Look Before You Leap : Is There A Stay By SC On MHA Direction To Pay Full Wages To Workers Amid Lockdown?

Tishampati Sen

16 May 2020 5:49 AM GMT

  • Look Before You Leap : Is There A Stay By SC On MHA Direction To Pay Full Wages To Workers Amid Lockdown?

    The SC order is not a carte blanche for establishments to not pay full wages to their workers

    A batch of writ petitions were listed for hearing before the Supreme Court on 15.05.2020, challenging the MHA Notification, dated March 29, 2020 whereby the MHA, invoking its powers under the Disaster Management Act, 2005, had ordered that all employers whether in factories or in shops or in any form of commercial establishments would have to pay wages to their workers on the due...

    A batch of writ petitions were listed for hearing before the  Supreme Court on 15.05.2020, challenging the MHA Notification, dated March 29, 2020 whereby the MHA, invoking its powers under the Disaster Management Act, 2005, had ordered that all employers whether in factories or in shops or in any form of commercial establishments would have to pay wages to their workers on the due date and there cannot be any reduction owing to the closure of the workplace. The Notification further directed the States / UTs to take necessary action for the violation of the said Notification.

    In two of the batch matters, i.e. Hand Tool Manufacturers Association vs. Unionof India (W.P.(C) Diary No. 11193 / 2020) and Indian Jute MillsAssociation & Anr. vs. Union of India (W.P.(C) Diary No. 11281/2020), the Court was pleased to issue notice to the Union of India, and also directed that "no coercive action shall be taken in the meanwhile".

    SC Says No Coercive Action Against Employers In Two Pleas Challenging MHA Order On Full Payment Of Wages; No Interim Order In Connected Cases

    Consequently, the news / update that has immediately been in circulation, and which has understandably taken a place of prominence and significance for a lot of employers and business establishments, is that the Supreme Court has effectively stayed the MHA Notification. It may not be wise to treat the above order of the Supreme Court as a veritable panacea, at least at this stage. Such a leap of understanding is dangerous, especially since many seem to have arrived at the conclusion that employers are no longer required to comply with the Notification. This, in my opinion may not be a prudent view at this stage, for the following reasons:

    1. It is important to note that the said direction of the Court, which is being (mis)quoted in several news items, that 'no coercive action shall be taken in the meanwhile', has interestingly been issued in only two of the batch of writ petitions listed for hearing before the Court. In all of the other writ petitions, only notice has been issued. The said direction of the Court is conspicuous by its absence in all such other matters. While it is likely that it is only a technical lapse and something that the Court may clarify in the coming days, as on date, this direction of the Court seems to be limited to the Hand Tool writ petition only and cannot be said to be applicable to all other writ petitions where notice has been issued, leave alone other employers who are not even before the Court.

    1. Notwithstanding the above, the actual language of the direction of the Supreme Court also becomes relevant. The Court has effectively only asked that the law enforcement not take action against employers, who are not in compliance with the Notification, until the next week when the matter is scheduled to be heard. Typically the Supreme Court when it deems it fit to grant a Stay / injunction, it is very specific in its order. But from the language used in the orders passed it becomes amply clear that the Court has clearly chosen to not Stay the said MHA Notification, but only asked that no one be penalised or put in a prejudicial position for one week.

    The distinction is very important. The effect of a Stay on the Notification would imply that the Notification ceases to have any force of law during the period of the stay, and as such non – compliance with the same may not amount to a violation of the law. However, this particular order of the Court only means that while the Notification continues to be in effect and have force of law, the persons acting in contravention of the same may not be prosecuted or penalised for one week. Importantly therefore, this order of the Court is not a carte blanche for business establishments and employers.

    Therefore it would certainly be advisable, to continue compliance with the MHA Notification not only until next week, but until the matter is finally adjudicated upon by the Court, where of course, if the MHA Notification is upheld by the Court, then the compliance by employers would be required until the Notification ceases to have effect.

    It is an trite principle in constitutional law and writ jurisprudence, that even an unconstitutional statute 'is an operative fact at least prior to a determination of constitutionality' (Jagannath v. Authorised Officer, Land Reforms – 1971 Supreme Court) and non – compliance may have consequences which cannot be ignored

    1. Even otherwise, for those who are awaiting the final judgment of the Supreme Court in this regard, a more measured and cautious approach may be required. It does need to be acknowledged that writ courts have often provided relief qua the impugned order / law, only to the petitioners concerned (i.e., in personam) and not necessarily to the world at large (i.e., in rem). In a recent judgment of the Supreme Court in January 2020, in a matter titled CMD, Uttar Pradesh Power Corporation Ltd. vs. Ram Gopal (Civil Appeal No. 852 / 2020), the Supreme Court occasioned to remind us of the same, as the Court opined as follows:

    "writ courts naturally ought to be reluctant in exercising their discretionary jurisdiction to protect those who have slept over wrongs and allowed illegalities to fester. Fence - sitters cannot be allowed to barge into courts and cry for their rights at their convenience, and vigilant citizens ought not to be treated alike with mere opportunists."

