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Important News

Important News

Latest Update on Employees Salaries and Termination

INTRODUCTION

Covid-19 Pandemic and Nationwide Lockdown are shaking our businesses to a breaking point. The Ministry of Home Affairs and the Ministry of Labour and Employment issued single-sided orders directing employers to pay full salaries to their employees and not to terminate their employees.

As the order issued by the government was ambiguous and it lacked a balancing act thus the same was challenged before the Hon’ble Supreme Court of India.

 

CURRENT SCENARIO

The Ministry of Home Affairs (MHA), Government of India has issued an order providing relaxations with respect to payment of salaries during the fourth phase of the COVID-19 lockdown, which will be in effect till May 31, 2020.

The May 17, 2020 Order states “Whereas, save as otherwise provided in the guidelines annexed to this Order, all orders issued by NEC under Section 2(10)(I) of the Disaster Management Act, 2005 shall cease to have effect from 18.05.2020.”

Today on May 26, 2020, the Government before the Hon’ble Supreme Court of India has also made it clear that employers are not bound by the Ministry of Home Affairs (MHA) notifications directing payment of full salaries to employees during the COVID-19 lockdown.

 

Conclusion

The Government before the Hon’ble Supreme Court of India has made it clear that the Home Ministry ceases all previous orders and there is no more compulsory payment of wages.

Also, the Hon’ble Supreme Court of India has extended its earlier interim order protecting the employers from coercive action for not paying full wages to its workers during the COVID-19 lockdown for another two weeks

Thus, employers can now make deductions in the wages of their employees and no coercive action can be taken against them.

However, the question regarding the termination of an employee is still a grey area and the same can be addressed properly once the Government after two weeks file a reply in the matter.

This article is written by Anudeep Singh, Associate Advocate D& R legal LLP.

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