On March 23, 2020, the Union Ministry of Labour and Employment advised all employers of public and private establishments not to terminate their employees, particularly casual or contractual workers, or reduce their wages. So far, so good.
The next day, the National Disaster Management Authority (NDMA) under Section 6(2)(i) of the Disaster Management Act, 2005 (DMA) directed ministries/departments of the government of India, states and Union Territories to take effective measures to prevent the spread of Covid-19 in India. The same day, the home secretary under Section 10(2)(I) of the said Act said that certain guidelines had been issued. This order was effective for 21 days from March 25.
The guidelines direct closure of commercial, private and industrial establishments, transport and hospitality services, educational institutions, etc., subject to exceptions therein. It is clear that these are “containment measures” and violation of them would be punishable under Sections 51 to 60 of the said Act, besides Section 188 of the Indian Penal Code (IPC).
This order of March 24 was followed by two more orders on March 25 and March 27. A third addendum order was issued by the home secretary on March 29 in the backdrop of the widespread movement of migrant workers. The order, issued under Section10(2)(I) of the said Act, directed: “All the employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their work places, on the due date, without any deduction, for the period their establishments are under closure during the lockdown….”
It is this direction that has caused consternation among a large number of employers despite their best intentions to support their employees during the crisis. Businesses across most segments have faced disruptions due to the Covid-19 outbreak. And many industries and employers, especially in the small and medium size sectors, work with a high proportion of fixed operating expenses. This makes their businesses high-risk in case of revenue fluctuations. So is this direction to compulsorily pay wages to workers, without any deduction, for the entire period of the lockdown feasible for such an employer?
The concerns here are two-fold. First, is this direction justifiable in law? And, second, what are the consequences of non-compliance?
In the first case, prima facie, the direction appears unreasonable, arbitrary, vague and disproportionate. The third addendum order, which was purportedly issued in the backdrop of the mass movement of migrants, directs all employers to pay wages to all workers on their roll. It is not clear whether the direction only applies to employers of migrant workers or is a blanket direction to all employers. It, therefore, is vague and unreasonable. The said direction also does not take into consideration the financial capacity of the employer to bear the burden. The capacity of the employer to pay depends upon the capacity to maintain consistent production, which hasn’t been possible during the lockdown. Therefore, this direction lacks “reasonableness”.
Thirdly, it is arbitrary as it postulates situations where the law treats unequals equally. The direction seems to apply to all employers, irrespective of whether they are engaged in “essential services” and thus generating revenue, or whether their operations are completely closed. Even an establishment that comes under “essential services” has two sets of employees technical employees whose services are used and clerical whose services are not being used. The law mandates equal treatment of both classes. Most importantly, this direction treats employers of SMEs/MSMEs (who may not have the working capital to pay full wages during the lockdown) and those in large-scale industries (who
may be able to comply with this direction), alike.
The direction was issued under Section 10(2)(l) of the DMA which states that the National Executive Committee (NEC) may lay down guidelines for, or give directions to concerned ministries/departments of the government and states regarding measures to be taken by them in response to any threatening disaster situation or disaster. It is worth considering whether the said provision empowers the NEC to give directions to a private employer and whether the burden of “mitigation” or “economic
rehabilitation or reconstruction”, which is a part of disaster management, can be imposed on employers, and if so, to what extent.
What happens if it is impossible for an employer to comply with the direction of payment of wages during the lockdown? Would the maxim lex non cogit ad impossibilia (the law does not compel the doing of impossibilities) be applicable in this case? It is clear that violation of this direction to pay would be punishable under Section 51-60 of DMA and Section 188 of the IPC.
The Supreme Court in Supdt. of Taxes v. Onkarmal Nathmal Trust (1976) held:
“62. The law in its most positive and peremptory injunctions, is understood to disclaim, as it does in its general aphorisms, all intention of compelling performance of that which is impossible.
“… where the law creates a duty or charge, and the party is disabled to, perform it, without any default in him, and has no remedy over, there the law will in general excuse him: and though impossibility of performance is in general no excuse for not performing an obligation which a party has expressly undertaken by contract, yet when the obligation is one implied by law, impossibility of performance is a good excuse….The same principle has been stated in Craies on Statute Law.
“Under certain circumstances, compliance with the provisions of statutes which prescribe how something is to be done will be excused. Thus, in accordance with the maxim of law, lex non cogit ad impossibilia, if it appears that the performance of the formalities prescribed by a statute has been rendered impossible by circumstances over which the persons interested had no control, like the act of God or the King’s enemies, these circumstances will be taken as a valid excuse.”
The Court also held in Krishnaswamy S. Pd. v. Union of India (2006): “16. The maxim actus curiae neminem gravabit i.e. an act of court shall prejudice no man is an important one. The maxim ‘is founded upon justice and good sense, and affords a safe and certain guide for the administration of the law’, said Cresswell, J. in Freeman v. Tranah. An unintentional mistake of the court which may prejudice the cause of any party must and alone could be rectified.
“17. The maxim of equity, namely, actus curiae neminem gravabit—an act of court shall prejudice no man, is founded upon justice and good sense which serves a safe and certain guide for the administration of law. The other relevant maxim is, lex non cogit ad impossibilia—the law does not compel a man to do what he cannot possibly perform. The law itself and its administration is understood to disclaim as it does in its general aphorisms, all intentions of compelling impossibilities, and the administration of law must adopt that general exception in the consideration of particular cases.”
It would be interesting to see whether courts, in appropriate cases, apply the aforesaid principles of actus curiae neminem gravabit and lex non cogit ad impossibilia in order to grant relief to an employer who, despite his best intentions and efforts, is unable pay wages to his workers on the due date during the lockdown.
It is indisputable that tough times call for tough measures. The challenges posed by Covid-19 are of an unprecedented nature, and are being met by both the State and the citizenry to the greatest possible extent.
The writer is an Advocate-on-Record in the Supreme Court