Monday, 8 August, 2022
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Modi govt telling businesses to pay staff but cutting its own employees’ salary is untenable

For business hit by lockdown, the MHA served a bigger jolt with its flip-flop over proposed penal action if company employees test Covid-19 positive.

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For over a month, almost all economic and commercial activities have been at a standstill due to the nationwide lockdown, which came into effect on the orders of the Narendra Modi government on 25 March.

Manufacturing units and sales outlets are shut, no monetary transactions are taking place between owners of industrial units and buyers, payments are stuck, job losses are mounting and will, at least in the next fiscal quarter, continue to rise.

And yet, the Modi government wants industrialists and businesspersons to keep paying salaries to their staff — even as governments in states such as Andhra Pradesh, Kerala, Rajasthan, Odisha, and Maharashtra have announced salary cuts for their staff and the central government has frozen dearness allowance. This contradiction is unsustainable. 

It seems that the bureaucrats didn’t realise that these orders may be legally untenable.

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Governments’ excuse

Some states have warned property owners against forcing tenants to pay house rent or evicting them in case they can’t pay. The Arvind Kejriwal-led Delhi government has assured landlords that they will be compensated if workers and students fail to pay the rent for the lockdown period. It remains unclear how feasible or legally implementable this is.

The central and state governments have cited the Epidemic Diseases Act, 1897 and the Disaster Management Act, 2005 while issuing the necessary directions, with some states playing it safe by terming these as advisories.

Many industrial associations have apprised the central and state governments about the inability to meet salary demands of the staff, pointing to lack of any kind of economic activity.

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A misplaced warning

The bigger jolt came from the Union home ministry’s flip-flop over proposed penal action against the directors and management of companies whose employees test Covid-19 positive.

Initially, the ministry of home affairs (MHA) had indicated that penal action would be taken but later clarified that such penalties would be applicable only if the offence occurs with “consent, cognisance or negligence of employer”.

Who will decide if an employer was negligent and how will the negligence be established? Significantly, even though the MHA may have clarified, the damage – insofar as sending out a misplaced warning to employers – may have already been done.

There can’t be two different yardsticks under the same law – one for the government and another for the private sector.

Also read: Beyond speech, Modi must open govt purse for poorer Indians, businesses affected by COVID-19

Is it even legal?

Petitions filed in the Supreme Court challenging the home ministry’s arbitrary directions highlight how they are violative of Articles 14 and 19 of the Constitution, which guarantee the right to equality and the right to do business.

A petition filed by textile exporter Nagreeka Exports challenges the Centre and the Maharashtra government’s order to pay full salary to employees, workers and contract labourers during the lockdown period even though factories are shut.

It argues against the directive, pointing out that the state government itself has decided to either cut salaries of employees or pay them in instalments.

The cash-rich government of India as well as BJP-ruled Uttar Pradesh have recently decided to freeze the dearness allowance payable to public officials. Tamil Nadu, too, has joined the list.

If the government can arbitrarily take such anti-employee decisions, why should the industry face such restrictions?

Legally, as clarified by advocates Suren Uppal and Sneha Baul to the Federation of Indian Chambers of Commerce and Industry (FICCI), while it may be okay for the government to make it mandatory for cash-rich corporates to pay salaries to their staff, there is no law that can be cited to in case of business owners even if their employees could be facing severe stress because businesses are shut “due to force majeure conditions such as natural calamities”.

All they need to legally establish is that the employees couldn’t have performed their duties from home.

Ideally, in testing times like these, the government works closely with various stakeholders to ensure that all genuine concerns are dealt with so that whenever normality returns, the damage is within manageable limits. But the Narendra Modi government has shown its inability to work with industry leaders and help businesses tide over the lockdown-induced difficulties. Perhaps, it would do well to not exacerbate their issues with such legally tenuous orders.

The author is a senior journalist. Views are personal. 

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  1. is there a government rule to reduce the salary of those whose salary is above rs.10000 due to lockdown?

  2. Hi..
    I was working with Faridabad export house, my company asked me to leave post on 14th May with any intimation as i Provisional period and even our factory terminated many more staff however my Boss instructed all senior staff to work from home through ASANA app. He kept us busy whole day through zoom meeting/ Asana task/ phone calls to lineup and update all tasks to smooth working after office is open after lockdown. As lock down extended in 1st week of April but our factory manged to got some permission from government to resume work with short staff and he asked me also in my department to work in office during lock down. Now its been 3 weeks they have not cleared my dues yet for April and may , nor even there is no information when the dues will get cleared.
    Please help !

  3. Hi..

    I working in Delhi, company not given my full salary of march month they hold 10 days salary and clearly says not any payment in all lockdown time
    They put us on leave till lockdown company not reliased any staff salary everyone is in trouble plz help us

  4. Incase some company does not pay full month salary of March 20, what action can be taken against the employer

  5. How we can complaint against company like they are not getting pay of April. I work in gemini software solution Pvt ltd.

  6. Need clarification, incase if PM Modi has declared all public and private companies not to cut salary or lay off, then why the private sector is still not paying to their employers. There was an advisory released by Secretary of India, which is looped to all States and addressing all sectors. Under Covid 19 our country has already lost so many life’s now if government has instructed lockdown which eventually people are following, how people will survive without pay.

