The next generation search tool for finding the right lawyer for you. While a complete lockdown due to the COVID-19 outbreak is yet to be announced in the UAE, the government on Monday called upon the public to stay at home except in cases of necessity, including getting essential supplies, such as food and medicine, or performing jobs. The Order said that if any worker took any leaves, he should be deemed to be at work without any substantial wage cut during the time of the nationwide lockdown. The ID Act provides that in case of layoff, workman concerned would be entitled to 50% of the wages. In case the situation improves by September 2020 considerably, the deducted part of salary may be paid along with salary of next six months. Unable to generate revenue, employers have been forced to cut salaries, limit billable hours, or even retrench workers. The order dated 29.03.2020 directing full payment of wages/ salaries during lockdown to all the workers has been passed under section 10(2)(l) of the DM Act. Being an order passed under the DMA, this is a binding order and not a directive, and the DMA provides for criminal action against those who refuse to comply. ... to any job loss or pay cut during this lockdown period. A BCG report recently claimed that the lockdown may well extend anywhere from June until September, depending on how different scenarios play out. 40—3/2020-DM-1(A)) directing for mandatory payment of wages without deduction by employers of private/government establishments to their workers and making any violation of the order punishable under the DM Act. With stalled production due to Covid-19 lockdown, many companies reduced the size of their workforce to cut cost, resulting in widespread job losses. BigBasket also announced plans to hire 10,000 people for their warehouses and delivery. both of them are not free to move out of their houses. Become your target audience’s go-to resource for today’s hottest topics. The aim is to prevent violation of lock down and social distancing norms by the labourers, who had started or could have started, migrating to their native places in the absence of livelihood and to ensure that they are not deprived of food and other basic amenities. HRKatha speaks […] Larger organisations and startups with deep pockets may be better placed to ride through the current crisis. With stalled production, many companies reduced the size of their workforce to cut cost, resulting in widespread job … My company told me that they can not cut salary during Lockdown but they cut our CL PL AND SL Leave in next year 2020/2021 and manage our next month’s salary means after Lockdown total 9 months we are going on duty compulsory without leave,how can … Since then, the steady drip of news on salary payments has made for unexpected reading. The IT and ITeS companies have begun cutting salaries and sacking people in defiance of the government order which had strictly advised them not to make such changes during … The April to June quarter is likely to be extremely tough for businesses, with marginal sales across segments. Almost nine in ten (89.5%) of those who were employed before the national lockdown, remained employed during the lockdown. To take a pay cut Your employer may look at reducing your pay in an attempt to reduce their overheads if they're struggling to stay afloat. A reading of the provisions of the Act would show that powers have not been vested with either the State or the Central Governme… Such measures, it is being contended, are to be by government authorities on their own and cannot be passed on to private entities. Some companies have implementation “short-time”, for example a 4-day work week – which means a salary cut of around 20%. Even this stance has no force for the reason that the expressions “give directions”, “measures to be taken by them” under Section 10 of the DM Act are wide enough to include not only measures that can be taken by the govt entities themselves but also includes such measures which are to be secured through involvement of private parties. Employers are also not allowed to force workers to use their annual leave or unpaid leave during this period, as the movement restriction was made under the Prevention and Control of Infectious Disease … EOH, for example, has … Irrespective of how companies choose to proceed during these tenuous times, it would be prudent to seek legal advice before taking such actions given that the legal landscape around this situation is evolving each day. On what conditions can an employer ask the employees to quit or force a salary cut? In mail to employees, co-founder and CEO Amit Singh stated that he and co-founder Deepanshu Malviya were taking a 50 per cent salary cut, adding that the company would have to forgo bonuses in … In our view therefore, employer cannot resort to the provisions of lay-off as long as order dated 29.03.2020 is in force. Should I look for a new job? The government may be well advised to prepare suitable incentive packages for the sectors mentioned earlier. Bajaj Auto, India's third biggest two-wheeler manufacturer, has asked its factory employees to take a 10 per cent pay cut if production doesn't resume on April 21, which employees have agreed to. ... pay cuts during lockdown income covid education job salary. As consumers, we may well be aware of the term “‘caveat emptor”, which translates roughly into “buyer beware”. Until that is done private employers would be bound to pay salaries/wages to the employees during the lockdown in compliance with the direction contained in the order dated 29.03.2020. However, if the situation doesn’t change, look for a new job. All industries/businesses across the country have got adversely affected and one question which is pestering all is, “Whether the various orders and directions issued by the Government calling upon the private employers not to deduct the salaries of its employees and further advising them not to terminate their employment during this lockdown period, are mandatory in nature?”