A tug of war ensues on ‘no work no pay’ principle

While the Bombay high court said this principle cannot be invoked during such extraordinary times, the MHA withdrew its previous order which aligned with the court’s order


The Bombay High Court, in a judgement dated May 12, held that the principle of ‘no work no pay’ could not be applied in that particular petition, until further orders. The Ministry of Home Affairs, on the other hand, withdrew its circular dated March 29 which made it mandatory for private companies to pay wages to their employees during the lockdown period. These were the guidelines issued at the time of the first lockdown which continued to be in operation. The relevant part of the MHA order reads as follows:

“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.”

It further spoke of coercive action if the above mentioned direction is not followed, stating, “It is further directed that in case of violation of any the above measure, the respective State/UT shall take necessary action under the act”.

Many petitions were then filed in the Supreme Court against this order of MHA seeking to quash it for being contrary to the ‘no work no pay’ principle and also for causing financial hardships which could eventually force private establishments into insolvency.

These petitions are still pending in the Supreme Court and in few of these petitions, the Supreme Court has directed that no coercive action be taken against the petitioners for not abiding by the MHA order on full payment of wages. But these petitions have effectively become infructuous now that the MHA has withdrawn the said order.

While pronouncing guidelines and orders for Lockdown 4.0 which is till May 31, it has ceased the operation of its previous orders which includes the March 29 order as well. In its order dated May 17, the MHA 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.”

This means that MHA has given up the power to decide on this issue to the states and the states may come up with their own rules to that regard, if they wish to. Thus, private employers are no longer bound to pay their employees as per the MHA order but only the labour laws will apply. So, if the employee is not even working from home, he is not entitled to receive payment as per law.

Justice Ghuge of Aurangabad Bench of Bombay High Court, however, took a different view and stated that the principle of “no work no pay” cannot be made applicable during the imposed lockdown due to COVID19 pandemic. The petition was filed by a contract workers’ union against Tuljabhavani Mandir Sansthan stating that despite of the workers ready to offer their services as security personnel or other duties, the Trust was not allowing them to.

The court said, “Prima facie, I feel that the principle of “no work­ no wages” cannot be made applicable in such extraordinary circumstances. The Court cannot be insensitive to the plight of such workers, which has unfortunately befallen them on account of the Covid­19 pandemic.”

The Bombay High Court order may be read here

While this is an interim order of a single bench judge, it is a clear juxtaposition of two view points of the same principle. Now that the MHA order compelling full payment of wages has already be withdrawn, it is less likely that the supreme court will give a decision on that principle but if it gives an obiter dicta, it will be interesting to see what will the apex court’s stance be, when the decision is likely to affect a larger number of petitioners.


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