RAMIFICATIONS OF COVID-19 ON EMPLOYMENT RELATIONS
Indisputably, the COVID- 19 pandemic is having wide-scale implications on the economy
worldwide and the stark reality of government quarantines and travel restrictions has
impacted the workplace and workforce in truly unprecedented ways. To curtail the spread of
the COVID- 19 pandemic, the Central Government as well as the State Governments, have
implemented tremendous measures and have taken umpteen steps, which, inter alia, affected
the functioning of workplace and the businesses of the employers. Although, the measuresand the steps taken by the Central as well the State Governments are novel and quintessential
for the curtailment of the spread of COVID- 19 in India, however, the impact of suchmeasures and steps are shaking the foundations of employer-employee relationship in India.
To protect the welfare of the employees, the Central and State Governments have issued
several directions, orders, advisories and regulations for the employers, inter alia, requiringthem to provide security of employment and wages to the employees. However, theemployers are no exception to the COVID- 19 crisis, and their businesses have also majorly
suffered and got impacted due to the outbreak of COVID- 19. In the backdrop of businesses,
which are in a shut-down mode, the employers are also facing financial distress in complying
with the pro-employee directives/orders/regulations issued by the Central and State
Governments.
It, therefore, becomes imperative to analyse and understand the applicability of various
directions, orders, advisories and regulations issued by the Central and State Governments forthe interests of the employees and their impact on the relationship between the employers andthe employees. Though, the employers cannot evade their obligations under such directions,orders, advisories and regulations, however, to protect the interests of the employers in thispandemic situation, it is essential to carve out a mid-way or an acceptable way to balance theinterests of the helpless employers and their helpless employees, while coping with thecompulsions enforced by the Central and the State Governments.
GOVERNMENTAL ADVISORIES / MANDATES The Secretary, Ministry of Labour and Employment, issued an advisory on March 20,
20201 to the Chief Secretaries of all States/UTs, that all employees / workers may bedeemed to be on duty, in case the place of employment is made non-operational due tooutbreak of COVID- 19. It was also advised all private and public enterprise to not toterminate the employment of the employees, including casual and contract workers, andnot to reduce or deduct their wages for the period that the employee takes quarantine
leaves.

1

https://labour.gov.in/sites/default/files/Shri%20Sailesh.%20Secretary%20DPE.pdf
1 Government of Uttar Pradesh vide Notification dated March 20, 20202 directed that theemployees/workmen who are affected by COVID-19 or who are suspected to be affectedby COVID-19 and are kept in isolation, will be provided paid leaves of 28 days by theiremployers. In the said notification, it is further directed that Employee/Workmen of theshops/commercial establishment/factories, which closed temporally by the orders of theState Government or District Magistrate, shall be provided holidays with wages by theiremployer for the period of such temporary closure.
 Government of Delhi vide Order dated March 22, 20203, directed that the employees,
including temporary, contractual and outsourced, of all private establishments shall betreated to be on duty, and shall be paid in full.
 Government of Haryana vide Letter dated March 23, 20204, advised the employers of theprivate establishments, not to terminate the employment of employees and workers andnot to reduce their wages/salary.
 Ministry of Home Affairs vide its Order dated March 29, 2020 5 , directed that allemployers, be it in the industry or in shops and commercial establishments, shall makepayment of wages to their workers on the due date, without any deduction, for the period
their establishments are under closure during the lockdown.
 The Government of Gujarat has advised the private establishments vide letter dated
March 30, 2020 6 to not terminate employees or reduce wages during the period oflockdown.
 The Government of Maharashtra, Labour Department vide Notification dated March31,20207, stated that no reduction in wages or wages of homeless/ displaced workers andforeign workers trapped during the lockdown due to spread of COVID-19.
All the orders/advisories issued by the Central and State Governments were issued under thepowers conferred under the Epidemic Diseases Act, 1897 (“Epidemic Act”) andthe Disaster Management Act, 2005 (“DM Act”). Thus, violation of theorders/advisories issued by the Central and the State Governments would attract punishment2

https://prsindia.org/files/covid19/notifications/781.UP_Labour%20Epidemic%20Order%20for%20Paid%20Le
ave%20by%20Employers_March%2020.pdf
3
http://health.delhigovt.nic.in/wps/wcm/connect/deaf86804da4c3bb8687f7982ee7a5c7/lock.pdf?MOD=AJPERES&lmod=48689189&CACHEID=deaf86804da4c3bb8687f7982ee7a5c7
4 https://prsindia.org/files/covid19/notifications/408.HR_advisory_factory_workers_Mar_23.pdf
5https://mha.gov.in/sites/default/files/MHA%20Order%20restricting%20movement%20of%20migrants%20and%20strict%20enforement%20of%20lockdown%20measures%20-%2029.03.2020.pdf
6
https://prsindia.org/files/covid19/notifications/2364.GJ_Wage_Payment_Mar%2030.pdf
7
https://prsindia.org/files/covid19/notifications/1593.MH_wages_Mar_31.pdf
2

