Trade and industry associations in India likely to seek subsidy

Trade and industry associations are likely to represent the authorities in central and state governments over the issue of wages to workmen for the lock down period due to the COVID-19 epidemic.

Jeetender Gupta, Advocate-On-Record, Supreme Court has recommended that industry should represent the government without linking it with any other benefits and concessions that they expect from the government.

Some of the suggestions given by Gupta include a wage subsidy of 75 per cent of wages for all workers by the Government of India, especially for the MSME Sector. The government may cap the subsidy benefit to applicable minimum wages.

He also suggested the extension of Employees’ Provident Fund (EPF) contribution benefit should be extended to all establishments irrespective of the number of employees. The government may cap the benefit to that of applicable minimum wages.

It is also suggested that liberty be granted to employers to reduce salary for those employees, which are not covered under definition of workman or worker under the Industrial Dispute Act or whose salary exceeds minimum wages. The government may fix the subsistence allowance for all categories of employees to applicable minimum wages for the lockdown period and/or may permit layoff in accordance with law.

The government relief should include immediate financial assistance with reduced rate of interest, no collateral and an interest-free moratorium period to take care of employer liability towards wages and salaries.

Gupta said these measures can result in a level playing field for all stakeholders - government, workers, employees and employers while minimizing future litigation.

On the scope of “workers” for the purpose of payment of wages as mandated under the lockdown by the Home Ministry, Gupta concludes that based on various advisories and orders issued by Central Government/State Governments, the scope of payment of wages shall extend to regular, casual & contractual workers.

“Workman” as defined under the Industrial Disputes Act 1947 will broadly include any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, but excludes those employed mainly in a managerial or administrative capacity.

Also excludes those employed in a supervisory capacity drawing wages exceeding Rs 10,000 a month (Ten thousand Rupees) per month. The limit of Rs 10,000 pertains only to those employed in supervisory capacity.

The term “Worker” or “Workman” does not find any mention in Payment of Wages Act 1936. Gupta says that therefore, any person who has been employed mainly in administrative, managerial or supervisory capacity and earning more than Rs 24,000/- per month would neither be regarded as a worker under Industrial Disputes Act 1947 nor will qualify for wages under Payment of Wages Act, 1936.

Indo-Asian News Service