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VOLUME 2 : ISSUE 5
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ABOUT US

WHITE BLACK LEGAL is an open access, peer-reviewed and

refereed journal provide dedicated to express views on topical legal
issues, thereby generating a cross current of ideas on emerging
matters. This platform shall also ignite the initiative and desire of
young law students to contribute in the field of law. The erudite
response of legal luminaries shall be solicited to enable readers to
explore challenges that lie before law makers, lawyers and the society
at large, in the event of the ever changing social, economic and
technological scenario.

With this thought, we hereby present to you

WHITE BLACK LEGAL: THE LAW JOURNAL

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RETRENCHMENT DURING PANDEMIC AND NATURAL

CALAMITIES
Yash Jain
Amity Law School, Noida
Uttar Pradesh, India

ABSTRACT
Due to the global pandemic of covid-19 many sectors of our economy has suffered a big loss,
like finance sector, education industry, manufacturing units, or even catering or restaurants
and travel industry is also very effected during this pandemic. When we talk about
manufacturing units, obviously we can’t forget about laborer’s, during pandemic many
people have been fired from their jobs similarly when the industries were shut there was no
revenue to give the worker’s wages, so they were fired. In this article we will study about
laws of retrenchment during situations of pandemic and during natural calamities given under
industrial disputes act 1947. Some of big firms have even cut down the salaries of employees
for 3-4 months. Big Corporates /Mnc’s comparatively did not fire any employees nor labor
nor reduced the salary/wages but the work pressure under work from is tremendous. Despite
the dire business environment due to the global spread of coronavirus (Covid-19), Indian
information technology (IT) firms are less likely to take advantage of any major
retrenchment, given the sensitivity of the issue. While this approach goes hand in hand with
major US companies such as Salesforce and Morgan Stanley, their top executives who have
taken on a public sense of non-retrenchment, Indian IT firms, however, are not expected to
take this pledge publicly. This is because unlike many US firms, IT firms in India have never
had a policy of retrenchment due to political reasons even though retrenchment due to “work”
is common.

“India's IT services firms are likely to be politically neutral in the layoffs like many American
firms. But dismissal of employees due to business disruption and declining demand as a
result will not happen in a big way,” said a source familiar with the idea. "Promotions,
bonuses, and fees will be withheld from middle and senior management legislation is enacted
to “provide for the effective management of disasters and related or related matters”. It is
interesting to note that the term "related and related (disaster management) issues"
contributes to empowering the authorities to implement and implement relief measures under

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the Act which have the effect of increasing the interpretation and scope of operation of the
DM Act.

Considering the national vision for the closure and post-MHA Order, it is clear that the said
Order was passed to deal with the disaster and manage the consequences that may arise from
it. DM legislation was promulgated and enacted to address the simplification of the
authorities, at the national and state levels, a crisis and / or a Covid-19 magnitude crisis.

KEYWORDS: GLOBAL PANDEMIC,DISASTER

MANAGEMENT,PROMULGATED

DECLARATION:
I, the undersigned declare that this manuscript is original, has not been published before and
is not currently being considered for publication elsewhere. I wish to confirm that there is no
known conflict of interest associated with this publication and there has been no significant
financial support for this work that could have influenced its outcome. I confirm that I have
given due consideration to the protection of intellectual property associated with this work
and that there are no impediments to publication, including the timing of publication, with
respect to intellectual property. In so doing, I declare that I have followed the regulations of
our institutions concerning intellectual property. As a sole author of this work, I hereby
declare that I will be the corresponding person for the editorial process.

ACKNOWLEDGEMENT:
I would like to thank my mentor Ms. Dipanwita Biswas for her consistent support and
supervision. I would also like to thank our HOI, Mr. Aditya Tomer .I would like to thank all
my colleagues and professors who helped me make this paper a success, really without your
support it could not have been prepared and completed on time. Special thanks to the
anonymous referees for their insightful comments and suggestions. All potential errors in
data interpretation or handling are my own responsibility.

