'Subsidise Wages By Utilising Funds Under ESI Act': Plea In SC Challenges Notifications For Full Payment To Workers/Employees

The Supreme Court has been moved in a plea challenging, as being violative of Articles 14 and 19(1)(g) as well as the Disaster Management Act 2005, government notifications requiring payment of full wages/salaries to the workers/employees, during the COVID-19 lockdown, and restraining the employer from laying off/terminating/retrenching any employee.The petition by the Kerala State Small Industries Association through Advocate Liz Mathew seeks protection of the Court "against the implementation of arbitrary, unreasonable, discriminatory and partisan directions" issued under the following circulars and orders-- Advisory bearing D.O. No.M11011/08/2020-Media dated 20.03.2020 issued by the Secretary, Ministry of Labour & Employment"; - Circular bearing No. 04/2020 dated 23.03.2020 issued by the Directorate of Factories & Boilers, Kumarapuram, Thiruvanathapuram; - Circular bearing No. 11/2020 dated 24.03.2020 issued by the Labour Commissioner, Thiruvananthapuram, Kerala; - Circular bearing No. 11/2020(2) dated 26.03.2020 issued by the Labour Commissioner, Thiruvananthapuram, Kerala. - Order bearing No.40-3/2020-DM-I(A) dated 29.03.2020 issued by the Home Secretary, Ministry of Home Affairs, Government of India under Section 10(2)(l) of the DM Act"Due to the unprecedented catastrophic situation prevailing in the country due to the outbreak of COVID-19 pandemic and the resultant state imposed lockdown, all industries, productions units, shops, establishments, offices etc. except those providing essential services have been remaining shut since 25.03.2020. All such micro, small and medium industries are now facing threat of insolvency. In such a scenario, the blanket directions to pay full wages to employees, whether permanent, contractual or casual workers, irrespective of whether such employees are actually working or not, is annihilative", submits the petition drawn by Advocate Raghenth Basant and filed by Advocate Liz Mathew.Grounds for challenge of impugned notificationsThe Petitioner, a promotional organisation espousing the collective interest of almost 6500 small-scale industrialists registered in the state of Kerala. seeks to challenge the aforesaid impugned notifications on the following grounds: I. Impugned Notifications are violative of Article 19(1)(g) of the Constitution of India a. Compulsion to pay wages/salary while incurring zero revenue and high losses impinges upon the right to freedom of the members of the Petitioner-Association to carry on any occupation, trade or business under Article 19(1)(g) as the same would lead to the collapse of their industrial units. b. Imposition of financial liability on the employer is independent and extraneous to the measures required to regulate COVID-19, therefore, beyond the exception of reasonable restrictions including interest of public health. c. Statute enacted to protect socio-economic rights is always subject to the rights guaranteed to other non-state actors under Articles 19(1)(g), 30(1), 15(1), 16(1) of the Constitution. "Therefore, claims of the employee for social economic justice has to be balanced with the claims of the employer for freedom to conduct trade", it is argued.II. Impugned Notifications are ultra vires the Disaster Management Act, 2005 a. Direction under section 10(2)(l) of the DM Act to compel private enterprises to pay full wages/salaries to the workers/employees during lockdown is not in furtherance or even incidental to the object ('effective management of disasters') sought to be achieved by the DM Act i.e. containment of spread of COVID-19 in the country. b. DM Act does not vest any power upon the State and the Authorities under the Act - National Disaster Management Authority or the National Executive Committee constituted under section 3 and 8 respectively - to impose financial burden upon private enterprises by directing payment of wages and to interfere in matters of employment, wages, layoff, retrenchment etc. of private enterprises. Therefore, it is unreasonable exercise of power and arbitrary under Article 14 of the Constitution. c. DM Act itself imposes an obligation upon the government at various levels to meet expenses for emergency response, relief and rehabilitation including restoration of means of livelihood. These include National Disaster Response Fund and National Disaster Mitigation Fund set up under section 46 and 47 of the Act. d. Unilateral direction by the State on the basis of the Advisory and Order issued by the Chairperson, National Executive Committee coercing the private sector to bear the full financial brunt to mitigate the economic hardship of migrant workers due to state imposed lockdown is beyond the object of the Act and legislative competence of the Respondents as well as manifestly arbitrary, unreasonable and unfair and therefore, ultra vires the DM Act. III. Compulsion to pay full wages/salary is in effect imposition of tax/penalty in disguise that is violative of Article 265 of the...

'Subsidise Wages By Utilising Funds Under ESI Act': Plea In SC Challenges Notifications For Full Payment To Workers/Employees

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'Subsidise Wages By Utilising Funds Under ESI Act': Plea In SC Challenges Notifications For Full Payment To Workers/Employees

MEHAL JAIN

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