SC relief for firms unable to pay full wages during lockdown-THE HJINDU-16-05-2020


The Supreme Court on Friday asked the government not to resort to any coercive action against private companies who have not paid their workers full wages during the lockdown in accordance with a government order in March.

Nageswara Rao indicated that payment of full wages, as directed by the Ministry of Home Affairs in an order on March 29, may not be viable for small and private enterprises, which themselves are tottering on the brink of insolvency due to the lockdown. Some small units may not have been able to survive a fortnight into the lockdown.

The court remarked that the March 29 order was an omnibus one and there were several issues involved that required careful reconsideration from the government side.

The petitions said a blanket direction from the government to private establishments to pay full salaries against no work was arbitrary and violative of Article 14 of the Constitution. It said stoppage of operations since the lockdown had led to losses to the tune of Rs1.50 crore.

MSME industries have said that they are compelled to slide into insolvency by the government, which has ordered them to continue to 100% pay to their workers. These petitions have even asked the court to order the government to support them by taking responsibility for 70% of their staffers’ pay by drawing funds from PM CARES Fund or the Employees State Insurance Corporation.

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