Labour Law & Hr Consultant
R B Yadav
Advocate & Management Consultant On Labour
[email protected]
Retired Government Servant/advocate
Deputy Commissioner Of Labour..a.p.
Ram Mohan Prajapati
Senior Member Hr
Advocate, Pune , Maharashtra
Devashree N
Gm- Training & Hr
+2 Others

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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 layoff until the situation is back to normal? Are there any directions from the government in this regard?
Please advise.

From India, Bengaluru
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 u/s 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 GOI and State Governments have advised the industrial establishments to pay wages for the period of lock down. Hope you are aware of the concessions extended by the EPFO. The RBI has announced certain sops in the form of moratorium on payment of EMI for a consecutive period of 3 months.

From India, Salem
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
Thank you sir for your reply. The company does not qualify under Chapter V-A and thereof not possible.
From India, Bengaluru
Dear Ms. Devashree,
Please check the following news update on EPFO benefits during the present COVID -19 scenario.

From India, Bengaluru
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

Attached Files
File Type: pdf 20200320_Advisory MinistryOfLabour-Not To Terminate-EmployeesOrReduceWages.pdf (831.7 KB, 1067 views)

In view of the prevailing conditions of this pandemic, nowadays all of the business houses like industries, factories, shops & other commercial establishments are lock down due to the well known reasons, to maintain the equality among the society, the 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 lock down, accordingly the GOI as well as SG has issued directive and advises to all of the establishment not to deduct the salary of the employees working in the month of Mar, 202o. However, this mandate will not applicable upon all such employees who have rendered their resignations prior to declaration of the lock down. Now in addition to the provisions as stipulated under the PWA and MWA, the GOI has enforced the provisions of DMA (Disaster Management Act) which enable Government agencies to direct all of the concern to act upon according to the provisions of Disaster Management Act. Accordingly, you are bond to pay salary to the employees for the lock down period. If you are not having with sufficient funds to meet with this requirement, it can be paid partially. However, the GOI has further clarified that employees can also claim their EPF accumulations equalant to 3 months salary as discussed earlier.
R B Rao

From India, Mumbai
Thank you Yadav Sir. Yesterday, we got circular from EPFO office also. Regards Devashree N.
From India, Pune
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
Thanks Mr. Rao for detail explanation.
I have one query, if a Company is already not earning much profit and due to shutdown of manufacturing plant it will not able to bear the expenses, in that case will it be fine to pay only partial amount of salary?
Looking forward for your revert.

From India, Lonavla

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