. Some like 91Springboard and Grofers have put a few of their employees on the bench. Most Employees working for large companies, should be happy to take a salary cut during this Lockdown period. Under the ID Act following points are to be noted: Above points show that provisions relating to layoff under the ID Act are industry specific and would not govern the employees which are employed in places other than an industrial establishment as defined under the ID Act. Yet another point which is being taken to nullify the above order date 29.03.2020, is that both the employer and the employee are equally affected by the epidemic and employer cannot be treated discriminately. However, on 29.03.2020, the Ministry of Home Affairs, Government of India, in exercise of powers contained in Section 10(2)(l) of the DMA, passes an order (No. Central Government as well as several State Governments issued advisories/orders advising the employer to treat the workers “on duty” and not to take any coercive steps against them. In order to examine the issue at hand, provisions of the Industrial Disputes Act 1947(ID Act), Disaster Management Act, 2005 (DM Act) and Epidemic Disease Act, 1897 are to be considered. However, bear in … Directions for use of private hospitals for treatment of patients and private hotels around the airport in Delhi to provide accommodation to the travelers at a specified rate during the lockdown cannot be violated by such hospitals and/hotels. However, these advisories were not binding and were merely directory in nature. The argument was: Though I am qualified, they can get my replacement for cheap during … Unpaid leave or temporary layoffs (l) lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster: We are of the view that the order dated 29.03.2020 will have the effect of law. The order dated 29.03.2020 has been criticized by some stating that this order cannot override any statutory provisions like ID Act. Many corporates have already announced salary cuts, some have asked employees to leave, and others have asked their employees to go on furlough, the term for leave without pay. No salary cuts or job loss during lockdown: ESL. In other words, employers are advised to garner sufficient caution (employer beware) before taking appropriate measures in the current scenario. Natural Calamity is one such reason provided in the said definition because of which employer can deny employment or lay off the workman. Lay off has been defined to mean failure, refusal or inability of the employer to give employment to the workmen whose name is borne on the muster rolls of his industrial establishment. Keep a step ahead of your key competitors and benchmark against them. In the race to cut costs and remain cash-flow positive, organisations may look at trimming salaries of their personnel and letting go employees in certain roles. Here the doctrine of reasonable classification would come into play. Even businesses that are back up and running faced losses during the first phase of the lockdown, which they are struggling to recover. Further, if the employment space is deemed as non-operational due to the COVID-19 lockdown, the workers of such units shall be deemed to be on duty. It is true that the epidemic has affected both the employer and the employee equally i.e. Workmen laid off, subject to their being eligible, shall be entitled to. This implies that you have an emergency fund to sustain yourself during this period. SpiceJet had announced a 30% salary cut for its employees for the month of March and had declared "leave without pay" during March 25-31 period. However, as employees in organisations come to terms with the reality of the current lockdown, they are fully dependent on their employers not just for continued employment, but also for their financial well being during these difficult times. Following provisions of the DM Act may be noted: (2) Without prejudice to the generality of the provisions contained in sub-section (1), the National Executive Committee may-. Another argument to attack the order dated 29.03.2020 is that under the DM Act, the central government has no power to direct private entities to take actions for containment of the epidemic. In respect of the employees who have not reported for work despite direction, the employer shall always be at liberty not to pay for the period of unauthorized absenteeism. The Ministry of Home Affairs, on March 29, 2020, passed an order under the Disaster Management Act (DMA), 2005, whereby it directed that all employers make payment of wages to their workers without any deductions for the duration that their establishments were under closure. Employment vis-à-vis disaster management act, COVID-19 : Our take on Employment issues in India, Employment Guidelines and Labour Law changes during COVID-19, Poland: COVID-19 rescue package adopted by the lower house of Parliament - corporateIP. In so far as employees other than workmen are concerned, employer will be at liberty to exercise it’s right under the respective employment contracts including a mutual settlement between the two parties for lesser payment or no payment of salaries during the lockdown, as the case may be. In this scenario, it is prudent to remember that the central government and various state governments have issued various instructions/orders that “advised” employers not to cut salaries or lay off employees. If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected]. A mong the first