EMPLOYMENT LAW RELATED FAQs - IN THE TIMES OF COVID-2019


EMPLOYMENT LAW RELATED FAQs - IN THE TIMES OF COVID-2019

By: Aarushi Saxena, Associate at Qui Prior Law Associates

  • Do the advisories issued by the Ministry of Home Affairs with respect to the non-termination of employees have binding value?

The MHA order issued on March, 29, 2020 has been issued under section 10 (2) of the Disaster Management Act, 2005 for payment of wages on the due date without any deduction, is binding. The direction of the MHA, issued under Section 10(2)(l) of the Disaster Management Act shall have binding value over the concerned central and state authorities, such as the Labour Departments, and they are required to take necessary action for implementation of such orders and directions.

Recently, the Hon’ble Supreme Court, while considering the various circulars Issued by MHA (including the circular dated 29.03.2020), observed that:

"We trust and expect that all concerned viz., State Governments, Public Authorities and Citizens of this country will faithfully comply with the directives, advisories and orders issued by the Union of India in letter and spirit in the interest of public safety".

In the same judgment, the Supreme Court also said that an advisory which is in the nature of an order made by the public authority attracts section 188 of the Indian Penal Code. Section 188 of the IPC attracts a punishment of imprisonment of up to 6 months, or with fine which may extend to one thousand rupees, or with both.

  • Can the wages of employees be reduced?

The Government of India has directed all the employers to pay complete wages to their workers on the due date without any deductions, until the nationwide lockdown remains in effect.

  • Should companies provide pay to their employees if they are unable to attend office due to the lockdown?

The Government of India has directed all the employers to pay complete wages to their workers on the due date without any deduction, until the nationwide lockdown remains in effect. After the lockdown if lifted, if an employee is on leave in excess of the leave available to him as per his/ her employment agreement, the employer may deduct wages in accordance with the employment agreement.

  • What are the remedies of an employee who is terminated?

If an employee falls under the category of a ‘workman’, under the Industrial Dispute Act, 1947, termination of such workmen shall be deemed to be an industrial dispute which can be settled by way of conciliation or by adjudication and in case the matter is settled by conciliation, the dispute comes to an end. In the event that the dispute is not settled, the dispute is referred to adjudication.

For an employee who is a not a workman, their conditions of service are governed by their letter of appointment/ employment contract, the Indian Contract Act, 1872, State-Specific Shops and Establishment Legislations and the orders which have been issued by central and state governments during the lockdown. Such employees may approach the civil court seeking payment of any unpaid dues and/or damages for wrongful termination, if the termination was against the terms agreed by the employer or against the orders which have been issued by central and state governments during the lockdown.

  • Can the employer avoid payment of bonus to employees for the current year?

The Payment of Bonus Act, 1965 regulates the payment of bonus of employees whose monthly wage is less than Rs. 21,000/-. The Payment of Bonus Act, 1965 is applicable to establishments and factories that employ or have employed, on any day during an accounting year, 20 or more employees.

All the eligible employees under the Payment of Bonus Act, 1965 are entitled to receive a statutory bonus ranging from 8.33% to 20% of the wage. As per the statutory requirements, bonus is to be paid to eligible employees within a period of 8 months from the close of the accounting year.

  • Are employers allowed to suspend employees temporarily on zero pay or reduced pay?

If there is no clear contractual right in the employment agreement which entitle an employer to temporarily suspend employees without pay or with lesser pay, then there is no clear route to employee suspension. Imposing such suspension without agreement may give rise to claims against the employer by employees who are wrongfully suspended.

It is essential to adhere to the employment agreement with employees in order to deal with the current circumstances for mitigating the risk of legal claims.

  • Can an employer restrict employees from traveling to affected areas?

Employers do not have legal right to restrict an employee from travelling for his/ her personal reasons. However, if an employee travels to an affected area and wants to return to work after such travel, the employer may ask such employee to self-quarantine and not come to work for 14 days until they test negative for COVID-19 infection. The employer may also demand medical documentation certifying negative test results before allowing the employee to re-enter the workplace.

  • For organisation which are continuing to function under the lockdown, can an employer ensure safety of employees who are coming to work?

For organisations that are continuing their operations, being involved in manufacture or provision of essential goods and services, employers can take the daily temperature of employees who are coming to work while considering that: a. Employee’s prior consent has been undertaken, b. Test temperature with contact-less thermometers, if available, c. The individual conducting the tests should be adequately masked and sanitised, and d. Maintain the confidentiality of the tests results for privacy.

If an employee tests positive or shows COVID-19 symptoms, or does not provide consent to be tested, the employer may bar the employee from working since the employer has the statutory obligation to provide a safe workplace for its employees. 

 

Acts such as termination, lay-off, suspension or reduction of wages of most employees will amount to a breach of contractual obligations, and hence, legal advice must be procured before undertaking any such acts to mitigate the risk of claims from employees. Accordingly, each case has to be evaluated based on the facts of each case.

 

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