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Karuna In The Times Of Corona : A Case For Direct Government Transfer Of Wages During The Epidemic

Sanjoy Ghose and Naman Jain
15 April 2020 11:55 AM GMT
Karuna In The Times Of Corona : A Case For Direct Government Transfer Of Wages During The Epidemic
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While Babasaheb Ambedkar is given the lion's share of our national gratitude for giving "WE THE PEOPLE" a revolutionary document as the Constitution, few would remember the behind the scenes contribution of one more man - he was Sir BN Rau, the Advisor to the Constituent Assembly. He travelled far and wide to secure inputs as we shaped our Basic Law. After all the Rig Vedic Mandate was "let noble thoughts come from all directions". One such direction pointed to the legendary Justice Frankfurter. He cautioned Rau against adoption of a term as potent for expansion as "due process". It would be an unruly horse, he warned, especially in the hands of activist judges. Rau listened. We got "procedure established by law", instead of "due process", by which "the right to life" could be impacted.

It took the great Justices of India 28 years to unshackle themselves of this Rau-Frankfurter bind. They held in Maneka Gandhi[1] that the right to life could not be impacted simply by any "procedure established by law". Such law must comply with the due process mandate of being just, fair and reasonable. Many attributed the change of heart to the Court's contrition for its blemished capitulation to the political executive during the dark days of emergency.

Perhaps, were it not for its shameful surrender in ADM Jabalpur[2], India's Supreme Court would not have gone on to nurture the blossoming of the right to life as it did in the after years. Article 21 became that veritable precious mine from whose depths the Top Court extracted the right to shelter[3], the right to livelihood[4], the right to dignity[5], the right to education[6], and the right to privacy[7] with the right to sexual orientation being an essential attribute thereof!

When the virus from Wuhan hit India and she went in for a stringent lockdown at 4 hours' notice, it led to the shutting down of industrial establishments, blocking borders and halting means of transportation, bringing national attention to the plight of lakhs of migrant labour. Suddenly, they found themselves laid off, their industrial establishments shut, and their ability to return to the sanctuary of their homes, seriously impaired.

The Prime Minister and some Chief Ministers exhorted employers not to enforce wage cuts and passed orders to such effect. In fact, on March 29, 2020 directions were passed under the Disaster Management Act, 2005 to employers not to deduct wages. However, in the absence of concerted state action, these exhortations sadly remained on paper. This is becoming increasingly evident from the restlessness of the migrant labour who have now resorted to agitation in industrial cities such as Mumbai, Chennai and Surat.

In this background, the manner in which the Top Court dealt with two Public Interest Litigations seeking ameliorative measures for the migrant labour is simply astounding[8]. The very Court which had so deftly expanded the right to life, as noticed above, was only too content to confine it to the assurance of the government that free food and community shelter would be provided. Does not right to life include the right to ensure one's family and dependents are provided for? Does not the right to life subsume the right to be reunited with one's loved ones in a time of calamity and uncertainty?

The supreme confidence and trust reposed on the Central Government by the Court has emboldened it into further inaction and insensitivity as far as the migrant workers are concerned. The stories that have been reported of workers walking hundreds of kilometres with children, elderly and the ailing in toe, are heart rending. The Pradhan Mantri Garib Kalyan Yojna[9] that was announced a few days into the lockdown hardly ministered to plight of these lakhs of displaced workers who face economic ruin and destitution.

While certain local governments like Delhi have taken initiatives to make some payments to registered construction workers and auto-drivers, this is just a drop in the ocean.

If the Government does not initiate urgent steps to address this impasse in the coming days, the resentment among these people, abandoned by the Constitutional Court, retrenched by their employers, evicted by their landlords, would only worsen, leading to a serious law and order issue.

Unlike certain nations which have come to the assistance of small employers to ensure liquidity for wage disbursement and working capital, hardly any initiative has been shown by the Central Government on this front either. No wonder Punjab Chief Minister has opposed the employer having to pay full wages for the lockdown period warning that it would bring economic ruination on the employers.

Let us, in this backdrop, examine the legal regime for ensuring payment of wages. The Payment of Wages Act, 1936 provides for the timely payment of wages by employers to their employees, without any unauthorised or arbitrary deductions It also provides penalties of up to ten times the amount unlawfully deducted or withheld[10]. It is supplemented by the Minimum Wages Act, 1948, which sets the minimum rates of wages to be paid to workmen. In 2017 Delhi amended this law to enhance penalties for violations[11], and provide for direct electronic transfer of wages into the employees' accounts[12].

The Industrial Disputes Act, 1947 permits lay off in certain circumstances, such as shortage of coal, power or raw materials; or the accumulation of stocks; or the break-down of machinery; or natural calamity[13]. Laid-off workers are entitled to 50% of the regular wages[14], and if the unit employs more than a certain number of workmen, even prior government permission for lay-off is mandated[15].