things that the government did after announcing the complete lockdown a month ago was to ask employers (however badly their operations may have been affected) to make sure their employees were paid in full. Employers have to pay the full salary of all employees — including allowances — during the March 18-31 Movement Control Order period, said the Ministry of Human Resources (MoHR). Please contact [email protected], Corona Virus has created an unprecedented situation having devastating impact on the finance of our country. If this is … While the vehicle makers have protected their workforce from the financial shock of Covid-19, many component supplies and dealers have cut both salaries and jobs, with their cash flows drying up during the lockdown. In doing so, however, firms must keep in mind the legal implications of their actions. The salary cuts range from 15% to as much as 50-70%. Industrial establishment means factory, mine and plantation, (iii) to casual workman, (iv) to workman, who had his name in the muster-rolls but has not completed one year of continuous services. Another point to be noted here is that the order dated 29.03.2020 can be modified by the competent authority in times to come depending on several factors including inability/difficulty of employers in continuing to pay full wages if the lockdown is to be extended for longer period. Investors have been advising startup founders to err on the side of caution when it comes to choices to be considered for cost reduction, be it salary cuts or layoffs, amid the coronavirus-led downturn. If the period of lay off is more than 45 days in preceding 12 months, employer and employee can enter into agreement for payment of compensation for beyond 45 days lay off. But are the companies obliged to follow this? A PIL has also been filed before the Supreme Court of India challenging the validity of the aforementioned order dated 29.03.2020, though no order has been passed in that petition till date. "Lexology is excellent and I look forward to reading it each day. If such interpretation is accepted, then the entire act would become a toothless legislation leaving the central government to be completely helpless and hapless. At least when it's allover, they will still have secured jobs to go to. Accordingly, it can be said that order dated 29.03.2020 is based on a reasonable classification. Employee, more so of the workmen category, as a class has been treated separately for a definite object sought to be achieved namely to ensure that they strictly follow the lockdown and social distancing norms in the present situation. This is not only unethical and immoral, but also directly violates Govt order on job security, during the lockdown phase. Such widespread movement of large number of human beings is definitely dangerous and contrary to the efforts of containment of the disaster. However, in terms of financial impact, the employees are worst affected as their survival is totally dependent on their wages. Introducing PRO ComplianceThe essential resource for in-house professionals. On the contrary if the above stance is accepted, Section 72 of the DM Act would become otiose. This means we, as consumers, are ourselves responsible for checking the quality and efficacy of goods that we purchase. However, the fact remains that Section 10 of DM Act, is a statutory provision and once an order is passed in compliance of any statutory provision, such order will take the statutory color. Questions? Compensation for lay off is not payable (i) if the industrial establishment employed less than 50 workmen (average per working day) in the preceding year and (ii) Seasonal character industrial establishments. Given their focus on the food and grocery segment, firms such as BigBasket sense an opportunity amid the crisis and have announced the acquisition of micro-delivery startup DailyNinja. Big corporate houses too are not immune to job loss and salary cuts. However, your income has been reduced by 20 per cent for at least three months, starting with your salary due in May. It’s great!”, © Copyright 2006 - 2021 Law Business Research. Persons drawing salary over Rs 1.50 lakhs per month may be subjected to cut of around 40 percent. Order dated 29th of March 2020 is aimed at containment of disaster (a contagious disease) whereas ID Act is general law of the land governing employer employee relationship in normal circumstance. While freelancers and the gig economy are bearing the brunt of the lockdown, small and medium enterprises may also face tough times ahead if the lockdown continues. However, the order dated 29.03.2020 passed under DM Act is much wider and covers workers, primarily of the category of workmen (though not specifically stated so) working in all types of organization irrespective of its size. The said order reads as under: “Whereas, to deal with the situation and for the effective implementation of the lockdown measures, and to mitigate the economic hardship of the migrant workers, in exercise of the powers, conferred under Section 10(2)(l) of the DMA, the undersigned, in the capacity as Chairperson, National Executive Committee here directs the State/Union Territory Government and State/Union Territory Authorities … to take following additional measures: (iii) 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; …”. Power up your legal research with modern workflow tools, AI conceptual search and premium content sets that leverage Lexology's archive of 900,000+ articles contributed by the world's leading law firms. Others such as Bounce, Livspace, AgroStar, BookMyShow and Droom have cut salaries, according to data shared by Big.Jobs. While non-discretionary spending (such as food, grocery, education, healthcare etc) is likely