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Will Covid-19 Terminate Your Employment

The world is facing catastrophic situation due to the outbreak of Covid-19. World Health Organization (WHO) has declared Covid- 19 or Coronavirus as a pandamic. All the sectors globally are terrifically affected by the virus. A sensitive query is raised on survival of people like us.

One question that will definitely haunt all of us is what if your salary stops getting credited to your account at the end of every month?

Here is a brief overview of the applicable laws and the Government approach to this issue. To start with it is very essential to note that following are the major laws dealing with the present pandemic situation:
  1. The Epidemic Act, 1897
  2. The Disaster Management Act, 2005
  3. The Indian Penal Code, 1860
Along with the above mentioned legislations, there are many laws in today's time that play a very crucial role, such as the laws related to contracts, arbitration, intellectual property rights, medical practice etc.

The Disaster Management Act, 2005 was enacted with the sole purpose to provide for the effective management of disasters and for the matters connected therewith or incidental thereto

The term disaster is defined under Act as:

disaster means a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or manmade causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area”[2].

The present pandemic situation would therefore be termed as disaster under the Indian Laws. The Disaster Management Depart of Ministry of Home Affairs has declared Covid-19 as notified disaster vide notification dated 14th March 2020[3]

The National Executive Committee passed an order under section 10 (2) of the Disaster Management Act, 2005 on 29th March 2020. Section 10 reads as under:

10. Powers and functions of National Executive Committee:

(1) The National Executive Committee shall assist the National Authority in the discharge of its functions and have the responsibility for implementing the policies and plans of the National Authority and ensure the compliance of directions issued by the Central Government for the purpose of disaster management in the country.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the National Executive Committee may:
  1. act as the coordinating and monitoring body for disaster management;
  2. prepare the National Plan to be approved by the National Authority;
  3. coordinate and monitor the implementation of the National Policy;
  4. lay down guidelines for preparing disaster management plans by different Ministries or Departments of the Government of India and the State Authorities;
  5. provide necessary technical assistance to the State Governments and the State Authorities for preparing their disaster management plans in accordance with the guidelines laid down by the National Authority;
  6. monitor the implementation of the National Plan and the plans prepared by the Ministries or Departments of the Government of India;
  7. monitor the implementation of the guidelines laid down by the National Authority for integrating of measures for prevention of disasters and mitigation by the Ministries or Departments in their development plans and projects;
  8. monitor, coordinate and give directions regarding the mitigation and preparedness measures to be taken by different Ministries or Departments and agencies of the Government;
  9. evaluate the preparedness at all governmental levels for the purpose of responding to any threatening disaster situation or disaster and give directions, where necessary, for enhancing such preparedness;
  10. plan and coordinate specialized training programme for disaster management for different levels of officers, employees and voluntary rescue workers;
  11. coordinate response in the event of any threatening disaster situation or disaster;
  12. lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster;
  13. require any department or agency of the Government to make available to the National Authority or State Authorities such men or material resources as are available with it for the purposes of emergency response, rescue and relief;
  14. advise, assist and coordinate the activities of the Ministries or Departments of the Government of India, State Authorities, statutory bodies, other governmental or non-governmental organizations and others engaged in disaster management;
  15. provide necessary technical assistance or give advice to the State Authorities and District Authorities for carrying out their functions under this Act
  16. promote general education and awareness in relation to disaster management; and
  17. perform such other functions as the National Authority may require it to perform.”[4]

The said Order dated 29th March 2020 directs respective States and Union Territories to issue directions to protect the workers from non-payment of wages from their employers. The relevant portion is read as:
All the employers, be it in the Industry or in the shops or commercial establishments to 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[5]

Furthermore, The Ministry of Home Affairs has issued advisory dated 20th March 2020 relating to advices to all the private and public employers.

The relevant portion reads as :
in the backdrop of such challenging situation, all the Employers of public/private establishment may be advised to extend their corporation by not terminating their Employees, particularly casual or contractual workers from job or reduce their wages.[6]

On Perusal of the Order dated 29th March 2020, it is pertinent to note that specific reference is made to migrant workers/labourers. The notification is issued with the intension to ensure the application of lockdown measures in the whole country and that there is no movement of migrant workers from one state to another. Terms such as ‘to mitigate the economic hardship of migrant workers' are explicitly used. This indicates that the Order would be applicable to protect the interest of migrant workers and not to the other employees or any Private Institution/Organisation.

It is now essential to understand the scope and ambit of the Notifications/Orders issued by the Ministry of Home Affairs and the State Government under the Disaster Management Act, 2005. Section 51 of the said Act penalizes any act of obstruction or any act to refuse compliance under the Act. The only exception under the said Act is that if the obstruction or non-compliance is backed with a reasonable cause. In the present pandemic scenario such as financial inability, bankruptcy, non-performance would be considered as a reasonable cause. Thus, if the employers present a case of non-compliance backed up with a reasonable cause, the provisions of said Act is exempted under the Disaster Management Act, 2005.

On understanding the above proposition, there is no clear mandate for the Private Originations/Institution to comply with the Orders of payment to the employees during the lockdown period.
It is interesting to note that, Maharashtra Government has ordered no deduction of wages by the employers during lockdown period. A notification to that effect has been issued on 31st March 2020 by the Maharashtra Government.[7]

The said Notification provides directions to the Private Institutions/Organisations to not terminate any employees and to pay full wages. As the said notification makes it mandatory for the Industries to pay full wages to its employees without any deduction, a Mumbai based textile firm has filed a Writ Petition bearing No WP (civil) 471 of 2020[8] under Article 32 before the Supreme Court of India.

The Petitioner in the said case has termed the said Notifications/Orders as arbitrary, illegal and in violation to the Constitution of India. The said matter is pending before the Hon'ble Supreme Court and the Court has called upon the Government to provide clarifications of the said Notifications/Orders.

Thus, from the detailed understanding of the present situation it can be concluded that the above Notifications/Orders are not clearly applicable to the private establishments. The clarity on the issue is yet to be pronounced by Supreme court of India.

  1. preamble – Disaster Management Act, 2005
  2. section 2(d) – Disaster Management Act,2005
  3. Notification dated 14th March 2020 vide No. 33-4/2020-NDM-I
  4. Section 10 – The Disaster Management Act, 2005
  5. Notification dated 29th March 2020 vide No. 40-3/2020-DM-I(A)
  6. Notification dated 20th March 2020 vide No. M-11011/08/2020
  7. Government Resolution No. Misc/2020/4/9
  8. Nagreeka Exports Limited v/s Union of India & Ors.rch 2020 vide No. 33-4/2020-NDM-I
  9. Section 10 – The Disaster Management Act, 2005
  10. Notification dated 29th March 2020 vide No. 40-3/2020-DM-I(A)
  11. Notification dated 20th March 2020 vide No. M-11011/08/2020
  12. Government Resolution No. Misc/2020/4/9
  13. Nagreeka Exports Limited v/s Union of India & Ors.

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