With businesses forced to stay away from work for more than a month due to COVID-19 pandemic, the Centre has now withdrawn its order directing employers to pay wages to workers, even with units remaining shut during lockdown.
On Sunday, the Ministry of Home Affairs (MHA) had issued a fresh set of guidelines which will be applicable from Monday. It has repealed the order dated March 29, 2020 which had talked about compulsory wage payment to workers during lockdown. “Save as otherwise provided in the guidelines annexed to this order, all orders issued by the NEC [national executive committee] under Section 10(2)(I) of the Disaster Management (DM) Act, 2005, shall cease to have effect from 18.05.2020.”
Following the March 29 directive, some employers had challenged the constitutionality of the order in the apex court. Last week, the Supreme Court had asked the government not to take any coercive measure action against companies who are not paying wages during lockdown as per the home ministry order.
Ever since the imposition of the lockdown, industries and their federations have been demanding wage stimulus from the government. During a meeting with the labour secretary earlier this month, FICCI had requested for a 50 per cent wage subsidy.
However, the Rs 20 lakh crore stimulus package announced by the Centre last week has not provided any wage subsidy and hence, the removal of the March 29 order will prove to be a relief for business owners.