Can the State let employers walk away from lockdown wages?

If the government is serious about standing with the migrant workers, then it cannot leave them to the vagaries of unequal negotiations with employers.

“Dear migrant labourers and daily wage earners…. the country stands with you!” proclaims a Central government advertisement in the newspapers. Notwithstanding this public protestation of solidarity with migrant workers, the government is ready to remove the mandatory wage protection it had offered earlier for the pandemic-induced lockdown period. Attorney General K K Venugopal has requested the Supreme Court to suspend the government’s earlier order on full lockdown wages. Eventual payments he suggested, could be settled through negotiations between workers and employers.

Government ads enumerating its welfare measures for migrant workers list over Rs.1 lakh crore allocation under MGNREGA for employment generation. They also list access to food grain for two months without a ration card and a proposal to set up “Affordable Rental Housing Complexes” in cities so that should such crises recur migrant workers will not have to return to their villages because of unaffordable rents. There is not a word about assured lockdown wages.

On March 29, the Union Home Secretary had issued an order saying, “All the employers, be it in industry or in shops and commercial establishments, shall make payment of wages of their workers at their workplace, on the due date, without any deduction, for the period their establishments are under closure during the lockdown.” Non-compliance of the order would invite action. By mandatorily protecting the wages of the workers during the lockdown the government took a major decision to protect the incomes of the vulnerable.

Section 51 (1)(b) of the Disaster Management  Act mandates punishment up to one year or fine or both for non-compliance. Further if non-compliance results in loss of life or imminent danger thereof, then the punishment may extend to two years. In other words, if any worker forced to flee the city for non-payment of wages died on the way home, the liability for the death could, in principle, be fixed.

The government has not yet put any detailed information in the public domain about numbers of job losses by urban workers or estimates of lost income. A study in “India Forum” by Noman Majid of the ILO’s Decent Work Team for South Asia, has estimated migrant job losses using data from two recent studies. While the Centre for Monitoring Indian Economy estimates that 91.3 million labourers and small traders (corresponding to the categories of casual workers and self-employed) lost their jobs in April, a survey by Azim Premji University showed that 81% casual workers, 84% self-employed and 76% regular salaried workers had lost jobs by mid-May.

Applying these figures to the population adjusted estimates of the government’s Periodic Labour Force Survey 2017-18, Majid concludes that 15.35 million casual workers would have lost jobs by mid-May. Adjust this to the population of 2020 instead of 2017-18 and the number is likely to climb.

The massive shock to the livelihoods of migrant workers is also underlined by a survey conducted of 15,000 households by researchers at Indian Statistical Institute, Delhi. Nearly 77% of households reported job losses in their family and 72% within their social network of family, relatives, and friends. Respondents reported greater job losses in Phase 2 of the lockdown (74%) than in Phase 1(66%). The ISI survey’s job loss perception is in the same high range as that of Azim Premji University.

A different study by Jayan Jose Thomas of the Economics Department of Indian Institute of Technology, Delhi, estimates income lost by migrant workers at about Rs. 4 lakh crore for two months -- nearly 2% of the GDP.

The government began to retreat from its March 29 order when Lockdown 4.0 began. On May 17, the Union Home Ministry rescinded its order on full lockdown wages. It soon became clear that this did not apply only to future wages but also retrospectively to the period from March 25 to May 17.

The Attorney General clarified this on June 5 to the Supreme Court. “If the notification (of March 29) was not issued at that time, there would have been a much larger exodus of the migrant workers. Now the government wants to start economic activity. Please keep in abeyance the scrutiny of the March 29 notification for two months and let employers and employees reach a settlement on payment of wages under the Industrial Disputes Act.” His arguments suggest that the March 29 order was never meant to ensure workers’ wages but was just a tactic to retain workers in the cities.

Some employers have argued in the Supreme Court that the government was not empowered under the Disaster Management Act to direct the private sector to pay full wages to workers. The court has itself raised the same doubt. Employers have suggested that the government pay wages for the lockdown period from the excess funds of ESIC (Employees State Insurance Corporation). They obviously took their cue from media reports that ESIC funds which stood at over Rs.68,000 crore at FY2019-end could be used to give livelihood support to workers hit by the lockdown.

However, the government has not taken this position before the Supreme Court which will pronounce its order on June 12. The apex court’s own attitude was telling. Chief Justice Sharad Arvind Bobde shocked the nation by asking why migrant workers living in temporary government shelters and given free food needed to be paid wages!

If the government is serious about standing with the migrant workers, then it must come forward with a positive plan of its own instead of leaving workers to the vagaries of unequal negotiations especially when labour laws have been diluted in many states. 

If it wants to let employers and companies off the hook on lockdown wages, then it must find other ways of putting cash in the hands of the workers to compensate them. Additionally, it must launch public works – building infrastructure in rural areas -- to provide employment and avoid the livelihood crisis staring them in the face.