Companies are no longer required to mandatorily pay wages to employees not working during the coronavirus lockdown. The order on compulsory wage payment to workers during lockdown now ceases to exist, the government said on Sunday. "Save as otherwise provided in the guidelines annexed to this order, all order issued by the NEC [national executive committee] under Section 10(2)(I) of the Disaster Management (DM) Act, 2005, shall cease to have effect from 18.05.2020," the Ministry of Home Affairs (MHA) said in the order. The government omitted the order related to wages, while keeping intact several guidelines on lockdown. However, no explanation was provided by the government in this regard in the order.
On March 29, the MHA had issued an order under Section 10(2)(I) of the DM Act asking all employers to pay wages to employees on due date without any deduction even if the establishment was closed on account of coronavirus lockdown. "All the employers, be it in the shops and commercial establishment, shall make payment of wages of their workers, at their workplace, on the due date, without any deduction, for the period their establishment is under closure during the lockdown," the government had said.
On Sunday, the Supreme Court quashed this order by the government on wage payment. The apex court ordered the government not to take any coercive action against companies unable to pay the full salaries to their employees in this period.
The judgement came against a writ petition filed by Karnataka-based company Ficus Pax Private Limited, which had challenged the constitutional validity of a March 20 notification by the Labour Secretary and clause III of the March 29 notification by the Home Ministry, both of which compelled payment of full wages to workers and employees during the period of lockdown.
Meanwhile, several states eased restrictions to open up key economic activities in almost all areas besides the containment zones after India entered its fourth phase of lockdown on Monday. However, schools, colleges, cinema halls, malls and religious assemblies will remain shut, at least till May 31. The easing of lockdown curbs is mainly aimed at boosting the economic activities as the country's gross domestic product (GDP) is likely to contract sharply in Q1FY21.