"Extraordinary situations demand extraordinary measures". [Prithipal Singh v. State of Punjab].

Efforts are being made at all levels to augment public resources to tide over the unprecedented, unforeseen COVID-19 crisis. By way of Presidential Ordinances, salaries and sumptuary allowances payable to Members of Parliament and Ministers were reduced by 30% for one year starting from April 1. Some of the states have followed this.

The discretionary funds given to the Members of Parliament (MPLADS Fund) has been suspended for the next two years. Judges of the Supreme Court, and of several High Courts, have contributed to the PM-CARES Fund. The Central government, by an Official Memorandum of April 23, froze the Dearness Allowance and Dearness Relief payable to its employees and pensioners respectively, at the currently applicable rates. A hike was given in such DA and DR, and the payment of such hike has been postponed till after June, 2021.

The Kerala Disaster and Public Health Emergency (Special Provisions) Ordinance, 2020 was promulgated on April 30, 2020 and consequential notifications have also been issued.

When things stood thus, two significant orders were passed by our courts on May 5. The first was by the Kerala High Court, which refused to stay the operation of the Ordinance and the notifications issued thereunder. The second was by the Supreme Court which refused to entertain a PIL seeking a direction that there should be no cuts in the salaries of the police personnel (COVID warriors). Both, happily, are a shot in the arm for governments in moulding their policies as demanded by the challenges of the day.

Kerala was on the backfoot when it suffered an interim order that stayed its executive order, and thereafter the Ordinance was promulgated. That is an important takeaway for other states that may want to follow suit. The Kerala example is discussed here, as to the permissibility “imposed austerity”, if one may use the term.

The efforts to tide over the crisis of these trying times by seeking to defer payment of a portion of the government servants’ and other like employees’ salaries have been widely misreported as ‘cut in salaries of Government Servants’. Kerala issued a Government Order on April 23, providing that for the months of April-August 2020, payment of 6 days’ salary would be deferred, and to be paid later.

The Government Order was challenged by way of a writ petition, and the Kerala High Court, on April 28, stayed the operation of the GO for two months. Operation of the GO was stayed mainly on the basis that “salary” being “property” cannot be withheld by an executive order: the law was found “wanting”.

The Ordinance was promulgated on April 30. Disaster and Public Health Emergency have been cited as the necessity for making special provisions. The only misgiving could have been that the Ordinance was promulgated to defeat the judicial order of stay. That is surely not so: firstly because the “wanting law” is in place by way of the Ordinance and secondly because it is always open to remove the basis of a judgement by introducing an Ordinance/law. [Municipal Corpn of the City of Ahmedabad vs New Shrock Spg and Wvg. Co. Ltd.].

The Kerala Ordinance

The object is "to make special provision for the deferment of any payment in part, due and payable to any person, institution and any pay, in part, to any employee in the event of disaster and public health emergency in the State and for the matters connected therewith or incidental thereto".

“Disaster”, in Section 2(a), means a catastrophe, etc., natural or manmade and includes disasters notified under the Disaster Management Act, 2005. Section 2(f) defines “public health emergency” as meaning any health situation or emergency and includes any contagious or epidemic disease. Section 3, overriding any other law, rule, code, etc., empowers the government to defer any payment due and payable to any person or institution, in part.

Section 4 provides for deferral of part of pay in the case of a government employee. Section 5, likewise, provides for deferral of part of pay payable to employees of certain institutions, including local self government institutions, statutory bodies, etc. The provisions have been given overriding effect, and any judicial order to the contrary is also overridden. The deferral, in all cases, is conditioned such:

(a) the deferral shall be only in the event of a disaster or a public health emergency;

(b) the deferred payment shall not exceed twenty five per cent of the payment due; and

(c) the deferral shall be for such period for the management if the situation arising out of the disaster or public health emergency or otherwise.

The deferred payment shall be given back to the person concerned and the government shall do so by issuing a notification within six months of the issue of the first notification.

The notifications issued under the Ordinance stipulate that 20% of the emoluments (six days’ salary) for the months of April-August 2020 would be deferred and paid later. Employees getting a gross salary of less than Rs.20,000 per month are excluded, and so are employees who have contributed to the CM Relief Fund. Such delegation to the executive may seem excessive, and it would be advisable for the law itself to make the prescriptions as to quantum and exclusion.

Deferral, not denial or deprivation

The Ordinance engrafts safeguards to ensure that the person’s or employee’s dues from the government are not denied - only a part of it is sought to be paid belatedly. There is a solemn duty cast on the government to give back the deferred part pay and an outer time limit is also stipulated. The deferral is hedged with stringent conditions. There can be no arbitrariness or infirmity in such reasonable action.

As part of the Directive Principles of State Policy, Article 47 casts a duty on the State to raise the level of nutrition and the standard of living and to improve public health. Economic and social planning is also a legislative head available to the State in Entry 20, List III. Legislative competence is clear and evident from the various entries, not only in the State List but also in the Concurrent List.

Since there is no denial of pay, the deferral of a part of pay qua identified classes of employees can be said to be part of the modalities to be worked out by the State in the disbursement of such pay. It is purely a matter of policy - economic and social.

Our courts have recognised that the government has some ”play in the joints” in the sphere of public employment. [K Nagaraj v. State of AP]. Further, a law like the instant one, is an economic legislation. The Supreme Court, in RK Garg v. Union of India, quoting from American decisions, held:

"Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc...legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters..."

Dealing with a matter of economic policy, the government is entitled to make pragmatic adjustments which may be called for by particular circumstances (Permian Basin Area Rate cases).

Consent of the employee, in such circumstances, is irrelevant. The mode and manner of disbursement of salary of a government servant can at best be pitched as a condition of service. The conditions of some employees of the government may be changed unilaterally, as the relationship is not governed by contract but by the statute and rules. Consent is not a pre-condition for such change. [State of J&K v. Triloki Nath Khosla].

The Ordinance is criticised as having deprived the right to property, for it prescribes postponement of a part of the salary, which is property. Salaries to government employees are to be paid out of public funds. We in India have a socialist Constitution.[K Guruprasad Rao v. State of Karnataka].

It bears repetition that a pragmatic adjustment, whilst consciously not denying salary and assuring delayed payment, is part of the socio-economic policy. Ultimately, “from each according to his capacity and to each according to his needs” is ingrained in our socialist Constitution. Further, “to defend the country and render national service when called upon to do so” is a fundamental duty . The State is entitled to channelise all resources to tide over the crisis occasioned by a public health emergency.

The author is an Advocate-on-Record at the Supreme Court of India.