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TABLE OF CONTENTS
1. Introduction 8
2. Retrenchment 10
3. International Scenario 12
4. Conclusion 14
5. Bibliography and References 15

REVIEW OF LITERATURE
ARUSH KHANNA AND LAKSHAY MEHTA
While private establishments are adopting several cost-reduction measures to stay
afloat in times of COVID-19, they must stay aligned to various labor laws and the
guidelines/advisories/notifications issued by various government(s) since outbreak of
the pandemic.

HEATHER LONG
As layoffs skyrocket, the holes in America’s safety net are becoming apparent. Laid-off
workers are struggling to apply for unemployment aid as government websites crash and
phone lines have hours-long waits. Then some are finding they do not even qualify for help.

ABHA BHATTARAI
Many of the newly jobless have not been able to file for unemployment benefits yet because
the Web portals in their states are down. The problems are exacerbated by low staffing levels
at state unemployment offices that did not expect such a surge anytime soon. In mere weeks,
the pandemic is on track to usher in a magnitude of unemployment that took months to reach
during the Great Recession.

Kim Rives Miers, Mishell Parreno Taylor, and Andrew Gray

In the midst of raging wildfires in Northern California and the aftermath of hurricanes Laura
and Marco in the Gulf states, many employers are wondering how to respond and what
happens next, particularly where employers have already taken measures in response to
COVID-19. After the waters and fires subside, employers will face a host of legal and
practical issues across multiple jurisdictions. This article details some of the many
employment questions that may arise in the near term and highlights key considerations in the
impacted jurisdictions.

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INTRODUCTION
The status quo from this epidemic due to the spread of the Corona virus. The real danger is
the spread of infection in many people and especially the lower social structure, which will
have no control over it. Not only is there a lack of a pandemic-related medical facility but a
lack of resources to deal with the consequences of a serious condition if the infection
continues to spread. The whole business has collapsed due to a lock on the floor and the
revenue will flow out of cash. Another is that medical-related products, all exports will be
misused due to the situation in other countries. In the area the most directly affected areas
will be restaurants and hotels or tourism in general due to fear of psychiatric treatment and
due to declining costs due to the general business crash. It is estimated that there will be no
business for the next five to six months after which a prosperous business will be insufficient
to finance the profits.

Owners of various facilities closed their business immediately and only emergency care is
guaranteed including hygiene services. Govt's directions are followed by everyone in a letter
and in the spirit. An indication that employees' salaries will not be deducted from the
continuous locking period and that their services may be terminated will also be followed for
assistance reasons. However, you need to look at finances the effectiveness of these
interventions in a few months, especially if the situation does not improve.1

Given the general limitation that there would be no business for the next five to six months
after which a prosperous business would not be sufficient to maintain profitability or survival.
In fact, it is rumored that there will be a collapse in the business of those who must repay
loans and other loans. Therefore, there are very limited choices of decisions. The legal status
of human resource conservation has been called into question.

KEYWORDS: STATUS QUO, EPIDEMIC,PROFITABILITY

https://www.corporateprofessionals.com/articles/legal-view-on-labour-issues-during-covid-pandemic/

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WHAT STEPS HAS THE GOVERNMENT TAKEN?

As advised by the Department of Labor on 20 March 2020, all public and private enterprises
are instructed to continue to pay their employees' salaries and not to reduce their salaries
during this period. The department also appealed to employers not to terminate or retrench
their employees and that all employees who are on leave at this time would be considered as
employees without a pay cut.

On March 29, 2020, the Department of Home Affairs issued an order under Section 10 (2) (1)
of the Disaster Management Act which requires state governments to take the necessary steps
to ensure that all employees are paid their dues without pay, the due date. It should be noted
that under Section 72 of the Disaster Management Act, any order issued by the State shall
violate or prevail in any other law at that time. Now, since the letter dated March 20 was an
advice and not a command, it has no binding nature. (Salary Reduction) Wage cuts are a
common remedy adopted by employers as it is one of the company’s biggest costs. Wage cuts
are often preferred for retrenchment and retrenchment by both parties, because employers
avoid job losses and pay retrenchments and retrenchments, while for employees, they are still
employed, and have a pay gap.

