[Breaking] Kerala HC Refuses To Stay Ordinance For Deferment Of Salary Payment In Public Emergencies [Read Order]

The Ordinance was promulgated by the Kerala Government last week, on April 30 to defer payment of up to 25% of monthly salary of its employees during the times of disasters and public emergencies.

A single-Judge bench of Justice Bechu Kurian Thomas was hearing a batch of petitions challenging the Ordinance for it being violative of the Indian Constitution, and seeking interim relief of stay.

Petitioners' Arguments

The Advocates appearing for the Petitioners widely relied on Article 309 of the Constitution to state that service conditions of government employees cannot be altered "until provision in that behalf is made by or under an Act of the appropriate Legislature." Since the parent Act and the Kerala Service Rules had not been amended by the state legislature, it was argued that the Ordinance was unconstitutional.

It was contended that the Government had proceeded in violation of the Principles of Natural Justice as the consent of the employees was not obtained before promulgation of the Ordinance, which was also alleged to be in contravention of the employment contract executed between the Government and its employees.

Pertinently, the Kerala Government had first issued a government order on April 23 for deferment of payment of 6 days' salary of government servants per month for the next five months.

On April 28, the HC stayed the operation of the salary deferment order for two months on the ground that there was no statutory support for it.

The Petitioners contended that the impugned Ordinance had been passed solely for the purpose of defying the court's stay order and to "grab" the salaries of the employees when the Government had itself failed to contemplate and prepare an "advance plan" to deal with a disaster, under Section 23 of the Disaster Management Act.

Heavy reliance was also placed on the statutory right to property under Article 300 of the Constitution, in the present case salaries of employees, which was averred to be a "compensation for services" and not a "bounty" which could be taken away.

Reliance was also placed on the advisory issued by the Union Ministry of Labour & Employment asking employers not to terminate/ reduce wages of their employees and it was argued that the impugned Ordinance was discriminatory towards employees in the state of Kerala.

Further, reliance was placed on Article 360(4)(a)(i) of the Constitution which provides that a direction for reduction of salaries may be passed in case of a Financial Emergency. It was submitted that the Ordinance was unwarranted since it was not a case of 'Financial Emergency'.

An argument was also made to protect the rights of Health workers who have been working day in and out during the pandemic, and yet have not been granted any exemption under the Ordinance. Further, that the Ordinance does not mention a "definite time period" for which the salaries will be deducted and it is also open ended and does not state the "purpose" for which the fund will be utilized.

Lastly, it was argued that the Ordinance violates the Right to life and livelihood of the employees, as enshrined under Article 21 of the Constitution and affirmed by the Supreme Court in Olga Tellis & Ors. v. BMC, 1985 SCC (3) 545.

State's Arguments

The State Government on the other hand stressed on the fact that the Ordinance merely "deferred" the payment of salaries and there was no reduction in the same.

On this basis, Advocate General C P Sudhakara Prasad argued that there was no "change" in service conditions vis-à-vis Article 309 and Article 360(4)(a)(i) of the Constitution as payment was merely deferred, not reduced. He also submitted, on the some precedents, that actions of the legislature have precedence over any rules made in lieu of Article 309 of the Constitution.

On being asked about the legislative competence behind the Ordinance, the Court was informed that the same was enacted in terms of various entries in List II and III of the Seventh Schedule to the Indian Constitution.

Further, Advocate Kaleeswaram Raj submitted that the Ordinance could not be said to be in defiance of the court order since the same was a mere "stay" and "not Mandamus".

He also responded that there is no scope for Principal of Natural Justice when it comes to enactment of a law, even by way of Ordinance and thus, the consent of employees in matters of legislative actions is not required.

The state argued that the "balance of convenience" was in their favour, as its income had had significantly dropped during the lockdown.

It was also submitted that paragraph 7 of the Ordinance clearly states the payment of salaries is only deferred and a scheme for repayment of the same will be notified within six months.

Findings

The bench held that the Entries under the Lists given in Schedule 7 of the Constitution have to be "literally and widely interpreted". When the Government says that they have legislative competence under the aforementioned entries, the court cannot interfere with the Ordinance at such a nascent stage, Justice Thomas observed.

He stressed that the purpose behind the Ordinance was to only defer an amount payable to a certain specified class of employees belonging to certain specified institutions. The Ordinance itself provided that the Government will notify a mechanism for paying back the deferred amount and it does not partake in taking away rights of employees.

The court also refused to stay the subsequent notifications issued by the Government for deferment of payment to Govt teachers. It also denied the request for exempting the Health Workers from this Ordinance while holding that the Ordinance uniformly applies to all government employees, there is no classification/ discrimination entailed therein and hence, any interference is uncalled for.

The matter has now been deferred till second week of June.

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