COVID-19 Lockdown Wages: Should Employers Pay for April 1-14, 2020? Seeking Advice

Dear All,

As per the Central Government's notification, most employers paid their employees the full month's wages (up to 31.03.2020) during the 21-day lockdown period due to COVID-19.

I have a query: what about the wages for the further lockdown period from 01.04.2020 to 14.04.2020? Should the employer pay the salary for this period? Please suggest.

Thank you.

Legally speaking, GOI has asked all employers to make payments to their employees. No doubt there will be problems and a lack of cash inflow, but the situation is not normal, and all have to sacrifice and tighten their belts.

Remember, when you pay your employees for this period, they will have a sense of loyalty and gratitude to the employer. Hopefully, after COVID (which is a matter of time), employees will work sincerely and in a motivated manner to make up the losses of the employer.

Dear Sherkhan,

Attached is the Circular No. 51/2020 dated 07-04-2020 from the Karnataka Employers' Association (KEA). Although issued by KEA, the contents are applicable to employers in all states. The contents are self-explanatory.

Additionally, you may go through the following link: https://www.citehr.com/618687-legal-...vid-virus.html

Thanks,
Dinesh Divekar

Dear Sherkhan, the outbreak of COVID-19 has become a global disaster. Even the economically and scientifically advanced countries find it hard to contain the epidemic under manageable limits. That's why the Government of India has issued directions to pay full wages for the lockdown period to employees under its powers vested in the Disaster Management Act, 2005, and the State Governments invoking the provisions of the Epidemic Diseases Act, 1897. As it is, such directions have an overriding effect on corresponding provisions of any existing laws that are inconsistent as per sec. 72 of the DMA, 2005. Only the Supreme Court or High Courts have the jurisdiction to decide the legality of such directives issued under the Act.

The imposition of nationwide lockdown and the instructions of the Governments in its wake are temporary measures only. It's anybody's guess that no employer can pay his employees full wages without work in a situation of indefinite lockdown of the entire business, and the Government, as the largest employer, is also aware of it. The need of the hour is to help maintain the millions of masses losing their livelihood at least at the subsistence level.

Dear Sir,

It is okay; we can pay our staff. However, will it fall under the category of salary or other payment? If we pay as another form of payment, it should not attract other statutory obligations like PF, ESIC, and PT, as factories are closed without any work. Therefore, it should not attract other legal provisions.

Kindly advise.

Regards,
Sadanand Waman Laghate
Anand Manpower Agency
9823720844
sadanand.laghate@gmail.com

Section 72 of the Disaster Management Act

Here is my take on this. Section 72 of the Disaster Management Act states that "the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act." This Act does not supersede every other Act. If this Act has provisions similar to the ones in any other Act, the ones contained in this Act would prevail. There is no provision in the Disaster Management Act regarding the payment of wages during a disaster.

Order from the Ministry of Home Affairs

The Ministry of Home Affairs (MHA) of the Government of India issued an order on 29th March, which, inter alia, makes it mandatory for employers to pay wages to their workers on due dates without making any deduction for the closure of their units consequent to the lockdown. This Order has been issued by invoking Section 10(2)(l) of the Disaster Management Act 2005. The impugned Section gives powers to the Central Government to "(l) lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments, and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster." No amount of legal ingenuity can take the above clause to mean that the MHA can advise private sector industries and commercial establishments to pay wages during the closure period. The stated objective of the Act is "to provide for the effective management of disasters and for matters connected therewith or incidental thereto." The only conclusion that one can draw is that this Order has been issued more as a means to project the government as the guardian of the poor who would suffer extreme hardships because of the lockdown. At best, it can be considered as an effort on the part of the government to nudge those industries who are unsure about the liability to pay wages to err on the generous side. Considering the nature and extent of the calamity, it is possible that there may be more industries willing to pay than not, especially on the first pay-day post lockdown.

State Government Notifications and the Epidemic Diseases Act

The State governments, on their part, have also issued a number of notifications of their own invoking The Epidemic Diseases Act 1897 to deal with COVID-19. Every state has imposed its own restrictions on the movement of people and goods as they deemed fit. However, there is no provision to be found even in this Act to force the industry to pay full wages to the workmen during the closure period.

Section 25C of the Industrial Disputes Act 1947

However, Section 25C of the Industrial Disputes Act 1947 comes to the rescue of the workmen in the case of natural calamities. It permits the employer to lay off workmen by paying 50% of the wages.

There is one caveat, however. The comments above are not to find valid arguments to deny wages to the poorer sections in society who are affected by the disaster. Good intentions must be backed up by a robust legal framework to ensure equitable delivery.

The question of the hour

The question of the hour is whether employers need to pay salaries to their employees for no work carried out during the lockdown period.

Employers have "a moral obligation" to pay wages/salaries or ex gratia to meet the economic crisis faced by the downtrodden laborers. This is also clarified by the government. Payment of wages/salaries in normal circumstances is a contractual and statutory obligation of the company. Similarly, payment of salaries/wages during the lockdown period to employees/workers is a moral obligation of the employers, as the employees have no alternative source of employment or livelihood during this period of lockdown. Similarly, payment of wages to temporary, casual, or daily wage workers during the lockdown period is a part of the moral/humanitarian/contractual obligation of the company.

"Moral obligation" cannot be imposed on parties by law from a legal point of view. "Law does not impose any moral responsibility on any party. It is the action of the parties that determines morality," as a legal expert opined. "A statutory obligation, on the other hand, is universal and can be enforced by the court."

Further, MCA (Ministry of Company Affairs) also clarified that payment made to employees or casual workers during the lockdown will not qualify for CSR expenditure, but ex gratia paid over and above salary will qualify as CSR.

Thanks