Although the March 20 advice suggested that employers would avoid relying on wage cuts as
a means of reducing losses, sectors such as the Automobile and Aviation industries in India
were particularly affected by the Covid-19 outbreak and were forced to rely on wage cuts.

Employment Law, Retrenchment is defined under Section 2 (kkk) of the Industrial Disputes
Act, 1947. Measures taken by employers when they fail to pay their employees or provide
temporary employment due to losses fall under the Retrenchment reason. They can be
temporary and permanent, although the size of IDA and operations in India only provide
temporary retrenchment, and the term should not be used in the same way as retrenchment.

Under the Industrial Disputes Act, 1947 Section 2 (oo) defines retrenchment as termination of
employment by an employer for non-disciplinary and punitive reasons and the necessary
compensation of 15 days for continuous payment of ongoing work annually.

As the March 2020 draft letter advising employers not to terminate their employees is not
binding, retrenchment becomes a viable option for employers and can be considered a last

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resort. The Supreme Court on the issue of retrenchment has ruled that the employer has the
right to dismiss employees in the event of a residual absence unless prohibited by law.2

Although all required procedures such as notice periods, proximity to government officials,
retrenchment compensation, unpaid payments etc.

KEYWORDS: PUNITIVE, DISASTER MANAGEMENT ACT,INDUSTRIAL

DISPUTES ACT,AVIATION,RETRENCHMENT

RETRENCHMENT
The Central Government has issued Advisories and Directions under the Disaster
Management Act 2005 handling several aspects of the pandemic. One such order under
Section 10(2) was issued on March 29 handling the difficulty of payment of wages to
workers. The order has been challenged on several grounds by employers including
on the bottom that the Central Government need to provide employers with a subsidy to
satisfy the wage liability during the amount there's no work to be done to satisfy the
liability under the order. The Supreme Court has called upon the govt to reply.

Is there an influence under the Disaster Management Act to make a decision the
question of payment of wages during the amount of lockdown?

Though the DM Act doesn't specifically confer or vest any power with the Central or
the government /Authorities appointed under the Act to direct the payment of
wages/salaries by private establishments, this direction is clearly covered by various
provisions of the Act. it's going to be argued that the Orders are issued pursuant to
Section 35 (l) and 38 (l) of the DM Act which give the Central and government to
require ‘such other matters because it deems necessary or expedient for the aim of
securing effective implementation of the provisions of this Disaster Management Act’,
as also sections 10(1); 10(2)(d) & 10(2)(q).Section 2 of EDA entails the facility to
require special measures and prescribe regulations on dangerous infectious disease .
3 Paying wages to workers may be a measure against the spread of COVID-19. Without

2 Legal Implications of Lay offs, Retrenchment and Wage cuts during . Retrieved November 6, 2020,
from http://www.legalserviceindia.com/legal/article-2386-legal-implications-of-lay-offs-
retrenchment-and-wage-cuts-during-covid-19.html

3https://www.littler.com/publication-press/publication/navigating-natural-disasters-during-pandemic-key-
considerations-your.

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wages, workers cannot afford soaps, sanitation and other health care and safety
requirements.

Is an employer susceptible to pay wages during the Covid-19 nationwide lockdown

period?

The house Secretary, The Ministry of Home Affairs (MHA) and therefore
the Government of India, through an Order dated 29.03.2020, directed the authorities of
the State/Union Territories to require necessary action and to issue the required orders to
their District Administration / Police Authorities so as to make sure that each one the
employers, shall make payment of wages to their workers on the precise maturity , with
none deductions for the amount during the nationwide lockdown when the commercial
and business establishments are under closure. additionally, The Ministry of labor &
Employment, the govt of India through its letter dated 20/03/2020, advised all the
employers of Public and personal Establishments to not terminate their employees or
implement any quite wage cut. The Order, specifically laid an emphasis on casual or
contractual worker.4 The Order said that if any worker took any leaves, he should be
deemed to be at work with no substantial wage cutting during the time of the nationwide
lockdown. Further, if the utilization space is deemed as non-operational thanks to the
COVID-19 lockdown, the workers of such units shall be deemed to get on duty. In
certain states like Haryana, the Director, Industries of Commerce, Haryana through their
advisory dated 27/03/2020 has advised all the economic and commercial establishments
to transfer salaries to those that are employed under them.

