Kerala government passes ordinance to defer payment of part of its employees’ salary

At the Secretariat in Thiruvananthapuram, security personnel checking the body temperature of an employee at the entry gate.

The Kerala government has brought an ordinance—with Governor Arif Mohammed Khan signing it on Thursday—giving legal validity to its decision to set aside six days’ salary of its employees for the next five months. The ordinance was necessitated by the stay ordered by the Kerala High Court on the implementation of this decision of the government through an executive order. The purpose of the order was to mitigate the severe financial difficulties the government is facing in the wake of the COVID-19 crisis.

The Kerala Disaster and Public Health Emergency (Special Provisions) Ordinance empowers the State government to defer up to 25 per cent of the salary of government employees in case of a disaster or health emergency. It also allows the State government up to six months to take a decision on giving back the deferred amount to the employees.

The government had informed employees that it was going through an unprecedented financial crisis, with drastically reduced revenue and necessary expenditure following the COVID-crisis. It was in such a context that the government decided to defer the payment of salaries.

The government order had said that employees who were drawing a gross salary of over Rs.20,000 would be required to defer a portion of their salary equivalent to six days for each month from April 2020 till August 2020. Thus, the proposal is for the deferment of a total salary of one month by end of the five months.

However, several opposition employees’ unions approached the Kerala High Court against this move. In its order issued on April 28, the Kerala High Court allowed a stay of two months on the government order. Though it praised the government for its COVID-19 containment efforts, the court said the government did not have the power to delay the disbursement of salary by a few months by an executive order. “When our Constitution in unmistakable terms stipulates that property of a citizen can be deprived only by an authority of law, and when that authority of law means a law duly framed, the government order to be valid, must of necessity trace its source to some provision of law,” the court said.

None of the provisions of the Disaster Management Act 2005, specify or confer any power upon any government to defer the salary due to its employees during any kind of disaster. Prima facie, the law is found wanting to justify the issuance of the government order, the court said.

It also said that “there is ambiguity in the manner in which the amounts obtained from the proposed deferment of salary is planned to be utilised. It only refers to the financial difficulty that is faced by the government”. The court order said: “The said financial difficulty is not a ground for the State government to defer the payment of salary by an executive order. Prima facie, I find that deferment of salary for whatever purposes it may be, amounts to denial of property. In such a view of the matter, I stay the operation of the government order for a period of two months,” a single bench of Justice Bechu Kurian Thomas said.

The State Cabinet had decided to ask the Governor to promulgate the ordinance it had drawn up based on the provisions of the Disaster Management Act 2005 in order to overcome the legal hurdles posed by the court order. It has within its purview all government employees, teachers, those working in local bodies, all statutory institutions, universities and all other institutions under the government.

Finance Minister Thomas Isaac said that even though the ordinance allows the government to defer up to 25 per cent of the salary of its employees, the government is going ahead with its stated objective of setting aside only six days’ salary in the next five months (or 20 per cent). The government expected to get a deferred amount of Rs.,2500 crore through this measure, which it intended to keep in a separate account only to be used for COVID-19 relief efforts.

The money thus collected is not a contribution to the disaster relief fund. It is an employee benefit that belongs to them. It is just being deferred. It is to be paid back to the employees. This month the salary will be distributed from May 4 itself, giving first preference to health workers and police personnel, the Minister said.

The Governor also signed an ordinance that allows the government to deduct 30 per cent of salary or honorarium of Ministers, MLAs, board chairmen and such others for one year.