Ficus Pax Private Ltd. V. Union of India

AIR 2020 SC 586
HON’BLE JUDGE(S): ASHOK BHUSHAN, SANJAY KISHAN KAUL, M. R. SHAH
WRIT PETITION NO. 10983/2020
DECIDED ON 12/06/2020

Facts

‘Ficus Pax Private Limited’ is a company incorporated under the Companies Act based in Karnataka, which is involved in the packaging business and is registered as Medium Industry (Manufacturing) under the Micro Small Micro Enterprises Development Act 2006 (MSMED Act 2006). The petitioner employed hundreds of permanent and contract workers before the lockdown period and paid wages to all workers including contractual workers for the month of March 2020.

Issues

The company moved to the Supreme Court under the writ petition challenging the constitutional validity of the order dated 29.03.2020 (withdrawn w.ef. 18.05.2020) by the Secretary (Labour & Employment) and Clause III of the D.O. dated 20.03.2020 issued by Government of India, Ministry of Home Affairs. The government invoked Section 10(2)(l) of the Disaster Management Act to impose an obligation of full payment of wages to workers and employees during the lockdown period.

The company, represented by Advocate on Record, Jeetender Gupta submitted that these two notifications were contrary to the provisions of law including Article 14 and Article 19(1)(g) of the Constitution of India.

The notifications are also contrary to the principle of Equal Work Equal pay and also No Work No Pay since there is no differentiation being made between those workers who are being permitted to work during the lockdown period and those who are not. The plea throws light on how the liability of compensation towards workers, is of the Government, and cannot be shifted to private sector employers.

The Central Government has the power to put together funds for reasons including relief and emergency response under the Disaster Management Act 2005. The government can also utilize the funds collected by Employees State Insurance Corporation (ESIC) or the PM Cares fund to provide monetary relief to workers.

The lockdown measures were enforced by the Government of India under the Disaster Management Act, 2005 under which various industries and establishments were not allowed to function to their full capacity, or at all during the said period. The order dated 29.03.2020 was imposed as a statutory obligation for only 50 days, and after its withdrawal, disputes regarding payment of wages above 50 days came about.
It must be noted that both industry and laborers need each other in this economy, and the aim here is to strike a balance between both.

Judgement

Keeping this in mind the Supreme Court issued interim measures facilitated by the respective State Authorities and availed by all private establishments.

1. The private establishment (irrespective of whether they were functioning to their partial or full capacity) may initiate negotiation regarding the payment of wages for 50 days. If this doesn’t work, they can approach the concerned labour authorities to settle the dispute. The settlement will be acted upon irrespective of the 29th March order.
2. Private establishments, factories, and industries can permit those employers to work, who are willing to work. Publication and communication of the steps taken to encourage their participation must be done.

Both Supreme Court orders dated 04.06.2020 and 12.06.2020 are in held in Rem as they are directed towards all employers and not specific towards certain employers only.
The impact of this order will be heavy on industries and workers, as we already know that they are weakened due to the lockdown