What's the meaning of “workers” for the aim of payment of wages?

On the idea of the Orders and Advisories issued by Central Government and certain State
Governments, wages must be paid to regular, casual & contractual workers. Albeit this is
often not detailed within the Order dated 29/03/2020 under the Disaster Management
Act, all workers shall be covered. “Workman” as defined under the economic Disputes
Act 1947 broadly includes a person (including an apprentice) employed in any
industry to try to any manual, unskilled, skilled, technical, operational, clerical or
supervisory work for hire or reward, whether the terms of employment be express or
implied, but excludes those employed mainly during a managerial or administrative

4 Explainer: Right to Wage during Lockdown due to Covid-19 - The Leaflet

,https://www.theleaflet.in/right-to-wage-during-lockdown-due-to-covid-19/#.

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capacity. It excludes those workers who are employed during a supervisory capacity
& those that draw wages exceeding Rs 10,000 per mensem. As per Section 3 of the
Payment of Wages Act, the employer is obligated to pay wages to “all persons employed
by him.” consistent with Section 3(2) of the Act, this covers permanent, temporary,
casual & badli workers. Section 3(2) further specifies that it shall be the responsibility of
the employer to form payment of all wages just in case a contractor fails to form the
payment. Section 21 of the Contract labour (Regulation & Abolition) Act, 1970,
provides an equivalent.

What's the definition of the term “wages” in context of what need to be paid of
payment to workers?

The term “wages” has been defined under the economic Disputes Act, 1947 under
Section 2 (gg) (rr) within the Industrial Disputes Act, 1947. Accordingly, wages
constitute all remuneration that's capable of being expressed in terms of cash, which
might, if the terms of employment, expressed or implied fulfilled, be payable to a
workman in respect of his employment or of labor wiped out such employment. This
includes allowances like the dearness allowance that the work man could also be entitled
to; the worth of any house accommodation, or of supply of sunshine , water, medical
attendance or other amenity or of any service or of any concessional supply of food-
grains or other articles; any travelling concession; any commission payable on the
promotion of sales or business or both; 5However, it doesn't include any bonus; any
contribution paid or payable by the employer to any pension fund or provident fund or
for the advantage of the workman under any law for the nonce in force; any gratuity
payable on the termination of his service.6

INTERNATIONAL SCANERIO
Countries around the world are taking steps to combat the difficult Covid-19 crisis by
rolling out special and dynamic programs to improve employers' ability to pay their
employees. In the United Kingdom, all employers can receive 80% of government
subsidies over the next three months in respect of up to 2,500 GBP per month. Ireland
has provided an 85% temporary wage subsidy, up to a weekly take-off rate of 412 Euros,
an increase of about 70% given in March.

5 https://www.legaleraonline.com/articles/lay-off-and-retrenchment-in-the-time-of-covid-19.
6 https://www.washingtonpost.com/business/2020/03/19/unemployment-insurance-today-coronavirus/.

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Similarly, the United States has provided income support for $ 1200 for an adult and $
500 for children. An additional $ 250 million has also been raised to increase
unemployment insurance. All Japanese citizens will receive a cash payment of 100,000
yen. The South Korean Central Government will provide checks for assistance to
households falling below 70%, including more than 14 million households. This
assistance test will cost up to $ 829 per family.

