On Wednesday, 29 April, the Kerala government announced that it would be issuing a new ordinance which would allow it to defer or deduct salaries of state government employees to mobilise funds to fight the coronavirus.
Why is this significant?
A day before that, the Kerala High Court had stayed the original order by the Kerala government to defer 1/5th of the salaries of those earning above Rs 20,000 per month, for five months.
On the face of it, this seemed like a reasonable move, given the financial impact of the COVID-19 crisis. Also, Kerala was not the only state which thought to do this. The problem, however, was that the Kerala government had, much like many pandemic responses by states and the Centre, failed to go about these pay cuts in the right way.
And following the Kerala High Court’s lead, other government employees can also now object to the pay cuts they are being subjected to, and push for these to be done by the book.
What Did Kerala Get Wrong?
The Kerala government passed an executive order on 23 April setting out the deferment of 1/5th of pay for five months. When the idea had initially been announced by Chief Minister Pinarayi Vijayan, he had indicated that government employees had said they were willing to contribute one month’s salary to the Chief MInister’s Disaster Relief Fund.
He had also reportedly said that the state would return the money deducted to the employees when the financial situation improved.
However, the executive order itself didn’t contain any clarity on either of these two points: (1) What the money saved by the state would be used for; or (2) How and when the money would be paid to the employees – essential, as it was only supposed to be a deferment of pay, not a permanent cut.
The petitioners who approached the high court were unions and individuals from different departments and institutions under the government. They argued that not only were these points unclear, but that the order was issued without the backing of any law, and was unconstitutional as it violated Article 300A of the Constitution of India.
Article 300A says that no person can be deprived of their property except on the basis of the law. The Kerala government employees argued that they were entitled to receive their salary in full every month under the Kerala Financial Code and the Kerala Service Rules, and that there were only limited situations in which this could be deducted.
The right to ones’ salary is a form of property, and so this could not be taken away unless the conditions in the law were strictly followed – it cannot be done arbitrarily, even in the middle of a crisis like a pandemic. If the Kerala government wanted to do such a thing, they argued, they would need to draft an entirely new law which allowed them to make deductions (temporary or otherwise) to the salaries of government employees.
Kerala passed order deferring salary of employees earning over Rs 20,000 per month.
Kerala HC found that there was no legal basis for this, passed interim order staying deferral of salaries as this was violation of Article 300A of Constitution.
Other states like Andhra Pradesh, Telangana, Rajasthan, Odisha and Maharashtra have passed stricter pay cuts for government employees.
Using principles followed by Kerala HC, state (and even central) government employees across country could challenge pay cuts, as these have mostly been passed through similar executive orders.
The Kerala government argued that they didn’t need to pass any new law, that the wide powers given to states under the Epidemic Diseases Act, (amended by Kerala using an ordinance earlier this year to give it even more powers to deal with the coronavirus crisis) and the invocation of the Disaster Management Act, meant they could take any steps necessary to deal with the financial fallout of the battle against COVID-19.
Justice Bechu Kurian Joseph, however, disagreed with the Kerala government’s submissions, and also made another very important point: just because what a government is doing is important, or just because its efforts have been successful, doesn’t mean the rule of law can be ignored.
“However laudable and appreciable the action of the State may be in its fight against the pandemic, when this Court is called upon to determine an issue which has far reaching legal consequences and which affects the vested right of its citizens, this Court cannot ignore the legal framework in which our society revolves.”Justice Bechu Kurian Joseph’s interim order dated 28 April
After reviewing some Supreme Court decisions on the right to money as property, the judge agreed with the petitioners’ contention that a person’s salary cannot be withheld, deferred or denied by the state government without the authority of law, thanks to Article 300A.
According to Justice Joseph, the Kerala government’s executive order for salary deferral did not fit within any framework of the law. The Epidemic Diseases Act and the Disaster Management do “not specify or confer any power upon any Government to defer the salary due to its employees during any kind of disaster.”
The judge also specifically pointed out that the order did not state how the money retained by the state government was to be utilised, and only referred to the financial difficulty faced by the state. However, 'financial difficulty' is not specified in any law as a ground for the Kerala government to defer payment of salaries by an executive order.
What Can Other Govt Employees Take Away From This?
Compared to the measures in states like Andhra Pradesh, Odisha and Rajasthan, where some government employees are looking at pay cuts of up to 50 percent, the measures proposed by Kerala are mild. Other states like Telangana and Maharashtra, have announced pay cuts of up to 30 percent as well.
These cuts are not applicable to essential workers such as sanitation workers, police and of course healthcare personnel. Nonetheless, they will impact thousands of other government employees significantly.
In these states as well, the cuts appear to have been made by nothing more than an executive order, with the state governments expecting the Epidemic Diseases Act to grant them the power to do so. However, as the Kerala High Court order shows, this approach is flawed, as such wide powers can’t be used to take away a government servant’s salary on a whim. Also, there has to be some detail on what exactly the government will do with the money saved.
It should be noted, of course, that the Kerala HC’s order is not binding everywhere, and is not even a final judgment, but an interim order. However, the principles relied on by Justice Joseph are sound, and can be applied in other states, particularly where the cuts are severe. They should also apply to arbitrarily issued pay cuts by the central government as well.
The objective behind this isn’t to stop the pay cuts. In many states, these are a necessity. But if such measures are not taken the right way, inconsistencies and dangerous ambiguities to creep in, such as the Kerala government’s failure to say when the deferred money would be paid back to the employees, effectively making the deferrals a permanent cut.
If the states instead have to pass ordinances or rules to make such changes to employees’ pay cuts, this will force them to make sure such issues are addressed, rather than issuing arbitrary 'farmans', as Kerala is now doing. Such an approach will not just benefit the government employees facing these pay adjustments, but will also benefit the general public, as it will encourage governments to follow the rule of law in other matters as well.