under Section 51 to 60 of the DM Act, 2005 besides legal action under Section 188 of theIndian Penal Code, 1960.
From the various guidelines/advisories/directives issued by the Central and the State
Governments, it is clearly implied that during the lockdown period due to COVID- 19
pandemic, it would be difficult for the employers to terminate or reduce the salary of theemployees including workmen.
WAYOUT FOR THE EMPLOYERS
To mitigate the human resource expenditure, while still being within the four corners of theadvisories/orders issued by the Central and the State Governments, the employers may
consider the following options: Employees (other than workmen 8 ) can be requested (i) to utilise their existing leavebalances for the lockdown period; or (ii) to observe the lockdown period as unpaid leaves.
The consent to the said requests given by the employees, should be duly recorded via
letter or e-mail. However, it would be difficult to implement such requests for theworkman, as it would require compliance of 21 days notice period under the Industrial
Disputes Act, 1947 (“ID Act”).
 Employers can have negotiations with the Workers’ Unions and arrive at a mutuallyacceptable settlement. The Unions must also be conscious of the grave financial crisis
resulting from the spread of COVID-19 and hopefully they might agree to negotiate on
the terms beneficial to the workers of the Union and the employer, to cope-up with thepresent pandemic situation and protect continuation of business in future. Under thesettlement, the Unions may have to give up some privileges and entitlements and theemployer in turn may have to give assurance to the Unions that the employees will beadequately taken care of once the lockdown gets over through some measure ofrecompense.
 Employees (other than workmen) can be requested for reduction in the salary ordeferment in the payment of the salary. The consent to the said request given by theemployees, should be duly recorded via letter or e-mail. For the workmen category ofemployees, it would not be possible to ask them to accept the reduced wages.

8Workman is defined under Section 2 (s) of the ID Act, as any person (including apprentice) employed in any
industry to do manual, unskilled, skilled, technical work but excludes any person who is inter alia (a) employedin managerial or administrative capacity; or (b) employed in supervisory capacity draws wages exceeding INR
15,000/- per month.
3 The quantum of discretionary and non-contractual/statutory benefits given to employees,
can be reduced. For example, certain employers, who provide uncapped provident fundcontributions, can make the provident fund contributions capped in accordance with theprovisions of the Employees’ Provident Funds and Miscellaneous Provident Act, 1952.
 Employers can relax the employment terms pertaining to resignation, allowing employees
to easily resign from the employment. Such relaxations can be elimination of therequirement of serving prior notice or removal of employment lock-in period.
 The concept of work from home is new to India and there is no statutory legislation
governing this concept. Thus, all relevant labour law legislation including hours of workand overtime, would continue to apply on the employees, even if they are working fromhome. Accordingly, employers must be cautious about compliance of the applicablelabour law legislations including keeping a track on the actual working hours of theemployees working from home.
 The employer can defer or cancel the joining of new employees, as the orders/advisories
made by the Central and the State Governments are not applicable on them.
 As of now, the applicability of the advisories/orders regarding payment of wages, nontermination and non-reduction of wages would remain valid only for the period of thelockdown. After the lock-down is lifted, the employer would have certain options under
the labour laws as regards the workmen:a) As per the provisions of the ID Act, an employer has the right to lay off its workmen,
on account of a shortage of any resources or raw-materials, accumulation of stocks,
breakdown of machinery or natural calamity. For laying off the workmen, it isnecessary to follow the procedure laid down in the ID Act. If the lay-off period is upto
45 days, then the employer is required to pay compensation equivalent to 50% of thebasic wages and dearness allowance. However, the lay off period can be extended formore than 45 days without any compensation, provided there is an agreement with theUnion/workers to this effect.
The stringent procedure of lay-off mentioned under ID Act, including payment ofcompensation, is applicable only for those establishments which employ more than 50workmen. Other establishments employing less than 50 workmen would need tofollow the specific terms of employment, for the procedure of laying off.
b) The employer can also retrench its workmen under the ID Act, by following theprocedure provided in the ID Act. The procedure of retrenchment depends on the sizeof the establishment. For retrenching the workmen, employer is required to serve 1months’ or 3 months’ prior written notice to the workmen. Before retrenchment,
4employer has to take prior permission from the appropriate Government or such
authority as may be specified by that Government.
c) The above mentioned options of lay-off and retrenchment is required to complied
only for the workmen. For non-workmen, the terms of employment agreement
executed with them and/or the provisions of applicable shops and establishment act,shall be required to be followed for laying-off and retrenchment.
[The contents of this article should not be considered as our legal advice and it is imperative
to seek prior independent legal advice for acting upon any of the information providedherein.]5