The court left it open to employers to negotiate the payment of full wages for 54 days – from March 25 to May 17 – during which the notification was in place.

In a relief to companies, the Supreme Court on Friday restrained the government from taking any coercive action till the end of July against employers who did not pay full wages to workers during the Covid lockdown as directed by the Ministry of Home Affairs’ March notification. The court left it open to employers to negotiate the payment of full wages for 54 days – from March 25 to May 17 – during which the notification was in place.

The MHA notification which ordered mandatory payment of full wages to workers during the lockdown stood withdrawn from May 18.

While it asked the states’ labour authorities to facilitate negotiations between employees and employers over wage payment, a Bench led by Justice Ashok Bhushan asked the Centre to file a reply within four weeks on the legality of the March 29 notification.

If workers and employers are not able to arrive at a settlement within 50 days, then the issue should be referred to concerned labour authorities, who are entrusted with the obligation under the different statute to conciliate the dispute between the parties, the judges said, adding that in event a settlement is arrived at, that may be acted upon by the employers and workers irrespective of the MHA order.

“It cannot be disputed that both industry and labourers need each other. No industry or establishment can survive without employees/labourers and vice versa. We are thus of the opinion that efforts should be made to sort out the differences and disputes between the workers and the employers regarding payment of wages… the said steps may restore congenial work atmosphere,” the Bench said while passing the orders.

“Some of the industries and establishments may bear the financial burden of payment of wages or substantial wages during the lockdown period to its workers and employees. Some of them may not be able to bear the entire burden. A balance has to be struck between these two competitive claims. The workers and employees although were ready to work but due to closure of industries could not work and suffered. For smooth running of industries with the participation of the workforce, it is essential that a via media be found,” the order stated.

Those who are willing to work should be allowed to work “without any prejudice to rights of the workers/employees regarding unpaid wages of above 50 days”, the SC said, adding the employers should “publicise and communicate” about such steps to workers and employees. The SC will further hear the matter in the last week of July.

The order came on a batch of petitions filed by companies including Ludhiana Hand Tools Association and Ficus Pax Pvt Ltd, seeking quashing of the MHA’s March 29 circular directing all private enterprises to continue payment of full salaries for the duration of the lockdown. The MHA order had also warned of legal consequences if the directions for payment of full salaries were not complied with.

Earlier, the Central government had told the apex court that the MHA notification to pay full wages was aimed at reducing the financial hardship of lower strata of society, labourers and salaried employees.

In its affidavit, the government said that the notification was never a permanent measure and has now been withdrawn. It said the companies and firms that have cited financial incapacity to pay their workers for the 54 days when the order was in operation should first be directed to place on record their audited account books.

The MHA had added that it was an economic and welfare measure proposed temporarily to mitigate the financial hardship of crores of workers and employees.