  7. Need clarification, incase if PM Modi has declared all public and private companies not to cut salary or lay off, then why the private sector is still not paying to their employers. There was an advisory released by Secretary of India, which is looped to all States and addressing all sectors. Under Covid 19 our country has already lost so many life’s now if government has instructed lockdown which eventually people are following, how people will survive without pay. Modi ji n advisory states not to cut salaries but company is not paying. Please help me to understand what actions can be taken against the company.

  8. @Maneesh

    Please dont write wrong articles.
    You mention government has cut salaries, the fact is increment of DA is not allowed.
    Please check your facts

  9. If new rules to force industries pay without production means later date is bankrupt and closed industries. Sickness need not to be penalized. Industries ultimately feeds hunger free environment.
    Be composenate in difficult situation. Fight crona not production.

  10. Narendra Modi does what he thinks is right never he thinks if it is right. All his actions and talk are aimed at the electorates of which are 90% are ill informed and fed with fake information that puts other Political parties in a box. Govt. has no right to decide on its own to deprive its employees of their salary that is their property which is protected under the constitution. If DA and DR for its employees and pensioners can be withdrawn then the other component of the salary ie Basic can also be withdrawn. This is illegal unless employees concern or the Pensioners concern consent to donating the amount. Wearing mask of Covid -19 people are asked to express their solidarity and patriotism while the Govt. led by Modi is not in tune with that. Why is Modi planned to build a new PM, Vice President and all the govt. offices residences spread over the Delhi is going to be concentrated in one area in between Rastrapati Bhavan and India Gate with the expenditure of Rs. 20000 crore? This is just the one item like this wasteful expenditure in giving security cover to its Party men all over India and its choosy men like Ramdeb Baba and the expenses are in thousands of crores. MPLAD which never used to be accounted for by the CAG and where these money goes was never known to any one is stopped for good but the MLALAD which is much more than the amount that used to be paid to MPs are still paid, Why?

    • Sir, only you believe you are well informed? Please do not forget that the middle class which is educated and well informed has elected Mr Modi. So please get your facts right and nobody will tolerate your intolerance to Modi anymore.

  11. What’s wrong in that. One month of lockdown and suddenly the business are dry if cash ? What about the profits earned year after year for decades ? These businessmen takes in crores of rupees of profit every year. So how is it that a month of business loss has made the situation so grim ? This is the time for them to give back to the society. The money in Swiss banks can now be utilised for the people of this country. Many corporate houses have found out ways and means to work from different locations and yet service their clients effectively. This is ridiculous argument about tenebilty. But always expected from SG cronies in the media. Because Modi has said it, it has to be opposed. Had Raul Vinci said this, then it would have been pearls of wisdom to be lapped up.

  12. The author is not logical. The government has only said to pay salaries to employees. It has not enforced any amount. Just like government freezing DA, other employers too may not pay full payment. However if the employers don’t pay or pay a measly amount, government may intervene. That’s all.

  13. This is a govt .with utmost callousness in every aspect of administration.It only rely upon one or two persons ignoring the others in taking any decisions.Further, it has no legal right to ask the owners and industry men to pay salary in this situation, simply request!! Arbitrarily it has decided to stop DA and forcefully asking for donation to PM CARES fund!! Nonsense !!A govt. with double standard attitude !!!!

  14. Print journalists are showing more and more stupidity. This author thinks that not paying salary is same as not giving increment in allowances or having a small cut. As these stupid authors write for ThePrint, they can give any stupid argument. ThePrint’s quality is going down the drain. By mindless accusing the state and central governments, this stupid author proves that he is totally unfit to write for ThePrint.

    • Only some stupid will oppose this writing!! Where are the money stolen by the thieves like Nirob Modi/Mehul /Kingfisher and all other giants who could not be brought back to this country yet? Crores of money taken from Banks are written off by this govt.Some corporate giants are holding the 99% of country’s wealth and squeezing money from the public by cheating method !! The ministers/MPs/MLAs are possessing crores of money as personal wealth!! Why they are spared ? This govt. is actually for the capitalist…by the capitalist …from the capitalist !!! Catering to the need of 10 or 15 capitalists !! A dishonest, callous, autocratic govt.!!!

  15. Since the private companies can’t be forced to contribute in crores as the government does, where will the money come from? Government has to cut on expenditures. And this is one of the ways to do savings.

  16. Ever faced a situation when u are short on food supplies and kids are hungry ? You n your better half decide unanimously to cut down on your diet just to ensure your kids are fed. Why are you so biased? What agenda are you running? Do you seriously think Indians are this stupid to fall for your propaganda ? Seriously !!!

  17. The government is broke. Expect more such belt tightening. The advice to the private sector is more in the nature of a suggestion. 140 million jobs have been lost. Whenever I visit the temple, say a special prayer for my son’s CEO in New York who makes sure that pay checks go out all over the world to his employees on time.

  18. The govt is not cutting they are not giving a raise. Plus the govt jobs are secure.

    Yesterday BA cut 12,000 jobs how many did Air India layoff ?

  19. Generous with others’ money, ain’t he? Preaching to pay salary without income is outrageous. Industries cannot print money, just as the government does. Let the State and Central governments subsidise the salary bills of private employers.

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