The Inter-State Migrant Workmen Act, 1979 was specifically enacted to set in place protections keeping in mind the peculiar circumstances faced by such migrants. Among other things, it provides for only licensed contractors to recruit workmen for work in another state[16]. It also provides for a host of benefits, including Displacement Allowance[17], Journey Allowance[18], suitable residential accommodation, provision of medical facilities, free of charge[19], etc.

In August, 2019, the Parliament enacted the Code on Wages, yet to be enforced, which consolidates and codifies the previous wage regulations. Interestingly, the Code also provides for electronic payment of wages, as in Delhi.[20]

The legal regime, while impressive, sadly is more adhered to in transgression. The smaller the industry, the greater the propensity to work around the laws. The Indian genius to invent creative ways to defeat lofty legislative goals is legion. Take for example the statutory amendment mandating direct bank transfer to curb workman from being made to sign off on receipt of the minimum wage, whereas he would only be paid a much lower amount in cash. In reality, in many establishments across the nation, on the evening of the bank transfer itself, the unwritten code is that the worker is forced to withdraw a portion of the payment and return the same to the employer in cash.

The unprecedented displacement that the present epidemic has brought about, would cripple this workforce if governments, centre and states, are not willing to bite the bullet and mandate action beyond exhortations.

The urgent need is to amend the labour laws (through an Ordinance as the Parliament is not in session) and to mandate as follows:

A. Every employer to issue an employment letter clearly stating the details of the employee, including the date of employment and last drawn wages. Employers are often hesitant to do so as most labour laws (and the related costs of compliance) kick into operation only if the total employees exceed a threshold number. Also often employers manipulate the joining date and wages paid as both these determine the application as well as the quantum of several labour law benefits such as gratuity.

B. Every employer has to furnish to the designated authority, an employees list with their last drawn wages as well as bank account/contact details of employees as well as its own.

C. The employer should periodically transfer the wages directly to the government, with strict penal as well as civil liability provisions on defaults and false declarations.

D. Ensure direct crediting of salary/layoff compensation amounts by the designated authority to the Jan Dhan Accounts of such employees without awaiting the actual deposit from the employer for initiating this process. At least a basic minimum can be released making the rest subject to actual deposit.

E. The Government should be empowered to recover these wages as land revenue arrears from the employers. Depending upon the resources available, the Government may adopt a policy, as a special case, to grant a subsidy and/or a loan so that a part or whole of this interim wage burden is waived off or deferred for employers depending upon their capacity.

F. This, of course, shall be an extraordinary arrangement during the period of duration of the epidemic.

G. There should be statutory responsibility on the Nodal Authority/Government to give wide publicity to the fact

Needless to add, in addition to this step, the other beneficial legislative interventions already in the statute book should be given effect to on a war footing.

Even in the best of times, to expect migrant labour, to assert and secure their rights on their own is a chimeric dream. The bloating coffers of the Building and Construction Workers' Welfare Board, with unutilized and unclaimed funds collected in the name of welfare of mostly migrant labour, bears eloquent testimony to this. Delhi Government has announced Rs 5000 per construction worker from this fund. However this is only for Delhi and that too for a specific category.

The wages of inaction would be an unimaginable human disaster of epic proportions, as India, according to the 2011 Census, had about 41 million migrant workers, most supporting an average family of four, if not more. The time to act is upon us.



[1] Maneka Gandhi vs Union of India & Ors., (1978) 1 SCC 248

[2] ADM, Jabalpur vs Shivkant Shukla, (1976) 2 SCC 521

[3] U.P. Avas Evam Vikas Parishad & Anr. vs. Friends Co-op. Housing Society Ltd. & Anr., 1995 Supp (3) SCC 456

[4] Olga Tellis & Ors. vs Bombay Municipal Corporation & Ors., (1985) 3 SCC 545

[5] Francis Coralie Mullin v. Administrator, Union Territory of Delhi, (1981) 1 SCC 608

[6] Unni Krishnan, J.P. & Ors. vs. State of Andhra Pradesh & Ors., (1993) 1 SCC 645

[7] Justice K S Putaswamy & Ors. vs Union of India & Ors., (2017) 10 SCC 1

[8] Harsh Mander vs Union of India, Writ Petition (Civil) Diary No.10801/2020; Alakh Alok Srivastava vs Union of India, Writ Petition (Civil) Diary No. 468/2020

[9] Sanjoy Ghose & Urvi Mohan, Garib Kalyan Yojana and the Toiling Poor, https://www.barandbench.com/columns/policy-columns/coronavirus-lockdown-garib-kalyan-yojana-and-the-toiling-poor, 02.04.2020

[10] S 15, Payment of Wages Act, 1936

[11] S 22 and 22A, Minimum Wages Act, 1948, as applicable in Delhi

[12] S 11, Minimum Wages Act, 1948, as applicable in Delhi

[13] S 2(kkk), ID Act, 1947

[14] S 25C, ID Act, 1947

[15] S 25M, ID Act, 1947

[16] S 8, Inter-State Migrant Workmen Act, 1979 (1979 Act)

[17] S 14, 1979 Act

[18] S 15, 1979 Act

[19] S 16, 1979 Act

[20] S 15, Code on Wages, 2019

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