Wage-Game post-Corona, 2019/2020: Any Rules?

Bhaskar Majumder

Every game has a rule – the rule evolves. Rule is obeyed or violated so long as the rule exists. The players understand the rules – totally or partially – if they play the game. The dice may have its bias that only Shakuni knew in the Great Epic Mahabharata – Judhisthir played it with Shakuni as the opponent player – twice, without understanding the consequences on all. There were no judge – there were only two players representing two parties, Kauravas and Pandavas. In India’s Corona War that is continuing beyond the pledged time of 18-day tenure in Mahabharata war, it is not dice but the balance of power – apparently invisible. Actually, the parties in this post-Corona Social War, 2019/2020 are the wage-givers and the wage-takers. In the 21st century, there is the legislative as the rule-formulator and the Judiciary as the referee.

So far, I was beating around the bush for two reasons – one, I am in shock and awe; two, my brain-locked syndrome for remaining home-locked for more than 40 days post-Corona. But my shock must be spelt out at this stage and I may be excused if I pen wrong for my brain-locked condition. Quoting from The Hindu dated April 29, 2020: “It is implicit in the fundamental right of an employer to trade or business that there is an obligation to pay when work is actually done and there is no obligation if no work is done. An employer and employee have reciprocal promises whereby the right of an employee to demand salary is reciprocal to performance of work by such employee. The employer has a right to not pay if no work is done’’ (p. 1). This is what some enterprises pleaded before the Apex Court of India. The Court accepted the plea “not to pay wages in no-work’’ and asked the Ministry of Home Affairs (MHA) to respond by two weeks explaining why its Order of March 29, 2020 should not be null and void.

What was March 29, 2020 directive from the MHA? It mandated “that industry, shops and commercial establishments, without exception, pay their workers without any deduction in the name of COVID-19’’ (p. 1). Front page news on The Hindu must have credibility and hence I would like to focus on it now with three questions: Q1. Were the workers employed on “No work, no pay/wage basis’’? Q. 2. Was the wage negotiation based on wage/payment daily, weekly, monthly, yearly? Q.3. What is meant by “salary is reciprocal to performance to work’’?

Before I go further, let me quote the capital-side again from The Hindu (p.8) in continuation: “stoppage of operations since the lockdown has led to losses to the tune of Rs. 1.50 crore.’’ Hence, the employers “asked the court to order the government to support them by taking responsibility for 70% of their staffers’ pay by drawing funds from the PM Cares Fund or the Employees State Insurance Corporation’’. My questions in continuation: Q.4. Were the workers responsible for the estimated loss (of the companies)? Q. 5. Why 70.0 per cent and not 100.0 per cent? Q. 6. Why from PM Cares Fund?

Let me now formulate the on-going game as an observer from outside. A is the capital-owner; B is the wage-worker; C the MHA, GoI; and D the Apex Court. There was a static equilibrium pre-Corona between A and B – wages negotiated, accepted, and the plant came to be operational. Wages were paid that the workers earned what may be termed labour-compensation in division of labour that capital fixed. The division of labour was technology or state of art derived that the capital-owner decided or applied in the plant. The worker was free-hand – separated from the technique of production and the output produced. In Neoclassical parlance, capital produced output that was distributed between the workers. The workers, thus, were beneficiaries in the production function.

Now, post-Corona, C intervened and applied its welfare measure asking A not to deduct salary for no-work. It seemed like pre-emptive step taken by C. Conventional wisdom suggests non-payment of salary if work is not performed by B. So A approached D for non-payment of salary to B. It is organized industry/enterprise – so the game needed institution. The principle of D is, follow the rule. D cannot change the rule – needless to say. So, for D, it was to see if rule had been followed.

The following are my response on the first Q-set in the above game:

  1. The loss of the company estimated; it was capital-owner’s loss. This is natural in the Schumpeter frame. Once plant is set up, all these are estimated as normal profit, supernormal profit and all after wages are paid.
  2. The capital-owner has to clarify if the workers were employed on “no work, no pay’’ basis and the tenure by day/week/month/year.
  3. The capital-owner as controller of technology has to reveal “performance of work’’ by productivity or other relevant indicator.
  4. The capital-owner has to clarify “reciprocal promises’’ between the employer and the employee, because reciprocity is obscure in unequal relations.

 On the second Q-set, the following are my response:

  1. Industry or enterprises follow flow input-flow output; hence, temporary disequilibrium like 40-day Corona may not fully explain the loss, if any.
  2. The enterprise needs to reveal if it can draw payable sum from its cluster of firms, if any, or by borrowing from banks.
  3. Paying from PM Care Fund is a sheer non-sense proposal, be it 70.0 per cent or 100.0 per cent.

Meanwhile, a Parliamentary Standing Committee on Labour has been set up by the Government of India that opined it unjustifiable for the capital-owners to pay wages during Corona period. The labour laws in existence in India allow workers to get layoff compensation in case businesses are disrupted by a ‘natural calamity’.   

The Standing Committee was myopic when it opined: “…in case of natural calamities .....which often result in closure of establishments for a considerably longer period without the employer’s fault, payment of wages to the workers (towards layoff compensation) until the re-establishment of the industry may be unjustifiable”. The Report of the Standing Committee was made public on April 24, 2020. Though the Ministry of Labour and Employment, Government of India, defended the ‘natural calamity’ clause, the Standing Committee did not accept it.

Pending the judgement of the Apex Court, I think justice will not be violated if I may point out the following:

  1. So long as shut down is not declared, wage payment is binding.
  2. Lockdown was not imposed by the workers, so was by the capital-owners.
  3. Lockdown did not follow declaration of “natural calamity’’ by the state.
  4. Corona is not synonymous to fighting war for sovereignty.
  5. Non-payment of wages means prolonged hunger of the workers.
  6. Uninformed non-payment of wages means coercion, if not violation of prevailing Acts.
  7. State is responsible for feeding people, if the head of the family fails, following Kautilya.

What I suggest is, assuming that capital is protected as against labour following the trajectory of capitalist development particularly post-Keynes (1936), the state has to take the responsibility to rehabilitate the workers in jobs that suit their skill including in Corona Centres with training to take care of the people affected. The enterprise has to allow the workers to live in labour colonies in case they were provided these. The workers mostly learnt by doing – it was enterprise-specific. Capital has to save labourers in crises for labour produced capital – capital is dead labour. I shall not suggest payment of wages-for-no-work from the PM Care Fund unlike what capital-wise enterprises suggested.
Payment of wages is non-negotiable notwithstanding the game being in Apex Court for the workers were employed in the enterprises independent of their choice in technology-output. A worker is not a football – he is a living body that at the minimum needs biological survival. Non-payment of wages even for short-period means starvation-suicide-death of family members of workers. Capital-deficit of an enterprise may lead to “Quit India’’. I believe the state is at one with me of which I am an integral part.    

Bhaskar Majumder, Professor of Economics, G. B. Pant Social Science Institute, Allahabad - 211019

Back to Home Page

May 6, 2020

Prof. Bhaskar Majumder

Your Comment if any