the points above, your management will contravene the Disaster Management Act, Epidemic Disease Act, and the Industrial Dispute Act, leading to legal action against the company.
Senior member, please correct me if the narration is wrong.
From India, Nagpur
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I would like to submit that you will have to seek permission under Section 25 M from the competent authority for the lay-off. Since the national lockdown has been declared from 23/03/2020, the Disaster Management Act and Epidemic Disease Act are in force, superseding all applicable labor laws.
You are only considering the Industrial Dispute Act and ignoring the Disaster Management and Epidemic Disease Act. According to government orders, all private sectors are restricted from terminating employment and reducing wages.
Considering all the points above, your management will contravene the Disaster Management Act, Epidemic Disease Act, and the Industrial Dispute Act, leading to legal action against the company.
Senior member, please correct me if the narration is wrong.
From India, Nagpur
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Dear Umakanthan Sir,
We are all aware of the concession of PF, but there are certain criteria that a company should meet to avail this condition. So please do not assume that all companies are able to benefit from it.
For example, my company is not meeting the criteria required for availing the EPFO concession, so we as a company need to bear the cost.
Here, everyone is thinking from an employee's perspective. Being a devil's advocate, has anyone imagined the plight of small companies, entrepreneurs, and shop owners? No concession has been provided to them by the government. They still have to bear fixed costs such as rentals if the business space is rented, electricity bills, telephone bills, and other expenses that one has to bear even if the company is not generating revenue. We should not forget that they do not have much reserve funds.
It's high time all of us think about their plight as well.
Thanking You,
Neha Bhardwaj
From India, Mumbai
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We are all aware of the concession of PF, but there are certain criteria that a company should meet to avail this condition. So please do not assume that all companies are able to benefit from it.
For example, my company is not meeting the criteria required for availing the EPFO concession, so we as a company need to bear the cost.
Here, everyone is thinking from an employee's perspective. Being a devil's advocate, has anyone imagined the plight of small companies, entrepreneurs, and shop owners? No concession has been provided to them by the government. They still have to bear fixed costs such as rentals if the business space is rented, electricity bills, telephone bills, and other expenses that one has to bear even if the company is not generating revenue. We should not forget that they do not have much reserve funds.
It's high time all of us think about their plight as well.
Thanking You,
Neha Bhardwaj
From India, Mumbai
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COURT CASES LOOM:
1. The Maharashtra government has allegedly lost a case in court regarding the compulsory payment of wages. The order copy is awaited! https://www.barandbench.com/news/lit...mpany-moves-sc
2. There is also a case in the Punjab High Court by a group of SMEs who are seeking relief, as indicated by Neha Bharadwaj, ma'am.
Can any Legal Professional please help this thread by providing verifiable links to the two court cases mentioned above? Thanks in advance for your assistance.
From India, Bengaluru
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1. The Maharashtra government has allegedly lost a case in court regarding the compulsory payment of wages. The order copy is awaited! https://www.barandbench.com/news/lit...mpany-moves-sc
2. There is also a case in the Punjab High Court by a group of SMEs who are seeking relief, as indicated by Neha Bharadwaj, ma'am.
Can any Legal Professional please help this thread by providing verifiable links to the two court cases mentioned above? Thanks in advance for your assistance.
From India, Bengaluru
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Hi,
In case an employee was on unauthorized leave from mid-March 2020, i.e., before the lockdown, and on April 5th, he says he was on medical rest but fails to show medical documents, can such an employee be terminated?
Please let me know if you need any further assistance.
From India, Bengaluru
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In case an employee was on unauthorized leave from mid-March 2020, i.e., before the lockdown, and on April 5th, he says he was on medical rest but fails to show medical documents, can such an employee be terminated?
Please let me know if you need any further assistance.
From India, Bengaluru
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Dear All,
Good morning.
This is the burning issue of today: the employer is stating that they are unable to give salary due to financial crises resulting from the cancellation of new and upcoming projects due to the lockdown. However, as per the Government Advisory, the employer is obligated to pay salaries, as the government is now providing benefits to employers in this regard, such as EPF contributions, etc.
