Employer deny remuneration to employees

Can the Employer deny remuneration to employees if they couldn’t come due to COVID-19?


In response to the COVID-19 pandemic, employers from different industry verticals have modified conventional working methods for limiting contact between the employees. Salary and bonus cuts as well as mass layoffs, embracing the remote working tactics, there is one thing that is quite clear i.e., the workplace won’t be the same ever again. 

As the world of work is undergoing drastic alterations due to the sudden outbreak of Coronavirus, there are a lot of questions about the legal implications of a few actions which the employers make may take due to this. Can they economize employees? Should they withhold bonuses or salaries? There are a lot of questions like these that have the legal implication as well as should be answered by legal professionals. And the major one is that should they offer pay to the employees in case they can’t come (or prohibited from coming) to work due to the Coronavirus outbreak? 

Needless to say, the principle of “no work no pay” can’t be invoked here. However, both, employers and employees have their side of the story which needs to be heard. Let’s take a look. 

What do the Employees have to say?

As per an article by “The Economic Times” dated March 24, The Government asked private and public establishment employers not to cut the salaries or lay off the employees during COVID-19. In the wake of this pandemic, there might be incidents where the services of workers or employees might be dispensed with on the pretext of the ailment or the employees might be forced to take a leave without pay, as per the Ministry of Labour & Employment. 

In the view of such a demanding situation, every employer of private or public establishments might be suggested not to terminate the employees, particularly contractual or casual workers, or reduce the wages, according to the Ministry. An employee’s termination or cut in their salary will further deepen this crisis as well as will weaken their monetary condition along with hampering their morale for combating this pandemic, as per the advisory. 

As mentioned by plenty of workers, managers are not answering the phones, as well as one of the colleagues, got in touch with the HR representative who asked him that if the former doesn’t come to work, how he can be paid. Besides, while the lay-off, organizations ask the employees for handing in their resignation letters. A majority of the employees agree, instead of taking their employer to the court since it can hurt the former’s future job prospects. This very fact ensures that firms can’t be accused of firing people. 

What employers have to say?

With the COVID-19 outbreak, a lot of employers struggle to prepare for the worst, which include leaves, work from home, insurance, compensation, along with several other factors. This condition brings about a lot of worry with managers and reporting heads etc., with the senior management such as the company’s stakeholders and board of directors. Citing catastrophic business conditions and the fact that even the Government Companies are freezing allowances and cutting wages, a lot of firms believe that denying remuneration is what they are forced to do in this situation. 

The distressed businesses have a lot of unsold inventory while others are impacted by the shutdown of global and local markets as well as the unpaid bills. Moreover, some firms have launched legal challenges against the wage orders set by the Government. They want the Government for subsidizing to a maximum of 70% of the wages during the lockdown, utilizing either Government-held provident-funds, emergency funds, or the employee saving, the move which is opposed by trade unions. 

    • Moreover, employees might not be capable of performing their jobs for 2 reasons i.e., the nature of work not being supported at house and illness – family or self.
    • In the latter case, there are several possibilities for participation i.e., first of all, in case the employee is sick, the sick leave will be applied by the statutory store as well as established laws in every state. 
    • Secondly, in case he/she is tested but not found positive, they can utilize sick leave for recovering from the ailment.
    • Furthermore, in case he is found COVID-19 positive after returning from the official trip, the Company is obliged for providing 28 days of the paid leave for quarantine along with complete recovery.
    • However, firms are not required for providing paid leave for the recovery, Karnataka being the only exception, in case the employee is found infected from Coronavirus after the personal trip. 
    • In case the employee is required to take the leave for taking care of the sick family that is diagnosed with Coronavirus, the employee will perform the self-isolation for 28 days as well as will apply for the leave for yearly leave.

Ask the employers about the situation and they say, “The whole social responsibility can’t be passed onto the employers who run capital firms and if it continues to take place, we will soon be pushed into bankruptcy.” The Government has not even permitted organizations for paying wages utilizing their CSR (Corporate Social Responsibility) funds as paying wages for no work becomes the social responsibility and not the statutory one. 

Final Thoughts

While every detail is being argued in court between the trade unions, companies, and the Government, millions of workers face the danger of slipping into extreme poverty with the unexpected disappearance of wages. With the enhancement of cases in the country and elsewhere, the crucial situation of Coronavirus seems to be increasing by the hour. Therefore, it is of utmost significance that the directors become pro-active for curbing the virus as well as ensure their employees’ safety. Also, this will assist decrease liability and risk from the legal claims to which, during these dangerous times, firms have a much higher exposure than what can be imagined. 

Furthermore, the Company and its employees can also have a meeting and decide whether or not there is an alternative so that a better decision can be taken.