Firms unable to pay wages must submit balance sheets: Govt to SC

SC extends till June 12 its order asking govt not to take coercive action against employers for not paying salaries

The Centre has justified in the Supreme Court its March 29 direction asking private establishments to pay full wages to workers during the Covid-19 lockdown and said employers claiming incapacity in paying salaries must be directed to furnish their audited balance sheets and accounts in the court.
 

In an affidavit filed in the apex court, the government has said the March 29 directive was a “temporary measure to mitigate the financial hardship” of employees and workers, specially contractual and casual, during the lockdown period and the directions have been revoked by the authority with effect from May 18.
 

The affidavit filed by the Ministry of Home Affairs (MHA) said the direction was fully in conformity with the provisions, scheme and objects of the Disaster Management Act and it is not ultra vires.
 

While requesting the top court to dispose of as infructuous the batch of pleas challenging the March 29 notification, the government said the “impugned notifications have outlived their life and adjudication of the same would only entail an academic exercise as it would not be in the interest of public to seek recovery of salaries paid to employees and workers for the said 54 days”.

The Centre said it would neither be in the interest of justice nor of the public to adjudicate the validity of notification which operated only for 54 days — from March 25 to May 17 — to mitigate the financial hardships of workers and employees.
 

“In the event this court is not inclined to dispose of the present proceedings as having become infructuous and is inclined to adjudicate this matter on merits, the petitioners-employers must be directed to furnish proof of their incapacity to pay wages and salaries in terms of the order dated March 29, by placing on record their audited balance sheets and accounts,” the affidavit said.
 

No coercive action for now: SC
 

The Supreme Court on Thursday extended till June 12 the operation of its May 15 order asking the government not to take any coercive action against companies and employers for violation of its March 29 circular on payment of full wages to employees for the lockdown period. The MHA, in its circular, had asked all employers to make payment of wages to their workers without any deduction for the period their establishments were under closure during the lockdown.

The Secretary (Labour & Employment) had also written to chief secretaries of states to advise employers not to terminate employees from job or reduce their wages amid the challenging situation of the pandemic. A Bench of justices expressed its concern over the MHA’s circular, saying 100 per cent wage payment has been ordered with the direction that there would be prosecution of offending employers.