This article aims to analyse how government orders empowered under the Disaster Management Act, 2015 can be used to protect employee rights during COVID-19. Primarily, the article analyses the scope and limitations of the order passed by the Ministry of Home Affairs dated 29th March, 2020. It focuses on how the order creates ambiguity by not defining the scope of words like workmen, wages, and closure and fails to protect all the classes of employees.
The entire world is witnessing an unprecedented wave of economic and health crisis due to COVID-19. The whole world has been put on halt as shutdowns have been implemented in countries ranging from superpowers like USA to developing nations like India. It has devastating effects on all the spheres, be it social, economic or political. Economy is the worst affected area as activities are put on a complete standstill sine die. The economic effects of COVID-19 has created a sense of fear and job insecurity as it calls to mind the financial crisis that the world witnessed during the 09/11 or 2008 depression. The rapidly intensifying economic effects of COVID-19 on the world of work are proving to be far worse than the 2008-09 financial crises, with cutbacks equivalent to nearly 200 million full-time workers expected in the next three months alone.1 More than four out of five people (81 percent) in the global workforce of 3.3 billion are currently affected by full or partial workplace closures.2 The COVID-19 crisis is expected to wipe out 6.7 percent of working hours globally in the second quarter of 2020 – equivalent to 195 million full-time workers.3
Developing countries like India are the ones that are being severely affected due to this devastating Coronavirus disease (COVID-19). The fundamental cause is the substandard health facilities in addition to high population density which ends up becoming a stumbling block in the fight against this pandemic. By diving further into the economic perspective it can be observed that developing countries are worst affected due to the pre-existence of issues like unemployment.
Taking view particularly from the Indian perspective, COVID-19 has forced the entire country into a lockdown since 24th March, 2020, with most of the people not having a source of income. The inability to go to work has resulted in a major problem for both the employers and the employees. Daily wage earners are the class of employees who are the most vulnerable during this time of crisis and have been the most affected class. Although it has been reiterated by many scholars that there is a need to assign priority to health and medical facilities than to an economy
1 COVID-19: impact could cause equivalent of 195 million job losses, says ILO chief | | UN News, UNITED NATIONS, https://news.un.org/en/story/2020/04/1061322 (last visited May 11, 2020).
2 International Labour Organisation, ILO Monitor: COVID-19 and the world of work. Second edition, 1 (2nd ed. 2020).
during this pandemic but questions regarding the economy cannot be left unanswered as there are millions for whom health and income are proximate issues. Due to the shutdown of businesses and establishments, employers are facing losses which further instill in them a fear of closing down. This has caused employers to reduce pay or layoff or make redundant the employees. Reduced pay or losing employment during this pandemic is no less than an existential crisis as there is no livelihood. The question arises whether these employers have the authority to terminate, lay-off, or reduce the pay of their employees and if any Indian legislations protect the rights of these employees during a time of pandemic like COVID-19.
Due to the lockdown orders implemented by state governments, work from home has been seen as a viable option by most employers. But there are some types of works and employments where work from home is not possible. As lockdown orders have been executed under current situations and commercial and industrial employments are closely pursuant to the government orders, many companies, notably prominent companies, have put their senior employees on “leave without pay”. The legality of this move is questionable, however, since an employee can be denied wages only when he was absent when required to work4 (Section 9 of the Payment of Wages Act, 1936). But in this pandemic, there is no requirement of the employees to work on-premise, as enterprises are shutdown in effect of the order of the government. Henceforth it will be deemed to be a deliberate avoidance of the legal framework, if a company forces their employees to take voluntary unpaid leave.
Whereas, if the businesses are not open voluntarily without any specific order from the central or state government, then the employers and employees can mutually agree and decide on the adjustment of paid and unpaid leaves. Only the employees have the power to decide when they will utilize their leave, the employers cannot force the employees to do so. As a result of this, most businesses and establishments are therefore exploring the possibility of work from home as an alternative. We have even seen that a few establishments have put out schemes in which employees are given an option to go on unpaid leaves but due to the implementation of lockdown such schemes may end up getting affected.
During cases when an employee is infected or need sick leave, the number of sick leaves prescribed under the law is from seven to 12 days and varies from location to location of establishments. Different states have enacted different provisions, Karnataka has increased sickness leave to twenty-eight days to employees who have contracted COVID-19. In case the sickness continues, the employee can use other leaves like casual leaves or earned leaves. In cases of prolonged illness,
4 The Payment of Wages Act, 1936, § 9, No. 4, Acts of Parliament, 1936 (India).
unpaid leaves can be given to employees for that time period. Furthermore, establishments covered under ESI Act are provided a longer duration of sick leave. In cases where the employee has to self-quarantine as a consequence of discharging his official duty, then such employees should be provided paid leaves. But in cases where self-quarantine is due to personal reasons or actions, then the employer need not provide paid leaves, and employees may have to utilize their outstanding leaves.