    While there are judgments with a contrary view as well, the above is a view taken by the Court over many years in a number of judgements and is something that one must be aware of. In the famous case of U.P. Jal Nigam v. Jaswant Singh ((2006) 11 SCC 464), the Supreme Court, while quoting a passage from the celebrated Halsbury's Laws of England, opined as follows:

    " '12. … 'In determining whether there has been such delay as to amount to laches, the chief points to be considered are:

    (i) acquiescence on the claimant's part; and

    (ii) any change of position that has occurred on the defendant's part.'

    Acquiescence in this sense does not mean standing by while the violation of a right is in progress, but assent after the violation has been completed and the claimant has become aware of it. It is unjust to give the claimant a remedy where, by his conduct, he has done that which might fairly be regarded as equivalent to a waiver of it; or where by his conduct and neglect, though not waiving the remedy, he has put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted"

    (Emphasis supplied)

    In the same case, the Court also stated that whenever it appears that the persons lost time or 'whiled it away and did not rise to the occasion' in time for filing the writ petitions, then in such cases, the court should be very slow in granting relief. The Supreme Court has often been of the view, while refusing to extend the protection of a writ judgment, that if the persons would have been vigilant enough, they could have filed writ petitions as others did in the matter. As such, one must consider whether it would be prudent for persons to file writ petitions urgently challenging the said Notification before the Court takes a view on the same, such that there is no unfortunate disqualification, and employers are not prevented from taking the benefit of the judgment of the Court, in the event the Court finds in favour of the petitioners.

    1. While we haven't had the benefit of being able to scrutinise and review the writ petitions so filed challenging the MHA Notification; presumably such petitions have been filed challenging the MHA Notification as being inter alia in violation of Articles 14 (right to equality), 19(1)(g) (right to practice any profession or to carry on any occupation, trade or business) and 21 (right to life).

    Consider a possible scenario where the Court finds that the MHA Notification is not in violation of Article 14 (since a possible view is that there may be an overriding public order motive to the MHA Notification and is therefore not arbitrary) and Article 21 (since there is a corresponding and reciprocal rights of the employees to be protected), but the Court does find that the MHA Notification is in violation of Article 19(1)(g) (on the ground that businesses shall not survive with the compulsory payment of wages without revenue). In such an event it would be important to note that protection under Article 19(1)(g) is available only to 'citizens' and not to all and any persons. Pertinently companies, and business structures, which could fulfil the legal requirement of 'person' in terms of the law, do not qualify to be 'citizens'.

    One is reminded of the observations of the Supreme Court in the landmark judgment titled as State of Gujarat & Anr. vs Shri Ambica Mills Limited, Ahmedabad & Anr. ((1974) 4 SCC 656) in this regard. It was held that in proceedings where a law is challenged as being in violation of certain fundamental rights, the voidness of the said impugned law is not necessarily in rem (i.e., in general), but to the extent only of inconsistency or contravention, as the case may be of the said specific rights conferred under Part III of the Constitution. Therefore, when Article 13(2) of the Constitution uses the expression "void", it can only mean, void as against persons whose fundamental rights are abridged by a law.

    Pertinently the Court stated as follows:

    "For our purpose it is enough to say that if a law is otherwise good and does not contravene any of their fundamental rights, non-citizens cannot take advantage of the voidness of the law for the reason that it contravenes the fundamental right of citizens and claim that there is no law at all. Nor would this proposition violate any principle of equality before the law because citizens and non-citizens are not similarly situated as the citizens have certain fundamental rights which non-citizens have not."

    The above reasons are not to dampen the hopes that have indubitably risen for the many employers and businesses, but is only meant to caution those who feel that the force of the Notification is stunted and that one may now act freely. Since notice has been issued in the matter, it is expected that the Court will adjudicate on this Notification and shall come to a view. However, the present times more than ever before requires the Court and the law to take into account the "special equities" that the times due to the dreaded Covid – 2019 demands. A writ remedy is based on equity, and the Court would have to play a sensitive role in balancing the rights of businesses / employers with the needs of the many who will be impacted by non – payment of wages for no fault of theirs.

    (The author is an an Advocate – On – Record of the Supreme Court of India).

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