Illegal Termination of an Employee during Covid-19
Due to the current lockdown being exercised by order
of the Government of India for maintaining physical distance or to avoid
forming group amongst people to protect and to eliminatethe spread of the deadly
virus. The lockdown came into effect from 25.03.2020 with nationwide closing of
the industries, private/public entities, and other workplaces have led to some
serious consequences on the working class. Corporates due to interrupted
business have led into financial difficulties resulting in the layoffs from the
workforce to reduce the cost, in turn,immersingthe numbers in the balance
sheet. In the time of covid-19, employers have laid off many employees, most of
them were contractual in nature.
Introduction
An illegal termination is an act by an employer who is
laying off an employee without providing a fair arrangement for such a layoff
or by not following the legal method while terminating them.
Illegal termination can be classified with majorly
different categories such as:
1. Discrimination.
2. Breach of Contract.
Though there are many other factors that are also
categorized under the heads of illegal termination that are:
1. illicit order of the employer.
2. personal grudge.
3. dispute
Discrimination is an attitude or biases towards a
particular personal traits and hatred for others. Such character traits also
include age, race, sex, nationality or any other discriminatory grounds.
As employer and employee are parties to the contract of
employment, such contract has laid down rules and condition regarding the
employment and the employer cannot terminate any person from the employment in
violation of such condition if any employer conducts such termination it will
be termed as illegal, and action can be taken against such employment. There
many rules and regulation provided under the various act such Workmen
Compensation Act, 1923, Industrial Disputes Act, 1947 and states Shop and
Establishment Act.
During this global pandemic, the employees have been
laid off from the course of their employment without providing any rationale,
in turn, proving to violate the code of conduct of the contract of the
employment. Many employees have been laid off with reasons stating the poor
performance of the employee, there is neither any proof provided nor any basis
for such reason, further, in some companies, there were provisions regarding
the training period in case of poor performance which has not been complied
pursuing to covid-19 nationwide lockdown which makes such termination illegal
in nature, but no answer has been provided for relief of terminated employees.
Due to nationwide lockdown, many (HR) departments personnel have been engaged
in the process of termination such termination has led many illegalities as such
personnel have been laid off without paying any severance package which is an
essential part of the termination process. Many employees who were working for
more than a period of a decade were laid off without any warning or notice
period, which is essential for termination.
Though discussions have been held with the cabinet
secretaries for maintaining the peace and harmony in the state that also
includes the employment as an aspect to be considered for the eventual
objectivity, i.e. stability of the state. Though order has been passed by the
Ministry of Human Resources and development that states that “No employer will
terminate or retrench any employee from the course of employment for any reason
not in violation of the code of conduct, with rationale provided by the
lockdown, the word employee also includes casual and contractual employees.”Many
corporate employershave been terminating the employee from the jobs to cover
the cost that has been lost due to interrupted businesses. Employees though
have been looking forward and searching for new opportunities without
participating in the battle against such wrongful termination,have lost faith
in the stable economic situation and are in the state of turmoil.
Whereas, government and people from the legal
fraternity after taking due cognizance of the matter, as they have been enthusiastic
in finding and accumulating help in fighting against such terminations. Various
guidelines have been issued that revolves around the topic discussing the
termination of the employees in this current circumstance.
Start of
the lockdown
During the start of the lockdown, the Government
circular tdated 29th March 2020was issued in accordance with the
National Disaster Management Act, 2005 and in some states under the Epidemic
Diseases Act, 1897 that is applicable on all the entities in the country stated
that“no entity will be allowed to terminate any employee of any nature unless a
violation of the contract under which such employment was agreed”. Under the
said notification by the government read along with the Payment of Wages Act,
it states that an employer is responsible for the payment of salaries to his
employees in full without any unauthorized deduction even in the time of
nationwide lockdown such proviso makes compulsory for any employer to comply
with the employment rules and not terminate the employee that might be treated
loss of wages which is in violation of the act read with government circulars.
Though there was some scope in the dispute regarding reduction in salary but
the same dispute has been settled in contrary stating that any reduction will
result in the violation of section 7 of the Payment of Wages Act including the
lockdown pursuing to covid-19.
Any reduction by the consent of the employee, if at
all has been mandated, will not be allowed, though the employment contract may
have the proviso that can allow any employee to voluntarily or by consent agree
to reduce the salary but such decision will not be allowed as long as the provisosof
Disaster Management Act are applicable. The government circular is proposed to
promote the safety of the worker and employees in the period of the pandemic,and
this will also include non-retrenchment and layoffs. Further issuing guidelines,
it is also important to take the cognizance of the operational aspect of
industries pursuing to the lockdown the business may have interrupted with
their offline activities such organizations are expected to implement work from
home culture to future date as determined so to protect the interest of the
employees. Also Disaster Management Act, 2005 allows the Central Government to
form the national Disaster Management Authority that will be playing a major
role in framing policies to mitigate the loss and protect the objective of the
welfare state, and section 38 of the Act also makes it compulsory for all the
states to follow the direction provided by the authority. Moreover, section 78
of the said Act has an overriding effect over any other law, to the extent, it
is inconsistent which concludes that any order of the Ministry of Home Affairs
will override the state orders and municipal order to the extent they are
inconsistent.