Many companies like Tata Steel has introduced special leave provisions to ensure quarantining staff that the isolation period does not affect their salaries.5 These special provisions have been made applicable for white as well as blue-collar jobs. This provision provides as many number of leaves as provided due to COVID-19 without affecting their pays and salaries. But all of these provisions are at the expense of the company and there is to compulsion on their part to do so. The employees after a specific number of leaves may end up using their accrued and unpaid leaves to tackle this situation which in turn will affect their home salaries and economic conditions at a large scale without any legal remedy.
Deferred compensation is an arrangement in which a portion of an employee’s income is paid out at a later date after which the income was earned. It usually includes pension, provident fund, gratuity et cetera, and has to be done according to the laws governing it. But it has been noticed that salaries, wages, bonuses, and other incentives of the employees across both the public and private sectors are being deferred to a large extent due to COVID-19. The Government of Telangana by the order dated 30 March, 2020 ordered for deferment on payment of wages or salaries, including all allowances and perks or pensions et cetera, keeping in view the economic impact caused due to the lockdown.6
All wages shall be paid in current coin or currency notes or both: [provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account] on the date as required by the law. This means that salary cannot be withheld by the enterprises as it would lead to salary on credit, not being paid in the required form i.e. cash, cheque, or credit in the bank. The time of payment of wage is governed by section 5 of the Payment of Wages Act. Moreover Act provides for the condition under which deduction in wages is authorized. It holds that an employer
5 Rica Bhattacharyya, CORONAVIRUS: ‘SPECIAL LEAVE’ TO ENSURE ISOLATION DOESN’T HIT PAY THE ECONOMIC TIMES (2020), https://economictimes.indiatimes.com/jobs/special-leave-to-ensure-isolation-doesnt-hit- pay/articleshow/74681435.cms?from=mdr (last visited May 11, 2020).
6 Government of Telangana, COVID-19 – The Epidemic Diseases Act, 1897- LOCKDOWN – Economic Slowdown
– Certain austerity measures – Orders – Issued, G.O.Ms.No.27, (March 30, 2020), https://palamuruuniversity.ac.in/MS27.pdf.
can carry out deduction of the wages only under the head of the section 7 of the Payment of Wages Act. Section 7(2)(b) of the Act provides for the deduction for absence from duty. But absence from duty by an employee must be on his own volition and it cannot cover his absence when he is forced by circumstances. Further deferment of salary or wages is denial of it. Therefore, companies are not allowed deferred wages as the Act categorically required the companies to pay the wages to all the employees on the date as required by the provision of this Act. Even if the employer defers, the wages of the workers through a mutual consideration, even then they are required by the law to pay the interest on the accrued income as reasonable.7
“The government don’t have the right to defer the salary of the employees. Neither in the Epidemic Disease Act, 1897 nor Disaster Management Act, 2005, could I seek solace in justifying the issuance order.”8 Mr. Justice Bechu Kurian Thomas of Kerala High Court observed while hearing a clutch of petitions in response to order by the state government, ordering deferment of the salary of the employees having a salary above INR 20,000 in response to COVID-19. It has been held by the Apex Court that “right to sum of money is ‘property’.”9 While in the other case the Supreme Court held that pension is property within the meaning of Article 300A of the Constitution, and executive instructions that do not have any statutory sanction cannot be termed as law within the meaning of Article 300A. 10 Pension is just a deferred salary and it needs no elaborate consideration, to hold that salary or any portion of it cannot be deferred. “Article 300A of the Constitution of India which confers a constitutional right to property, will include within its purview, salary also, as a property right, at least prima facie.”11
This piece of writing examined, difficulties of precision of language in general and from a legal perspective, and explicitly showed the incompetency and perplexity, of the statement made by the Government during the crisis caused by the COVID-19, offering bulwark, to the constantly exploited stakeholders of the production or service i.e. workers, against immediate exploitation of them. This notification caught the sight of all the citizens, especially working society, hankering for some relief and protection from the ends of government during the crisis, as a ray of hope. But this statement has failed to protect all the classes of employees or workers. The ambiguity of the statement has left the statement litigation prone, as we have seen hereinabove. The scope of the protection, offered by the notification to the employees, has been narrowed to a particular
7 Yuvraj Nathuji Rodye v. The Chairman, Maharashtra State Electricity Board, MANU/MH/0914/2008.
8 Kerela Vydyuthi Mazdoor Sangham (BMS) and Ors. v. State of Kerela and Ors., (High Court of Kerela, 28 April 2020).
9 State of Madhya Pradesh v. Ranojirao Shinde, A.I.R. 1968 S.C. 1053 (India).
10 Hira Lal v. State of Bihar & Ors., MANU/SC/0205/2020.
11 Supra note 32.
KANIKA SHARMA – SYMBIOSIS LAW SCHOOL , NOIDA
HRDI THINK INDIA WORK FROM HOME INTERNSHIP