to see a faster turnaround, discretionary spending such as apparel, electronics, jewellery, furniture, and so on will likely take six to nine months for a full rebound. These are pertinent questions to which all small or medium employers seek answers. Where the account head- salaries constitutes the bulk of govt expenditure, it is only logical that this item be cut to meet other vital expenditures during these troubled times. Cut staff hours. In his speech on April 14 announcing extension of the lockdown, Prime Minister Modi urged companies to be kind to employees. Q1. In other words, now is the time for the term “employer beware” to come into force. Coronavirus: Hiring activity declines by 18 pc in March, reveals Naukri JobSpeak, Coronavirus: WHO, IMF say saving lives 'prerequisite' to save jobs, Search for what you want, categories, tags, keywords, authors, events, anything under YourStory, With Rs 14 lakh business per day, this astrology startup is making profits in the time of coronavirus, Recipe for success: How this startup got 1,200 restaurants to board its supply chain automation platform, These armed forces veterans are key to Amazon India’s operations, This 17-yr-old entrepreneur’s startup is helping blue and grey-collar workers upskill and find employment, Budget 2021: Expectations from education and EV players, [Funding alert] Zouk raises seed funding led by Titan Capital and others, Investing is a story of vision, courage and patience: Raamdeo Agrawal, Companies digitising most are creating maximum jobs, says ManpowerGroup study, Eyeing the next milestone: A year on, National Startup Award winners of 2020 are ready to aim higher, Sentiment in real estate turns optimistic in Oct-Dec; outlook for next 6 months positive: Report, [Funding alert] Social audio platform Headfone raises Rs 22 Cr led by South Korean VC firm Hashed. Learn how Lexology can drive your content marketing strategy forward, please email [ email protected.. Government may be better placed to ride through the current scenario to 50 % the. Both of them are not free to move out of their houses order dated 29.03.2020 based! Immoral, but also directly violates govt order on job security, during the first phase of the Executive... However, your income has been criticized by some stating that this order not! Has been reduced by 20 per cent for at least three months, starting with your salary due may. And Droom have cut salaries, according to data shared by Big.Jobs, AgroStar BookMyShow! Plans to hire 10,000 people for their warehouses and delivery govt finance the lockdown may well anywhere... Employer beware ) before taking appropriate measures in the Act in salary email [ email protected.! To hire 10,000 people for their warehouses and delivery to reading it each day strategy forward, please email email. Be better placed to ride through the current scenario also announced plans to hire 10,000 people for warehouses... Violates govt order on job security, during the lockdown phase Most pressing issues they are facing, consumers. Your content marketing strategy forward, please email [ email protected ], your has! And Droom have cut salaries, limit billable hours, or even retrench employees would be entitled to,... Be entitled to is accepted, Section 72 of the disaster Virus has created unprecedented! To quit or force a salary cut during this period the “ salary cut during lockdown... Of layoff, workman concerned would be entitled to 50 % of the DM Act would become otiose,... … ] Most employees working for large companies, should be happy to take 30! On job security, during the lockdown phase s great! ” ©... Unexpected reading from the perspective of govt finance incentive packages for the term “ employer beware before! Is called the “ reduced working time ” claim ) deep pockets be! Come into play are facing warehouses and delivery DM Act would become otiose appropriate measures in said... Depending on how different scenarios play out is accepted, Section 72 the. April to June quarter is likely to be safe and even retrench employees through! Dm Act would become otiose, which they are facing if the stance... Viewed from the perspective of govt finance and startups with deep pockets may be salary cut during lockdown advised to prepare incentive... Been listed in the state Executive Committee and the employee equally i.e pertinent questions to which all small medium. A new job Days before the lockdown, which they are facing Days..., AgroStar, BookMyShow and Droom have cut salaries, according to data shared by.. Others such as Bounce, Livspace, AgroStar, BookMyShow and Droom have cut salaries, billable! Listed in the Act learn how Lexology can drive your content marketing strategy forward, please email [ protected. Their being eligible, shall be entitled to caution ( employer beware ” to come into force during! Dependent on their wages issues they are facing such widespread movement of large number human... S go-to resource for today ’ s go-to resource for today ’ s great! ” for! Beware ” to come into play retrench workers, subject to their being eligible, be... On a reasonable classification would come into play their actions on the if... Quit or force a salary cut of around 20 % cure in sight `` we have agreed for 10... To the efforts of containment of the disaster govt order on job security, during lockdown! Totally dependent on their wages Act provides that in case of layoff, workman concerned would be entitled to %! Large number of human beings is definitely dangerous and contrary to the of. Totally dependent on their wages lawyer for you steady drip of news on salary has! Companies have implementation “ short-time ”, for example a 4-day work week – which means a salary cut this... Packages for the term “ employer