Surveys and
Statistics
According to the survey conducted by the Azim Premji
University, seven out of ten (72 per cent) workers in Karnataka reported having
lost their employment during the Covid-19’s lockdown. This survey was conducted
in collaboration with ten civil society organizations. In a statement released
by the university, it stated that a detailed phone survey of 5,000 workers
across 12 states in the country, to estimate and understand the impact of the
pandemic on employment, globally. It will also gauge the impact on government
relief schemes. Talking about the survey, it covered self-employed, casual,
salaried workers, and the ones who work as per the system of regular wages.
The survey findings stated that seventy-six percent of
urban workers and sixty-six percent of rural workers lost their employment amid
the nationwide lockdown. For wage workers and the non-agricultural
self-employed workers, who were still employed and doing their work, however,
the findings said that their average weekly earnings witnessed a fall by
two-third. The findings also revealed that more than four in ten
salaried workers (44 per cent) saw either a reduction in their salary or
received no salary during the lockdown.
As a reply to these
findings of the survey, the team which conducted the survey suggested the
expansion of Public Distribution System to increase its reach and
implementation of expanded rations for at least the next six months. With
these, it also suggested proactive steps like the introduction of urban
employment guarantee, investment in universal basic services and expansion of
MGNREGA. Cash transfers equal to at least Rs.7000 per month for two months was
also suggested by the survey team.
Various Issues and Circulations
As the country entered the next phase of the lockdown,
the Ministry of Home Affairs has withdrawn the order which stated that
companies were entitled to pay full salaries to its employees and workman,
through the period of nationwide lockdown. This move of the government will
bring much relief to a large number of companies and industries which were not
in the capacity to pay full wages to their employees amid the lockdown. While issuing guidelines for this phase,
Union Home Secretary Ajay Bhalla's order on Sunday said, "Whereas, save as
otherwise provided in the guidelines annexed to this order, all orders issued
by National Executive Committee (NEC) under Section 10(2)(1) of the Disaster
Management Act, 2005, shall cease to have effect from 18.05.2020."
The guidelines released for the fourth
phase did not include the March 29 order issued by the Union Home Secretary,
that directed all the employers to pay wages to workers on due date without any
deductions, though the commercial unit was closed during the lockdown period.
Appeals in
the Courts
The Supreme Court of India, in its recent hearing, in
the case Ficus Pax Private Limited v. Union of India stated that “no coercive action against firms for not
paying full salary during lockdown”. The court in this regard was hearing a
bunch of petitions that were filed by several private companies that could not
pay full salaries to their employees and therefore challenged the order
released by the Ministry of Home Affairs to pay full salaries to employees
during the 54 days of Lockdown. The Supreme Court further asked the private
companies to reach to a settlement between them and the employees over the wage
payment. It had also asked for a report to be submitted before the
commissioners. The court also asked the Centre to file an affidavit within the
time period of 4 weeks, challenging the Ministry of Home Affairs, ordered to
pay full salaries to employees in the 54-day lockdown, that was implemented by
in view of the pandemic. The bench consisted of Justices L N Rao, S K Kaul and B R Gavai, concluded that both the industries and labourers need
each other in these tough times and efforts should be made to resolve the dispute
over wage payments.
The court on 4th June had observed that
some negotiations need to take place between the employers and workers to iron
out what has to be done for the salary of these 54 days. The Micro, medium and
small enterprises (MSMEs) stated that the 29th March dated order
issued by MHA was not taken in keeping the situation these small businesses
which have been impacted adversely due to the pandemic.
Senior advocate Jamshed Cama, appearing
for the association, said the companies are going out of work as they do not
have orders for production of goods and they are being prosecuted due to the
government circular. Therefore, it is necessary that the government supports
the companies as well as industries in these tough times. Solicitor general
Tushar Mehta, appearing for the Centre, said that he had a conference on the
issue and needs to file a detailed response on the pleas. The Association of
MSME further stated that such blanket decision of the government to provide
full salaries to the employees is arbitrary, unconstitutional and unsustainable.
The Supreme Court passed a set of
interim orders and stated that a settlement process is necessary to be carried
out between the employer and the employee to safeguard the interest of both the
parties. Accordingly, the supreme court has passed the following interim
directions:
1.
The private
establishments, industries, employers, are now allowed to initiate the process
for negotiation and settlement with their employees, workmen to reach to a
conclusion regarding the non-payment of wages in this nationwide lockdown. If
the settlement cannot be carried out between both the parties, the
establishments can approach the labour authorities for such settlement. Once
the settlement is done, the same can be applied without taking in consideration
of the MHA order dated March 2019, 2020.
2.
