Centre's U-turn on wages in lockdown, tells SC matter between employer, employees

On the contrary, the Centre had directed the employers on the full-payment of wages during the lockdown, and sought direction from the top court for the companies to furnish proof of their incapacity to pay wages and salaries in terms of the March 29 order, by placing on record their audited balance sheets and account.

A bench comprising Justices Ashok Bhushan, S K Kaul and M R Shah queried Attorney General, K K Venugopal representing the Centre, "You have put forth payment of 100 per cent (wages). Question is, do you have power to get them (companies) pay 100 per cent and on their failure to do, prosecute them?"

Venugopal insisted that the notification was to keep the workers stay put, and they would only stay, if they are paid. He added that the Centre wanted the economy to restart and the employers can negotiate with employees to settle the amount in wages during the lockdown. The apex court has reserved the order for June 12, and says there would be no coercive action against employers in connection with March 29 Home Ministry notification.

The top court observed that there can be negotiation industry-wise, and the government can play a role of a facilitator in this process. The bench pointed out there is a concern that workers should not be left without pay, but the other concern is that in the industry many employers do not have money to pay.

"You have to balance between the two sides", the bench told the A-G. Venugopal replied under the Industrial Disputes Act, conciliation and settlement exists, and the most appropriate thing would be to consider the humanitarian situation, due to which this order was issued. The bench queried the A-G on a prayer of companies, which asked the government to subsidise the wages from various relief funds.

Venugopal replied that the government already infused Rs 20,000 crore in the MSME sector. "The Centre has done a very good job", said A-G.

Justice Bhushan said some negotiations have to happen between employers and the workmen to iron out the issues connected with payment of salaries. Justice Kaul said "We are concerned with March 29 notification….asks 100 per cent payment and prosecution, we have reservations over this."

The A-G replied that the interim order of no coercive action may continue. Many companies have moved the top court stating that in the absence of industrial operations during the lockdown, it is not possible for them to make payments to their workers. The bench asked the A-G to answer two queries – whether ESI funds can be utilised for helping workers and whether the order was only issued for migrant workers.

On the ESI funds, the A-G said it cannot be redirected, instead companies can borrow; and the notification does not restrict. "Main objective was that if they get paid, they need not migrate", said the A-G.

The Centre in an affidavit said March 29 notification on full payment of wages to workers by their employers during the lockdown was not unconstitutional, instead it was a measure taken to prevent perpetration of financial crisis within the lower strata of the society, labourers and salaried employees.