Private organisations cannot be forced to pay full wages: SC

The Centre maintains that employers claiming inability to pay salaries must produce their audited balance sheets and accounts in the court.

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The Supreme Court, on June 4, stopped the Government from taking any ‘coercive action’ against private companies who were unable to pay full wages to their employees for the lockdown period, which saw the whole nation coming to a standstill.

Some petitions were filed by owners of small commercial units, shops, factories, and the likes, challenging the notification by the Ministry of Home Affairs that forced employers to pay full salaries to their employees for the lockdown period. The judgement for the same will be pronounced on June 12.

The petitioners maintained that the pandemic had weakened their economic position, as no production had taken place during the lockdown. They rightly argued that the businesses would go bankrupt if they had to pay full wages to the workers without having generated any revenue. The Bench questioned the logic behind the Government notification that said that employers could face legal action if they failed to pay full salaries to their employees, even though no work had been done or income generated.

It was observed during the hearing that the situation called for negotiations, which would vary from industry to industry and worker to worker, as some private entities may be in a position to pay 100 per cent wages, while others may struggle to even pay 25 per cent wages.

However, the Centre justified its notification, saying that those employers who claimed to be in no position to pay salaries to their workforces, should be asked to produce their audited balance sheets and accounts in the court.

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