Employer-Employee Relations: Challenges during and post Covid-19

Employer and employee are two sides of the same coin and must sail together during this difficult storm of Covid-19.

ETHRWorld Contributor | July 08, 2020

The Covid-19 pandemic has already been declared as a ‘notified disaster’. All pervasive medical conclusions concur that Covid-19 is here to stay. The scare will continue along with the employer-employee challenges. Losing jobs and salary deductions are the grave consequences faced by employees. Employers are grappling with restricted cash flows and will continue to do till the economy recovers. Establishments will have further challenges to implement their respective policies for employees following the Work from Home (WFH) policy. The obligations passed on employers by various government orders passed and/or to be passed would pose another challenge.

The relationship between an employer and employees is governed by the contract of personal service. In the wake of the Covid-19, employers may resort to the deduction of salaries in mutual agreement with their employees. In case, an employee is refusing to work at a reduced salary, employers may choose to terminate employment by complying with the terms of the contract like paying notice salary or notice of termination. But even paying a few months’ salary would be a challenge any employer would face. Employees always have the option of approaching a court of law for seeking damages but they do not have the right to seek reinstatement in their organization. Under present circumstances, even the claim of damages would be a questionable issue, but the challenge for employees would be to have recourse to legal means in the absence of regular income.

In the case of workmen who are employed in compliance with the terms of industrial laws, the employer-employee relation will be as per the statute.

As part of a Ministry of Home Affairs (MHA) notice dated March 29, establishments were directed not to cut salaries or terminate employment of workmen or migrating workers. Similar directions were issued by various state governments under the Epidemic Act. These orders were challenged before the Supreme Court.

It has been contended that orders passed by the Government are arbitrary, illegal, and violative of the constitutional provisions. A prayer has been made to quash these orders and direct the Government to subsidize wages of workers for the lockdown period by utilizing the funds collected by ESIC or PM Cares Fund. The Supreme Court has been requested to pass appropriate directions to the Government to strike a balance between the interest of MSMEs and employees in a manner that neither is duly prejudiced.

The Government passed another order dated May 17 removing the restrictions imposed vide order dated March 29, 2020 with effect from May 18. Thus, these restrictions survived for a period of 50 days.

The Government’s contention is that its measures are within the legislative competence; ESIC funds cannot be utilized for payment of salaries; the order of 29th March has remained operational only for 50 days and the Government has offered an economic stimulus package to all MSMEs to enable them to cope with the current financial situation.

The Supreme Court on 12th June, passed an interim order and observed that now the dispute is only with respect to the period of 50 days for which period the order of 29th March survives and, therefore, both employers and employees of all the private establishments, should make an effort if any settlement, based upon negotiation can be entered into between them with respect to the payment of wages/salaries for 50 days so as to restore congenial work atmosphere.

While the Government and the Judiciary are mulling over the perspective to be adopted for improving the critical situation, employers should adopt a humanitarian approach and employees should realise the fact that cash flows are reduced and the employer is in a difficult situation. A consensual approach where the employee agrees for deduction and the employer is taking a humanitarian approach while deciding minimum salary cut will help build strong relations between the employer and the employee. All such establishments who are availing government policy benefits like loans should be sympathetic towards employees.

Another challenge is the new norm of WFH. In the absence of any codified law on WFH, the challenge to the employer would be to devise mechanisms for governing an efficient WFH culture & environment.

By the time Covid-19 goes and the scare is eliminated, many organisations will have implemented procedures for WFH. There are many ifs & buts but the businesses got to run. While we cannot expect things to be like what they were in the pre-covid-19 phase, normalcy is expected to return in a gradual manner.

Employer & Employee are two sides of the same coin and must sail together during this difficult storm of Covid-19.

The author, Sanjay Gupta, is Senior Partner at SNG & Partners.

DISCLAIMER: The views expressed are solely of the author and ETHRWorld does not necessarily subscribe to it. ETHRWorld will not be responsible for any damage caused to any person or organisation directly or indirectly.