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No coercive action to be taken against private firms for non-payment of full wages during lockdown: SC

The Supreme Court ruled that private establishments and workers should sit together to negotiate to settle disputes relating to wages.

Jun 12, 2020 14:27 IST
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The Supreme Court ruled on June 12, 2020 that no coercive action should be taken at least till July last week against private companies who have failed to pay full wages to their employees during COVID lockdown.

The ruling was delivered by a bench of Justices comprising Justice Ashok Bhushan, Justice Sanjay Kishan Kaul and Justice M R Shah. The bench noted that the industries and employees need each other at this crucial time and they should sit together to arrive at a settlement on the issue of payment of wages.

Key Highlights

The Supreme Court ruled that private establishments and workers should sit together to negotiate to settle disputes relating to wages. The court also ordered that workers who are willing to work should be allowed to work notwithstanding disputes regarding wages.

The apex court bench further directed the state governments to facilitate the settlement process and file its report with the concerned labour commissioners.

It also directed the centre to file an additional affidavit within four weeks regarding the legality of Home Ministry’s March 29 circular that had mandated payment of full wages during the lockdown period.

The apex court bench has posted the petitions filed by various companies against the March 29 circular, for further hearing in the last week of July. 

Background

The centre in an affidavit last week, had submitted in the Supreme Court that its March 29 notification on full payment of wages to workers by their employers during the lockdown was legally valid. The central government claimed that the circular was aimed at reducing the financial hardship of the lower strata of society, labourers and salaried employees.

However, the government stated that the order was never a permanent measure and has now been withdrawn. It said that the companies and firms that 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.

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