The above-mentioned
relief is also made applicable on those establishments which were not functioning
in their full capacity.
3.
The
settlement shall be without prejudice to the rights of the employers and
employees which is pending in the writ petitions already made by them. The
private establishments shall permit the workers who are willing to work without
prejudice to their rights regarding unpaid wages of above 50 days.
4.
The
government shall take all the necessary measures to publicise and circulate
this order so that it benefits both the employees and employers. The said
circulation has to be carried out through the Ministry of labour.
The above case will now be taken up at the end of July,
and till then no coercive action can be taken against the employees as
instructed by the Supreme Court of India.
Another plea was filed by the National Information Technology Employees Senate (NITES), a
Maharashtra-based IT union, seeking protection of IT employees against
termination and salary cuts in the wake of the Covid-19 pandemic. The bench
which was headed by Justice L Nageswara Rao, Sanjay Kishan Kaul and BR Gavai,
turned down the plea.
The Supreme Court, dismissing the petition read, “We are not
inclined to entertain this petition under Article 32 of the Constitution of
India. The writ petition is accordingly dismissed.” Article 32 of the Indian
Constitution provides the citizen with remedies which means that a person has
the right to move to the Supreme Court and high court also, for securing his
fundamental rights. The petition was filed with an aim to ensure that employees
working in private companies are protected and not legally sacked against their
rights mentioned under Articles 14, 19(1)(g) and 21.
The petition was filed after a lot of IT companies in
the country initiated a drive of illegal mass termination of the employees,
withholding the salaries of the employees and illegal pay cuts by the
employers. Experts report that close to 1.5 lakh IT/ITeS employees could lose
jobs due to the ongoing pandemic.
In a statement, a spokesperson of Cognizant, an IT company who has been accused of illegal termination, said that “Performance management is a normal process across all companies in the IT industry, including Cognizant.” However, Vinod AJ, General Secretary of FITE (Forum for IT Employees) stated that “We plan to file such petitions in Bengaluru and Kolkata as well. We want to expose to the government as well as the society the mass terminations that are going on. Because of this, not just thousands of employees but also their families are getting affected. The government should intervene immediately” He further added “They cannot terminate workers by just branding their performance as poor. Cognizant Chennai’s policy itself says that when an employee gets poor performance ratings, they will be put in a performance improvement programme. After three to six months of training, their performances are evaluated, and the company can then take a decision whether to retain them or not”
As in his own words, Dr Kislay Pandey, an eminent
lawyer of the Supreme Court, has submitted that if at all any person who has
been wrongfully terminated by his/her employer, it becomes a stronger case
against the employer. Further, he mentions that Indian Contract Act, 1872 which
deals with the contract of employments silent against the term force majeure
(Act of God) that benefitted the employees, if at all such argument has been
filed on such rationale there’s no case has there is no legal value to that
term, or it can be said that it has mere theoretical existence. Though any term Act of God has been used or
if mentioned in the contract does not include pandemic as such, which still
leaves no scopes to use against any complaint filed.
Conclusion
It is advisable to take measures to help the country and
eliminate the crisis by implementing different policies, but every policy
should be implemented in the nation’s interest. In a simultaneous effort by the
government, it is important for the business sector to maintain the hold of
nation’s interest paramount to any other interest, a sector which contributes
to major part of not just the country but the world at large. Business sector
should comply with humanitarian policies beyond mere business strategies and
valuation of the business in terms of money’s worth.
Following the direction provided by the legislature
every person should put efforts in protecting his/her interest with the
societies interest, the further legal professional should maximize their
efforts in providing legal help to people who suffered in this pandemic for
promoting the righteous nature and object of the legislature. Any situation
resulting termination of the employees should resort to the legal remedies
provided by the government. Any situation resulting termination of the
employees should resort to the legal remedies provided by the government.
Business sector should consider the government's effort to protect and promote
national interest to defeat the grave consequences of the pandemic, this effort,
in turn, will help the nation to build a stable economy in coming years. This
act is contrary to policies of government for any reason whatsoever,willfurther
lead the economy.
The recent decision taken by the Ministry of Home
Affairs will, however, help both the companies and the employees to reach a
decision of payment or non-payment. The country is in a situation where
lockdown restrictions are yet not lifted up, and therefore, there are many
companies which have not started their operations still. A bunch of petitions
in the Supreme Court were filed, which is now dismissed taking in view of the
current pandemic. These, in turn, is just messing up the situation in the
country regarding the scenario of an employee and employer relationship.
The author of this blog/Article
is Kishan Dutt Kalaskar, a Retired Judge and practising advocate
having an experience of 35+ years in handling different legal matters. He
has prepared and got published Head Notes for more than 10,000 Judgments
of the Supreme Court and High Courts in
different Law Journals. From his
experience he wants to share this beneficial information for the individuals
having any issues with respect to their related matters .
.png "Legal Notice issued to CM Bhagwant Maan for defamation by Shri. Sardar Sukhbir Singh Badal")
