May 11, 2020
Hon’ble Supreme Court

PIL challenging the business model of financial sector’s operations

In addition to the human tragedy, COVID-19 also poses a challenge on the financial sector’s operations and business models that also engage a wide range of laws and regulations. As organizations are striving to maintain business continuity and offer protection to their workforce, they may also have to face competing legal and regulatory pressures. In the wake of the present pandemic, the Central as well as State governments have issued various advisories, directives and orders concerning the Employers and the Employees. Please read our detailed update in this regard impact of covid-19 employees and state wise covid updates. Various state governments have advised and directed the employers to not lay-off or retrench its employees, and further directions relating to the payment of full wages amid COVID-19 to all the workers during the period of the lockdown have also been announced.

On April 27, 2020, the Supreme Court of India has admitted certain public interest litigations (“PIL”), that challenged the constitutional validity of the orders passed by the Ministry of Home Affairs (“MHA”) dated March 20, 2020, and March 29, 2020, asking and directing employers to refrain from terminating employment of its employees, and mandating the employers to pay wages to their employees during the lockdown. Different petitions had been filed by a Mumbai-based textile firm being Nagreeka Exports, a Karnataka-based packaging company being Ficus Pax Private Limited, and a Punjab-based Ludhiana Hand Tools Association, which were clubbed and heard together[1]. The Bench hearing the aforementioned petitions comprised of Justices N.V. Ramana, Sanjay Kishan Kaul and B.R. Gavai. A period of two weeks’ has been granted to the Central Government to place a definite policy on record relating to the implementation of its order on payment of wages to the employees.

In another PIL[2], which has been filed jointly by National Alliance of Journalists, Delhi Union of Journalists, and the Brihan Mumbai Union of Journalists against various media organizations for arbitrary lay-offs, salary cuts and related conduct, the Bench has directed a copy of the petition to be provided to the Central Government to file an appropriate reply within two weeks. The petitioners, among other reliefs, have prayed for immediate suspension of all the termination and resignation notices/orders, wage reductions and directions to proceed on unpaid leave(s).

We are making persistent efforts to track these matters  and shall keep you updated in this regard.

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[1] WP (Civil) No. 10983/2020

[2] WP (Civil) No. 10948/2020

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