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Supreme Court Refused To Agree With MHA’s Directive to MSMEs for Giving Full Wages to Employees

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While looking at practicalities of the current situation, the Supreme Court (SC) refused to intervene and stay the order of the Ministry of Home Affairs’ (MHA) order directing Micro Small and Medium Enterprises (MSMEs) to pay full wages. On the backdrop of COVID-19 type crisis which has impacted everyone, this decision of Supreme Court seems to have taken a realistic one.

Reportedly, the apex court was hearing a plea by Mumbai-based Twin City Industrial Employers Association which had sought a stay MHA order.

The petitioners had argued that amid lockdown when businesses have been halted following which there is zero revenue, how it is possible to pay full wages to workers.

A bench of the apex court headed by Justice Ramana was unmoved by the petitions. Refusing to intervene, he observed that despite threats of action being issued, no one had been prosecuted under the MHA order or under the Disaster Management Act.

The MHA passed on March 29 passed an order directing full payment of wages, during the course of the lockdown to workers employed by private enterprises without exception. MHA in its order had also warned that legal action would be taken for non-payment of wages under the Disaster Management Act.

Earlier, Ludhiana based Hand Tools Manufacturers Association, comprising of 41 MSMEs, had too knocked the Supreme Court’s door challenging the validity of the centre’s order directing all employers to pay full wages to workers without any deduction during the lockdown period.

However, the court turned down their plea and had issued notice to the union government to file a reply on the same.

A group of Micro Small and Medium Enterprises (MSMEs) from Haryana had also filed a plea in the apex court seeking direction to Centre to subsidise the wages of workers to the tune of 70 per cent for the lockdown period by utilising the funds collected by the Employees’ State Insurance Corporation (ESIC) or the PM-CARES Fund or through any other government fund.

“The government should be directed to subsidise the wages of the workers to the tune of 70 per cent for lockdown period by utilising the funds collected by the Employees’ State Insurance Corporation (ESIC) or the PM Cares Fund or through any other government fund/scheme,” the petition said.

SMEStreet Desk

SMEStreet is fast growing platform dedicated to entrepreneurs from small and medium sized businesses (SMEs). Committed to facilitate Knowledge & Networking for Business Growth, SMEStreet offers value added content which shows the actual voice of Indian MSMEs.

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