Full Wages Only For Employees On Duty Before Lockdown, Says Bombay High Court

It will cover only those workers who were in employment on the day of the lockdown and had received salary for the prior month, the court said.

A trade union representing 200 employees of Premier Ltd. sought enforcement of an order passed by the Industrial Court which had directed the company to pay the workers with effect from March 1.

The union also sought directions against the Maharashtra government and the labour commissioner to ensure payment of wages for the duration of lockdown, as well as the collector for initiating action against the company for its failure to comply with the ministry’s order.

The automaker had issued notice to its workers in March declaring the suspension of its operations with immediate effect on account of the economic downturn and withdrawal of certain credit facilities by creditors.

A division bench comprising Justice Ujjal Bhuyan and Riyaz Iqbal Chagla concluded that the orders issued by the ministry and the Maharashtra government won’t apply to the workers in the present case.

Extent Of Ministry’s Order

The trade union sought protection under the government’s order arguing that:

• Premier defaulted on paying wages despite the receipt of funds from the sale of an industrial plant which substantially reduced its debt. It failed to pay wages even after receiving directions from the Industrial Court.
• It didn’t offer employment to workers despite their willingness to resume work after the relocation of its premises.
• And so, the workers are entitled to relief under the orders issued by the ministry and Maharashtra state government.

The company argued in its defense that it was classified as a non-performing account by banks due to outstanding dues exceeding Rs 500 crore. It attempted restructuring by selling its industrial plant and relocating, but the process was slowed due to the non co-operation of the trade union.

And lastly, the obstructionist policies adopted by the union resulted in substantial losses to the company due to withdrawal of orders by its clients.

The high court found that the measures adopted by the government were to ensure a status quo on payment of wages and employment. An employee cannot avail the benefit of the orders if she was not in employment and couldn’t receive salary due to any reason for a period exceeding one year, it said.

Noting that the orders cannot be used to circumvent an industrial dispute, the court observed that a balance must be achieved between the claims of the company and the workers. It modified the order of the Industrial Court and directed payment of fifty percent wages to the workers from March 1.