Workers Losing Battle To Claim Lockdown Wages

06 May 2020 7 min read  Share

The Prime Minister asks India Inc “to be kind”, not fire employees. His government orders companies to pay workers during the lockdown. Companies say they cannot or will not obey. Even State-run firms are cutting wages. The battle has reached the Supreme Court. Meanwhile, workers struggle to buy food

A representative image of an Indian garment factory/FABRICS FOR FREEDOM, WIKIMEDIA COMMONS

Updated: May 11, 2020

Bengaluru: Mysore-based Hazira, 26 (who goes by one name), has been a packer at garment exporter Carnival Clothing Companya subsidiary of a company that supplies many global brandsfor four years. The garment industry in Karnataka employed about half a million before the Covid-19 pandemic, the majority of them women.

A soft-spoken woman, Hazira and her team of 100 (among about 1,500 at the factory) fold and wrap over 3,000 pieces of clothing every day at the factory. Her daily wage of Rs 346 supports her mother and school-going brother and pays the rent and other living expenses.

She usually gets her salary by the 5th or 6th of the month, but like thousands of workers nationwide, she is not sure if she will get paid for April, the month she spent at home during India’s 53-day lockdown, which was partially lifted on 3 May 2020.

Rukmani V P, president of the Garment Labour Union in Karnataka said they would wait till 10 May 2020 to see how companies respond. She said they would not hesitate to appeal to the international brands for whom they indirectly work and who make “so much profit each year”.

“Many of the workers are single-earning members of the family. In some families, the husbands are casual workers (auto drivers, painters, construction workers) who haven’t been working either,” said Rukmani. “So they are dependent on this salary.”

Among Hazira’s colleagues, the chatter is not encouraging. “They are saying this is not a government job,” she said. “It’s a private company so there is no guarantee of payment.”

Managers are not answering their phones and one of the colleagues got in touch with a human resources representative, who asked him how they would pay him when he had not come to work.

When asked if the company will be able to meet its obligations to its employees, Dominic Jorge, the vice-president of human resources at Gokaldas Exports, the parent company of Carnival Clothing Company, said that they were "working on it" and declined any further information. Gokaldas Exports is a four-decade old company with more 25,000 employees, $200 million in annual turnover and clients like Walmart, GAP, Banana Republic, Puma, Zara and more, according to its website.

Despite a series of government orders—vague and difficult to implement without state support, companies contend—asking employers to pay workers during the lockdown, many companies will not or cannot obey, citing as they do adverse business conditions. Even government companies are cutting wages and freezing allowances.

Distressed companies have piles of unsold inventory, others are affected by the shutdown of local and global markets and unpaid bills, and a few have launched legal challenges against these orders. They want the government to subsidise up to 70% of wages during the lockdown, using either emergency funds or government-held provident-funds or employee savings, a move that trade unions oppose.

While the details are argued in court between the government, trade unions and companies, millions of workers are in danger of slipping into deeper poverty with the sudden disappearance of wages.

An Arbitrary Order The Centre issued an advisory on 20 March requiring private and public enterprises to retain employees, particularly casual and contract workers, and continue to pay full wages. An order from the Ministry of Home Affairs, passed under the Disaster Management Act, 2005, on 29 March, among other things, mandated employers to make payment of wages for the period of the lockdown. Several states have also issued orders and advisories (here, here and here) to this effect too.

A month has passed since then, a month of factories and shops being shut, restaurants and cinema halls shuttered and those who cannot work from home, as news of retrenchments and salary deductions keep pouring in from across the country. The Centre has made no comment, save a request from the Prime Minister, during a television address, asking employers “to be kind” and not fire anyone.

The government has addressed a few high-profile cases and some unions have been working with retrenched employees, but there are just too many people who are looking for help, said Surya Prakash, National Counsel, All India Central Council of Trade Unions (AICCTU).

Prakash referred to a recent case where the AICCTU helped 50 employees of a company listed on the Bombay Stock Exchange get their jobs back by talking to the district magistrate, labour authorities and the police. “As per the Home Ministry notifications, they [local officials] have been given the power to enforce the rules,” he said. “Due to this pressure, the company revoked the firings.”

But some in the private sector are ready to take the fight to the courts.

At least three petitions have been filed in the Supreme Court by companies and associations from various states challenging the constitutional validity of these orders, demanding the freedom to fire or furlough employees and government wage subsidies.

Jeetender Gupta is the lawyer representing one of the petitioners, Karnataka-based Ficus Pax, a packaging manufacturer with 11 factories in various states, employing 176 permanent workers and 939 contract workers. The petition argues that with monthly business down to 5-6% of normal, the company won’t be able to bear the burden of paying wages during the lockdown.

