INDIA WITHDRAWS ORDERS ON COMPULSORY SALARY PAYMENTS BY COMPANIES

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The Indian government has withdrawn its order issued in March to direct employers’ wages to employers, even with units that remain closed during lockdown. The Ministry of Home Affairs (MHA) issued a new set of guidelines on 17 May which came into effect from yesterday. The attachment attached to the order does not include the order of 29 March.

According to Indian media reports, Annexure mentions six sets of standard operating procedures, mostly related to the movement of individuals.

“Save as provided in the guidelines given by this order, all orders issued by the NEC [National Executive Committee] being effective under Section 10 (2) (I) of the Disaster Management (DM) Act, 2005 Will survive. 18.05.2020, “said MHA.

The March 29 MHA order under Section 10 (2) (I) of the Disaster Management Act, asking all employers to pay wages to workers without any deduction, even though the establishment was closed during the lockdown period.

The industry had petitioned the government to rescind its earlier order on compulsory wage payments as they were facing a cash crunch. Some industrial bodies had also asked the government to deposit the companies’ salary bills through the payment of grants, but this was not agreed due to fiscal constraints.

The constitutional validity of the government’s order on wages was challenged by many companies, who had moved the Supreme Court.

Last week, the apex court asked the government not to take any concrete action against private companies that were unable to pay wages to workers. The court was scheduled to hear the petition this week. Employers have welcomed the new move, citing it as absolutely necessary, especially in the absence of grants by the government to pay wages to industry.