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The Supreme Court on Friday ordered that there will be no coercive action against employers who did not comply with a March 29 government notification directing companies to pay wages to employees for 54 days during the lockdown period.

“No coercive action against employers till July last week,” said the top court. It emphasised that employers and employees should talk and settle the matter.

A bench comprising Justices Ashok Bhushan, Sanjay Kishan Kaul and M.R. Shah asked the employers to negotiate a settlement with their employees.

“There can be no denial that lockdown measures which were enforced by the Government of India had serious consequences both on employers and employees,” observed the bench.

The bench added that companies that operated during the lockdown, but were not operating on full strength too should hold settlement talks with their employees.

“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 of above 50 days and if any settlement or negotiation can be entered into between them without regard to the order dated March 29, the said steps may restore congenial work atmosphere,” said the top court.

The bench asked the Centre to file a detailed reply on petitions challenging the notification within four weeks. The bench will conduct further hearing on the matter in the last week of July.

The apex court noted that in case the talks failed, parties could approach the Labour Department, which could facilitate a settlement, but efforts should be made to settle disputes between workers and employers.

“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,” said the top court.

The top court emphasised that the private establishments and workers sit together to negotiate to settle disputes relating to wages. The bench also asked state governments to facilitate such settlements and submit reports before the labour commissioners.

The top court emphasised that “piecemeal consideration” cannot be made, and Centre and state governments should circulate court order through labour departments to facilitate settlements.

“The state is also under an obligation to ensure that there is smooth running of the industrial establishment and the disputes between the employers and employees may be conciliated and sorted out,” noted the court.

The bench noted that workers who are willing to work should be allowed to work notwithstanding disputes regarding wages.

“The private establishment, industries, employers who are willing to enter into negotiation and settlement with the workers/employees regarding payment of wages for 50 days or for any other period as applicable in any particular state during which their industrial establishment was closed down due to lockdown, may initiate a process of negotiation with their employees organization and enter into a settlement with them and if they are unable to settle by themselves submit a request to concerned labour authorities who are entrusted with the obligation,” said the top court.

The court added that in the event a settlement is arrived at, that may be acted upon by the employers and workers irrespective of the March 29 order issued by the Ministry of Home Affairs.

The petitions were filed by a Punjab-based collective of 41 small scale organisations, urging the court to set aside the March 29 order of the Ministry of Home Affairs (MHA) directing private establishments to pay full wages to the workers during the period of the lockdown.

The petitioners challenged the constitutional validity of Section 10(2)(i) of the Disaster Management Act, 2005. Punjab-based Ludhiana Hand Tools Association claimed that the March 29 MHA order under the Disaster Management Act, 2005, was violative of Articles 14, 19(1)(g), 265 and 300 of the Constitution and that it must be “struck down”.

The petitioners maintained that Section 25M of the Industrial Disputes Act provided for the right to layoff workmen due to natural calamity.

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