According to the petition, the notifications violate Article 14, Article 9(1)(g) and Article 39 of the Constitution of India, being contrary to the principle of “Equal Work Equal Pay” and also “No Work No Pay”.

Gupta said they were not against workers getting paid but “the entire social responsibility cannot be passed onto employers who are running financial establishments, after all, and will be pushed into bankruptcy”. The government has not even allowed corporations to pay wages using their Corporate Social Responsibility funds because paying wages for no work becomes a social responsibility and not a statutory one, he said.

On 27 April, the Supreme Court granted the government two weeks’ time to put its policy on record regarding these notifications.

In Karnataka, within three days of the state’s labour minister issuing a circular asking the private sector to refrain from cutting wages or laying off employees, the Karnataka Employers’ Association asked for a relaxation of these rules. The government withdrew that order. Labour secretary Capt. P Manivannan told Article14 that it was not a separate order but a Kannada version of the same 29 March order from the MHA; they withdrew it “so as to not cause confusion”.

A labour department task force to monitor the implementation of the Centre’s orders has not met even once, according to Clifton Rosario, a AICCTU lawyer from Bengaluru. Manivannan said a meeting was “imminent”.

“Meanwhile, this order is being challenged in the Supreme Court,” said Manivannan, “So we are awaiting the final order. There is no interim stay but the state doesn’t have the power to prosecute companies under the Disaster Management Act. This requires permission from the Centre and we have moved files asking for this.”

The other option is prosecuting companies under the Industrial Disputes Act, 1947, a civil case which is likely to be adjudicated over several months, said Manivannan. “I must honestly say that there is no immediate relief for workers who didn’t get their salary.”

In other words, the government cannot help.

No Work, No Pay: A Cruel Diktat In Coimbatore, an industrial hub in Tamil Nadu, companies are clear on their stance of ‘no work, no pay’. Even in March, many didn’t get paid for the lockdown period or they were paid on the condition that the employee would compensate for it at a later date, according to D Senthil Kumar, 47, a factory floor worker in Aqua group, a large motor manufacturing company in Coimbatore, Tamil Nadu. He has been working on the factory floor for 27 years and that long relationship with his company is being put to test.

According to S Krishnamurthy, the district secretary of the Centre of Trade Unions in Coimbatore, states have not made any move to implement the Centre’s orders. Industry bodies have declared that they will not be able to pay April salaries, even as they ask the state government for relief, including reduced wages and extended shifts. They argued the Centre has no right to impose financial obligations of the private sector under the Disaster Management Act, a contention that union lawyers are trying to disprove.

Meanwhile, Tamil Nadu’s labour minister Nilofer Khafeel, PhD, insisted that the chief minister has been “consistently sending the message” that companies must pay their employees or face action. What kind of action, she could not say. “I haven’t got any complaints that factories are not paying wages,” Khafeel told Article14. “Unless it is brought to our knowledge, we won’t be able to take any action or compel the companies to pay.”

Workers generally do not complain against employers for fear of jeopardising their jobs, so it is the government that should have some kind of monitoring system, said factory worker Senthil Kumar.

The state itself is no model employer, with government workers subjected to wage cuts and a freeze in dearness allowances. In some cases, even the courts cannot intervene. In East Bengaluru on 3 May, migrant workers building the city’s metro protested that the government-run company employing them had not paid wages.

Gupta argued that if other countries have subsidised wages for their weakest sections, India could too. He pointed to the Employees State Insurance (ESI), which assures 70% of salaries for three months if ill or disabled to those earning under Rs 21,000. The ESI’s unutilised corpus of Rs 60,000 crore can be used, for starters, he said. Those not covered by ESI can be paid through other funds, such as PM-CARES, in which no one knows how much has been accrued, and how it will be spent.

Trade unions oppose dipping into the Employee Provident Fund (EPF) or ESI to subsidise the wages, extending working hours or anything else that would add to the worker’s burden.

“When they were making profits, they weren’t sharing it with the workers,” said Rosario. “Now they can’t force this loss onto the workers.”

The choice was clear, he said. It was between protecting the profits of employers or standing with workers bearing the brunt of the pandemic. “I don’t think there are any employers calling the helpline for rations,” said Rosario “It’s the workers. That’s how precarious their livelihoods are.”

Hazira’s life currently reflects that precariousness. She gets rations from the Public Distribution System (a social security system through which the government gives subsidised grains, pulses and fuel to the poor) but what would she do with just rice and dal, she asked. She walks by markets that are open from 8 am to noon, but she does not have the money to buy vegetables. Her mother is diabetic, and she is not sure how she is going to manage her treatment and medicines in the coming days.

Hazira’s April’s salary will make the difference between destitution and the ability to fight another day.

(Ayswarya Murthy is an independent journalist based in Bangalore. She writes on politics, policy and everything in between.)