Post-lockdown, any audits on this matter will be conducted by government bodies, and any company found not following the Government Advisory will face difficulties.
Regards
From India, Pune
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Good morning.
This is the burning issue of today: the employer is stating that they are unable to give salary due to financial crises resulting from the cancellation of new and upcoming projects due to the lockdown. However, as per the Government Advisory, the employer is obligated to pay salaries, as the government is now providing benefits to employers in this regard, such as EPF contributions, etc.
Post-lockdown, any audits on this matter will be conducted by government bodies, and any company found not following the Government Advisory will face difficulties.
Regards
From India, Pune
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Hi there.
Layoffs during COVID-19 are common in many countries. Most companies have gone bankrupt. The fast, cheap essay writing service is being kept afloat thanks to students. They have no time to write all papers themselves and often order essays from Affordable Papers at https://www.affordablepapers.com/. My advice to all people who have writing skills but were laid off is to try writing papers "on order". By the way, you should make use of all benefits during the current COVID-19 scenario and find a way out.
Good luck.
From Netherlands, Amsterdam
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Layoffs during COVID-19 are common in many countries. Most companies have gone bankrupt. The fast, cheap essay writing service is being kept afloat thanks to students. They have no time to write all papers themselves and often order essays from Affordable Papers at https://www.affordablepapers.com/. My advice to all people who have writing skills but were laid off is to try writing papers "on order". By the way, you should make use of all benefits during the current COVID-19 scenario and find a way out.
Good luck.
From Netherlands, Amsterdam
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For employee termination during lockdown/covid-19 related issues, please refer to the following link: https://www.citehr.com/620431-employ...ny-during.html
From India, Hyderabad
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From India, Hyderabad
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In response to @anonymous, what does your policy say with regards to sick leave ( an unauthorized one for that matter)?
From Nigeria, Lagos
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From Nigeria, Lagos
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I think this video will help solve a lot of doubts. It is by a professor from Tata Institute of Social Sciences, NS Iyer.
[Link to video: https://www.youtube.com/watch?v=QIav26A_S4g]
Download his presentation from here: [https://headsupcorporation.com/webinar]
From India, New Delhi
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[Link to video: https://www.youtube.com/watch?v=QIav26A_S4g]
Download his presentation from here: [https://headsupcorporation.com/webinar]
From India, New Delhi
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Okay. As per previous instructions, all IT companies have certain exemptions under all labor acts. Certain guidelines have already been given to all states by the central government to encourage and facilitate IT companies in India. In Andhra Pradesh and Telangana states, exemptions have been granted to IT companies regarding duty timings, gratuity payments, shop licenses, and removing norms. Therefore, please proceed with your state labor department proceedings.
Certainly, you should agree on an amount that is comfortable for both parties.
From India, Nellore
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Certainly, you should agree on an amount that is comfortable for both parties.
From India, Nellore
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Certainly! Here is the corrected and properly formatted text:
Ya, ok sir. As per previous instructions, all IT companies have certain exemptions under all Labour Acts. Certain guidelines have already been given to all states by the central government to encourage and facilitate IT companies in India. In Andhra Pradesh and Telangana states, exemptions have been granted to IT companies regarding duty timings, gratuity payments, shop licenses, and regulatory norms. So please proceed with your state labor department proceedings.
Certainly, you should agree on an amount that is comfortable for both parties, which is beneficial for humanitarian grounds and natural justice. Please.
From India, Nellore
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Ya, ok sir. As per previous instructions, all IT companies have certain exemptions under all Labour Acts. Certain guidelines have already been given to all states by the central government to encourage and facilitate IT companies in India. In Andhra Pradesh and Telangana states, exemptions have been granted to IT companies regarding duty timings, gratuity payments, shop licenses, and regulatory norms. So please proceed with your state labor department proceedings.
Certainly, you should agree on an amount that is comfortable for both parties, which is beneficial for humanitarian grounds and natural justice. Please.
From India, Nellore
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