Workers in France will receive a share of about 84% of their salaries while junior
workers will receive 100% of their salary. The Danish government pays 75% of wages
for 3 months if employers do not lay off their employees. Austrian State has guaranteed
90% of the total salary below 1700 Euros, 85% of wages below 2,685 Euros and 80% of
wages below 5,370 Euros. Austrian students receive full compensation. In Spain,
workers will receive full pay during the closing period. There is a problem of direct
dismissal and there is a provision for temporary and domestic workers. German workers
have a $ 26 billion Euro insurance fund that guarantees workers at least 60% of their
basic salary. Italy has provided 5 billion euros in the high-wage program to those in the
sector. In addition to this, there will be a single payment for various other categories of
employees. Argentine employers are not allowed to fire any employees within 60 days
and are required to pay a small portion of their salaries. Australia has provided a $ 130
billion wage subsidy business in Australia, which is 6.5% of Australia's GDP. China has
provided temporary living allowances for immigrant workers and other benefits to
unemployed Chinese. The Saudi Arabian government will pay 60% of the salaries of
Saudi workers in depressed companies over the next three months. Poland will provide
subsidies for workers' wages up to 40% of the official average salary according to certain
conditions.

Greece has offered a grant of 800 Euros to employees of the affected companies. In
Serbia, 50% of the minimum wage is paid for three months by employees in large private
companies and now unemployed workers. Norway has arranged for temporary workers
to receive compensation of up to 50,000 Kroner a month. The Netherlands salary
provides temporary compensation for corporate salary expenses up to 90% of salary.
Kenya has provided 100% tax benefits to all people with a total monthly income of up to
$ 225. These are the workers who fall under the category of low-paid people. In
Indonesia, producers who make an annual income under a given slide will be exempt
from tax for six months.

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Unemployed workers in the Czech Republic will receive 60% of their salaries while
factory workers who should have resigned will be fully compensated. In Canada, for all
those who have lost their money due to the Covid-19 crisis, they will be paid $ 2,000 a
month in Canada. Belgium has increased the temporary unemployment benefit from 65%
to 70% of total income and aided the self-employed.

Unorganized Brazilian workers and unemployed people will receive a new temporary
benefit if 120 Dollars a month, for three months, under certain conditions.

CONCLUSION
Employers have a number of factors to consider in response to employees affected by
wildfires or hurricanes, including balancing the needs and behavior of employees who are
already strongly affected by the COVID-19 epidemic by continuing to do business. In
addition to the topics highlighted here, employers may need to consider critical issues related
to employee assistance programs, property claims and damages, employee compensation
questions, benefit options, and tax reporting activities - all in addition to the basic
operational requirements amid the epidemic uncertainty. We are always ready to answer any
questions and help as best we can. In addition to the adverse conditions, experts have found a
silver lining. There are companies that see this as a great place to gather top talent. They
used this opportunity to reflect on their post-epidemic recovery and the relapse phase.
Technology will be used extensively, in this phase and beyond, said Vikram Ahuja, founder of
Talent500 by ANSR, a company that collects talent in the IT field. Experts advise workers
with job security to adapt to changes, and those who have lost their jobs to take advantage of
the situation. “Employees with sacks must be open to retaliation and skills development. This
is an opportunity to invest in skills development. Open it to private and private financial
services because there are opportunities there,” said Hari Krishnan. Uncertainty is high,
which means that job opportunities may be more digitally available in a few months, as
compared to previous years.

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BIBLIOGRAPHY AND REFRENCES

Labour & Industrial Acts & Laws (Safety Management) by D S S ganguly and C S
Changeriya

Labour Industrial Laws by S.N. MISHRA

Labour and Industrial laws bare act by Universal publication

Industrial Dispute act 1947 by Universal’s

Minimum Wages act 1946 by Universal’s

Disaster Management Act 2005 by Universal’s

MANUPATRA.COM

SCC ONLINE.IN

INDIAKANOON.ORG

IPLEADERS.ORG

LIVEMINT.COM

LIVELAW.IN

BAR AND BENCH.IN

LAW TIMES JOURNAL

LEGALLY INDIA

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