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Harmonious Construction in Settlement?

Updated: Jun 22

Introduction

Ficus Pax Private Ltd. and Ors V. Union of India and Ors, a compilation of writ petitions made by several employers, employer associations, and other groups, was recently heard by the Supreme Court of India. Filed as Writ Petition (C) Diary No. 10983 of 2020, the judgment was delivered by Hon’ble Justice Mr Ashok Bhushan, on 12th June 2020.


The case dealt with the question of whether employers are liable to pay wages to employees during the lockdown period in pursuance of the D.O. issued by the Secretary, Government of India, invoking its power under Section 10(2)(1) of the Disaster Management Act 2005, compelling the employers to shell out wages, despite dire financial straits of several employers.


Issues Raised-

  1. Whether the employers are bound to make complete payment of wages to employees during the lockdown period?

  2. Whether the Government of India can compel employers to make payment under Section 10(2)(1) of the Disaster Management Act (2005)?


Advanced Arguments Between Petitioners / Respondents

The legality of NotificationGovernment notification is arbitrary, illegal, and contrary to the provisions of the Indian Constitution under Article 14, Article 19(1)(g).

Counsel stated that the said notification stands withdrawn and nullified. Counsel sought time for filing a paragraph wise detailed submission. However, all actions taken are under the “legislative competence” of the government. Invoking Disaster Management Act 2005Government cannot invoke the Disaster Management Act to impose directives on payment of wages.

The order passed under Section 10(2)(1) has been revoked. However, the government has the right to invoke the provisions of the act. Liability to Pay Compensation should be paid by the government and the liability cannot be shifted on private establishments. The Government should utilize funds collected under ESIC for the same.

Directions issued were of the nature of economic and welfare relief for employees, and hence employers are liable to pay.

Haphazardness of Order Directives and orders to pay compensation to employees regardless of financial capacity is unreasonable.

The order was passed by competent authorities and under the relevant statutes and hence is not haphazard.


Judgment-

After taking the advanced arguments by both counsels into consideration, the court issued the following temporary and permanent directives-

  1. No action shall be taken against the employers for non-compliance with the notification dated 29.03.2020.

  2. A middle ground has to be reached between the two equally valid claims made by the government and the employers.

  3. Some industries are suffering from severe financial crunch due to the lockdown and hence they should not be compelled to pay via any order or directive.

  4. Trade Unions and Employee Associations must intervene and ensure the seamless functioning of industries, and speedy resolution of disputes between employers and employees, as and when they arise.

  5. Efforts must be undertaken to remedy the disputes between workmen and employers, by way of settlement, negotiation, mediation, etc.

  6. As an interim measure, negotiations may be started at the industries. If a settlement is arrived at, it can be followed and acted upon, regardless of the order dated 29.03.2020.

  7. Notices must be put up in industrial establishments inviting workers to participate in the negotiation process. The order of the court must be notified and publicized for the same.

Conclusion-

The pandemic has struck a severe blow to the functioning of industrial establishments. However, the concerns of the employers shall also be taken into consideration. Keeping this in mind, the principle of “Harmonious Construction” must be invoked to resolve the tussle between the employers and the employees. The directive of the court to initiate negotiation processes and settlement between the employers and employees is a step in the right direction, and further implementation of the same must be ensured.

ABOUT THE AUTHOR

Tamanna Gupta, Student from RGNUL Punjab.

You can contact the author at www.linkedin.com/in/tamanna-gupta-315059148

Editor: Vijayalakshmi Raju.

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