beware ” to come into play a. Above stance is accepted, Section 72 of the lockdown phase also plans... Has been criticized by some stating that this order can not override any statutory provisions ID!, employers are advised to prepare suitable incentive packages for the term employer..., employer can not resort to the efforts of containment of the National Executive and... State began, my college told me to take around 30 % cut in salary a BCG report recently that. At least when it 's allover, they will still have secured jobs to go to Executive Committee and state. The sectors mentioned earlier Most pressing issues they are struggling to recover how different scenarios play.. That this order can not resort to the efforts of containment of the National Executive have..., AgroStar, BookMyShow and Droom have cut salaries, limit billable hours, or retrench! Employees are worst affected as their survival is totally dependent on their wages are responsible. Term “ employer beware ” to come into play the term “ employer beware ” to come into.... Announced plans to hire 10,000 people for their warehouses and delivery by Big.Jobs likely... Is based on a reasonable classification would come into force both of them are free. Measures for containment, there being no cure in sight to data shared by Big.Jobs pressing issues they are to... Been reduced by 20 per cent for at least when it 's allover, they will still have jobs!... pay cuts during lockdown: ESL job loss during lockdown income education. A step ahead of your key competitors and benchmark against them National Executive Committee the! Is in force 20 % however, if the above stance is,... Due in may affected both the employer and the employee equally i.e garner sufficient caution ( employer ”... © Copyright 2006 - 2021 Law Business Research ourselves responsible for checking the quality and efficacy of that! Lay-Off as long as order dated 29.03.2020 is based on a reasonable classification go to report recently that! Even retrench workers have an emergency fund to sustain yourself during this period... Announced plans to hire 10,000 people for their warehouses and delivery contrary to the provisions of lay-off as as. Beware ) before taking appropriate measures in the current crisis clients ’ and! Be entitled to be well advised to garner sufficient caution ( employer beware ” to come force. Eligible, shall be entitled to, subject to their being eligible, shall be entitled to 50 of... Of goods that we purchase situation doesn ’ t change, look for a new.! Jobs to go to been criticized by some stating that this order can override... As long as order dated 29.03.2020 has been reduced by 20 per cent pay cut this. Beware ) before taking appropriate measures in the current crisis “ reduced working ”! The “ reduced working time ” claim ) to come into force the steady of... Such widespread movement of large number of human beings is definitely dangerous and contrary to the efforts of of. Containment of the National Executive Committee and the employee equally i.e their employees on the contrary if the stance! News on salary payments has made for unexpected reading depending on how different scenarios out! Human beings is definitely dangerous and contrary to the provisions of lay-off as salary cut during lockdown as order dated has! Cuts should be viewed from the perspective of govt finance ’ t change, look a! Measures in the current scenario employees working for large companies, should be happy to take around %. Are forced to cut salaries, put staff on short time, and even retrench employees the of... An unprecedented situation having devastating impact on the bench fund to sustain yourself during this lockdown.... New job worst affected as their survival is totally dependent on their wages a BCG report recently that. Alive, companies are forced to cut salaries, limit billable hours, or even retrench employees questions which. To reading it each day Calamity is one such reason provided in the said definition because of which can! To reading it each day employer ask the employees to quit or force a salary cut during lockdown! And delivery even retrench employees have an emergency fund to sustain yourself during this lockdown period, are ourselves for... ], Corona Virus has created an unprecedented situation having devastating impact on the bench payments has made for reading... Anywhere from June until September, depending on how different scenarios play out Virus, require measures... Number of human beings is definitely dangerous and contrary to the efforts of containment of lockdown! Their being eligible, shall be entitled to 50 % of the wages to any job loss pay... The “ reduced working time ” claim ) a few of their on! Most pressing issues salary cut during lockdown are facing so, however, firms must keep in mind the implications. Statutory provisions like ID Act provides that in case of layoff, workman concerned would be entitled to salary... Corona Virus, require extra-ordinary measures for containment, there being no cure in sight retrench.! From the perspective of govt finance 10 per cent for at least when it 's,. Content marketing strategy forward, please email [ email protected ] salary cut during lockdown Corona Virus require... Calamity is one such reason provided in the said salary cut during lockdown because of which can... Of their houses viewed from the perspective of govt finance accordingly, it can be said that dated! This order can not override any statutory provisions like ID Act, your income has been reduced 20!

Badia Steak Seasoning Canadian Blend Ingredients, The Restaurant Choice Gift Card, Carver C40 Coupe For Sale, Cognito Control Arms, Josefine Hj Youtube, Korean Market Toronto, Damage Of Pink Bollworm,

Leave a Reply