SC directs employer-employee negotiation to resolve dispute on payment of full wages

Many private establishments had challenged the MHA direction on full payment of wages during the lockdown

supreme court of india

The Supreme Court has issued directions to effectuate negotiations between industry/company and workers on the issue of full payment of wages. The court said that the negotiations should be carried out without considering the MHA notification dated March 29. Many private establishments had approached the court questioning the validity of this order and highlighted how this adversely affects their business.

A notification issued by Ministry of Home Affairs, on March 29 had directed that “All the employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their workplaces, on the due date, without any deduction, for the period their establishments are under closure during lockdown period.”

The Supreme Court combined together all petitions filed by private establishments against the March 29 MHA order directing full payment of wages. On June 4, the court had passed interim directions that no coercive action be taken against private establishments if they failed to comply with the order.

On June 12, the bench comprising Justices Ashok Bhushan, SK Kaul and MR Shah found negotiation to be an effective measure, “No industry can survive without workers. Thus, employers and employee need to negotiate and settle among themselves. If they are not able to settle it among themselves, they need to approach the concerned labour authorities to sort the issues out.”

The bench also issued the following directions:

1. A date for conciliation and settlement may be effectuated by the MHA.

2. Directions for participation of employees for effectuating this settlement may be publicised for the benefit of all employers and workers

3. State governments to facilitate such settlements and initiate the process for the same and submit reports before the concerned labour commissioners.

4. Workers who are willing to work should be allowed to work notwithstanding disputes regarding wages.

The bench has directed the Centre and states to circulate this order through their labour departments in order to facilitate settlements.

At the last hearing, Attorney General (AG), KK Venugopal had defended the MHA notification saying that the intention behind the notification was to ensure that the migrant workers stay put in their migrated locations to prevent their movement to their native states or cities.

Counsels appearing for petitioners had argued that the MHA direction insisting payment of full wages was unfair to them and argued that there is a need of proportionality and that it was the government’s responsibility to mitigate workers issues in such crisis.

This order ceased to operate from May 18, as a notification dated May 17 stated, “Whereas, save as otherwise provided in the guidelines annexed to this Order, all orders issued by NEC under Section 2(10)(I) of the Disaster Management Act, 2005 shall cease to have effect from 18.05.2020.”

The case will be heard in last week of July and until then the interim protection against coercive action granted to private establishments shall remain in operation.

The story will be updated once the court order is available.


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