Analysis on Lockdown

The lock down announced by the prime minister came in to effect from 25th March
2020. As a result, all movements of men and materials came to a complete standstill
(essential services being exempted). Resultantly neither there could be any
manufacturing, trading, imparting services or ability to provide work nor employees are
able to discharge their obligations. The lock down is for 21 days. 
 
The moot question arises is whether an employer is liable to pay wages and the
employees legally entitled to receive wages for the period of lock down.
 
Any cessation or stoppage of work by an employer can either be by way of
1. Closure
2. Lock out, 
3. Lay off
 
In the present context such a lock down is not a closure. The employers have no
intention to close their activities totally and permanently. They have a desire to work but
are unable to do. So, this does not amount to a Closure.
 
Similarly, it is also not a lock out. Lock out is imposed due to the difficulty caused by the
unreasonableness of the employees. In the present context there being no danda by the
employer from its employees, such stoppage does not amount to a lock out. 
 
The only possibility is that of Lay off. Industrial Disputes Act defines lay off as the
inability of the employers to provide work to its employees either due to accumulation of
stocks, shortage of power, breakdown of machines or reasons which are beyond the
control of the employer. The employer becomes liable to pay 50 percent of the wages
for the days of such lay off. The industrial Disputes Act does not give a right to the
employers to give lay off. It only defines the meaning of lay off and if the employers
enjoy a right to give lay off, then in that eventuality shall have to pay 50 percent of the
wages to the laid off employee. 
 
The right to give lay off flows either from the industrial employment standing orders Act
or by a letter of appointment.
The standing order are applicable to only those companies which had 50 or more
persons in its employment on any day. If the establishment does not have or has 50 or
more employees, then shall have to depend upon the letter of appointment which
become a contract determining the service conditions, including the right to give a
layoff. 
 
An employer who neither employed or employ 50 or more employees nor has any letter
of appointment incorporating the right to affect a layoff, do not have any right to lay off
its employees and of yet resorted shall become liable to pay full salary to the laid off
employee. 
 
Those establishment having 50 or more but less than 100 employees are covered under
Industrial Employment Standing Orders Act. These Standing Orders (SO) provide a
right to lay off. Whether these establishment can treat the period of lock down as lay off
and pay only 50 percent wages for the period of lock down, shall be discussed
separately below.
SO also provides that in cases like civil commotion, epidemic, workers can be
temporarily unemployed for a reasonable period and the period of such unemployment
shall be treated as leave with pay to the extent as available and the balance as leave
with our pay.
 
Such industry having 100 or more employees are required to take permission by giving
three months’ notice to the government. 
 
We have considered and discussed the various provisions under various labour statutes
pertaining to the entitlement or not of wages for the period of lock down.
 
Government of India is concerned about the welfare of the workers and have from time
to time issued appeals of not to terminate and not to deduct any wages for any class or
categories of employees. It has also appealed to landlord as not to evict tenants.
 
Home Ministry by an order No. 40_3/2020 DM(A) dated 29_3_2020 directed Chief
Secretary to follow Order dated 24/3/2020, 25/3/2020 and 27/3/2020 issued by Ministry
of Home Affairs in its legislative powers under Section 10(2)(1) of the DISASTER
MANAGEMENT ACT, 2005(DMA)
 
The ministry in exercise of its power under DMA has issued orders directing
implementation of measures to stop movement of migrants providing them with
quarantine facilities of food shelter and ENSURING PAYMENT OF WAGES and
noneviction of tenants. Its strict implementation needs to be ensured.
 
In my opinion DMA shall prevail over the standing orders and industrial Disputes Act. 
 
There are certain following questions raised by employers...
 
1. Whether am employee who has not worked during the period of lock down entitled to
wages for the period of lock down?
Ans. Yes. He shall be deemed to be present and entitled to full wages from 23rd March
to 31st March 2020.
 
2. Can the absence from 23rd March to 31st March be adjusted in his privilege leave?
Ans. Legally it cannot be unless the employees’ consent. This is not a situation as
contemplated under the standing orders. The provisions of DMA and the orders made
therein shall prevail and be binding.
 
3. Are contract workers, probationary apprentice temporary casual trainee also entitled
to full wages for the lock down period?
Ans. Yes.
 
4. Can the employers reduce or deduct the salary?
Ans. No
 
5. Is the employees also entitled to inventive or production bonus besides his other
emoluments for the lock down period.?
Ans. If such inventive is related or linked to productivity or performance, then it shall
NOT be wage and need not be given.
 
6. Can the employers pay salary after 7th April for the month of March?
Ans. The payment of wages act provides for the payment of wages not later than 7th
day of the subsequent month.
 
7. What is the scheme announced by finance minister for provident fund?
Ans. Those employers having less than 100 employees and out of theses not less than
90 percent are covered under provident fund, the contribution both that of the worker
and employer shall be paid by government for the three months.
 
8. Is employer liable to deduct Provident fund from the march salary?
Ans. Yes. Due date for payment of PF is extended from 15/4 to 15/5. It is not extended
for payment bod ESI contribution.