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2020 (6) TMI 840 - SC - Companies LawLegality of orders issued under Disaster Management Act 2005 - vires of Section 10(2)(l) of Disaster Management Act 2005 - violation of Article 14 Article 19(1)(g) of the Constitution of India - reinforcement of pre-existing right of the worker to get their wages without any reduction - HELD THAT - It is true that the orders dated 29.03.2020 which was passed in exercise of power under Section 10(2)(l) of the Disaster Management Act 2005 stood withdrawn by subsequent order dated 17.05.2020 w.e.f. 18.05.2020. The consequence of the subsequent order dated 17.05.2020 is that the obligation cast on the employer to make payment of wages of their workers at their workplace without any reduction for the period their establishments are under closure during the lockdown is no longer in operation. However the issue regarding obligation of the employer as per order dated 29.03.2020 when it remained in force is still to be answered especially when the petitioners challenges the order as ultra vires to Disaster Management Act 2005 as well as violative of Article 14 19(1)(g) and Article 21. It cannot be disputed that the lockdown measures enforced by the Government of India under the Disaster Management Act 2005 had equally adverse effect on the employers as well as on employees. Various Industries establishments were not allowed to function during the said period and those allowed to function also could not function to their capacity. There can be no denial that lockdown measures which were enforced by the Government of India had serious consequences both on employers and employees. The period of Unlock having begun from 01.06.2020 and even prior to that some of the industries were permitted to function by the Government of India by different guidelines most of the industries and establishments have re-opened or are re-opening require the full workforce. All industries/establishments are of different nature and of different capacity including financial capacity. Some of the industries and establishments may bear the financial burden of payment of wages or substantial wages during the lockdown period to its workers and employees. Some of them may not be able to bear the entire burden - For smooth running of industries with the participation of the workforce it is essential that a via media be found out. The obligatory orders having been issued on 29.03.2020 which has been withdrawn w.e.f. 18.05.2020 in between there has been only 50 days during which period the statutory obligation was imposed. Thus the wages of workers and employees which were required to be paid as per the order dated 29.03.2020 and other consequential notification was during these 50 days. It cannot be disputed that both Industry and Labourers need each other. No Industry or establishment can survive without employees/labourers and vice versa. It is opined that efforts should be made to sort out the differences and disputes between the workers and the employers regarding payment of wages of above 50 days and if any settlement or negotiation can be entered into between them without regard to the order dated 29.03.2020 the said steps may restore congenial work atmosphere. The private establishment industries employers who are willing to enter into negotiation and settlement with the workers/employees regarding payment of wages for 50 days or for any other period as applicable in any particular State during which their industrial establishment was closed down due to lockdown may initiate a process of negotiation with their employees organization and enter into a settlement with them and if they are unable to settle by themselves submit a request to concerned labour authorities who are entrusted with the obligation under the different statute to conciliate the dispute between the parties who on receiving such request may call the concerned Employees Trade Union/workers Association/ workers to appear on a date for negotiation conciliation and settlement. In event a settlement is arrived at that may be acted upon by the employers and workers irrespective of the order dated 29.03.2020 issued by the Government of India Ministry of Home Affairs. List in last week of July.
Issues Involved:
1. Legality of the orders under the Disaster Management Act, 2005, mandating payment of wages during the lockdown. 2. Violation of constitutional rights under Articles 14, 19(1)(g), and 21. 3. Financial burden on employers and potential insolvency. 4. Role of government funds in subsidizing wages. 5. Interim relief measures for employers and employees. Issue-wise Detailed Analysis: 1. Legality of Orders under Disaster Management Act, 2005: The writ petitions challenge the orders issued under the Disaster Management Act, 2005, specifically Section 10(2)(l), which directed employers to pay full wages during the lockdown. The petitioners argue that the Home Secretary, Ministry of Home Affairs, cannot invoke Section 10(2)(l) to impose financial obligations on private employers. The Union of India contends that the orders were issued under the legal authority of Section 10(1) and were necessary to mitigate the financial hardship of employees during the lockdown. 2. Violation of Constitutional Rights: The petitioners claim that the orders violate Articles 14 and 19(1)(g) of the Constitution, arguing that they are arbitrary, unreasonable, and infringe on the right to carry on business. They assert that the orders do not account for the financial capacity of different industries and impose undue hardship. The respondents maintain that the orders were in the public interest and aimed at preventing financial crises among workers. 3. Financial Burden on Employers: The petitioners argue that the orders could force otherwise solvent businesses into insolvency due to the financial burden of paying full wages without income during the lockdown. They propose that the government should utilize funds like the Employees State Insurance Corporation (ESIC) to support workers instead of shifting the burden to employers. 4. Role of Government Funds: Some petitioners seek directions for the government to subsidize wages using funds from the ESIC or PM Cares Fund. The respondents argue that the government has provided economic stimulus packages to support industries and that the orders were temporary measures to ensure workers' sustenance. 5. Interim Relief Measures: The court acknowledges the adverse effects of the lockdown on both employers and employees. It suggests that a balance must be struck and directs interim measures for negotiation and settlement between employers and employees regarding wage payments for the lockdown period. The court emphasizes the need for a conciliatory approach to resolve disputes and maintain industrial harmony. Conclusion: The court recognizes the complexity of the issues and the need for a detailed examination. It allows the Union of India to file a comprehensive counter affidavit addressing all concerns. The court also continues its interim order preventing coercive action against employers and encourages negotiated settlements to address wage disputes during the lockdown. The matter is scheduled for further hearing in the last week of July.
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