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Old 24th March 2020, 08:46   #1
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Default Covid-19: Public, private companies told not to cut salaries or lay off staff

Prime Minister Narendra Modi has asked the companies not to cut the salary of the employees or not to slash jobs.

In the backdrop of such a challenging situation, all employers of public or private establishments may be advised not to terminate their employees, especially casual or contractual workers, or reduce their wages, the ministry said.
Quote:
New Delhi: The government asked public and private establishment employers not to cut salaries or lay off employees during the coronavirus pandemic. In view of Covid-19, there may be incidents where services of employees or workers may be dispensed with on the pretext of the disease or employees may be forced to go on leave without pay, the ministry of labour and employment said.

Workers taking leave should be deemed to be on duty without any consequential deduction in wages and if the place of employment is made non-operational due to Covid-19, the employees of such organisations shall be deemed to be on duty, it said.

The termination of an employee or a cut in salary will only further deepen the crisis and will not only weaken their financial condition, but also hamper their morale to combat this epidemic, the advisory said.

Meanwhile, the Central Provident Fund Commissioner has directed field offices of the Employees’ Provident Fund Organisation to generate and reconcile pensioners’ details and pension amount statements for the current month by March 25 to ensure that no inconvenience is caused to pensioners because of the lockdown across the country.

The details are be forwarded to the banks in advance so that the monthly pension is credited to the accounts of the pensioners in time - during March itself, EPFO said.
Source
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Old 24th March 2020, 09:04   #2
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Private companies will be on a double edge sword. On one side, private companies, especially small and medium sized ones will themselves be at risk of being wiped out due to no cash flows and still coping with the fixed costs and working capital requirements. On the other hand, as per this request in hand from the government, it will be very difficult for them to pay salaries without any inflows due to the lockdown.
At the most, I see this as a ‘request’ from the government rather than any advisory or official order. Good if India Inc including small and medium enterprises can do it but I’m very sceptical about it.
When it comes to the question of survival, promotors will prefer heads rolling than pulling the shutters down.

Last edited by saket77 : 24th March 2020 at 09:09.
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Old 24th March 2020, 09:12   #3
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Quote:
Originally Posted by saket77 View Post
At the most, I see this as a ‘request’ from the government rather than any advisory or official order. Good if India Inc including small and medium enterprises can do it but I’m very skeptical about it.
When it comes to the question of survival, promotors will prefer heads rolling than pulling the shutters down.
You are right. This is only a request. If they make it an order, the government has to pay the salary themselves.

Most small companies with limited working capital cannot abide by this request.
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Old 24th March 2020, 09:12   #4
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

My brother runs a garment factory with about 50 employees. Export orders meant for shipment by March 31 are stuck at various levels and the threat of cancellation is looming large as the deadline approaches and factories are shut. The industry as such is already threatened by rising costs. A cancellation will result in six-seven figure losses.

Really stressful times.
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Old 24th March 2020, 10:07   #5
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

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Originally Posted by Samurai View Post
Most small companies with limited working capital cannot abide by this request.
Also large companies that are directly affected have indicated salary cuts. For example Indigo and Go-Air have announced salary cuts of up to 50%. I am afraid, many others will follow.
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Old 24th March 2020, 10:33   #6
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

I have 4 sites where developmental works are happening. Supporting the labourers till 31st is fine. But if it drags further, it will be a huge challenge as I see the revenue drying up for a few months.

For now we have asked the teams to take care of the immediate necessities. Also we have 2000 odd plants that were planted recently. As of now we are supporting them with tankers as drip system is not installed. But with curfew getting drivers to the site is becoming a problem. Trying to find a work around as of now
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Old 24th March 2020, 11:33   #7
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

1. The U.K. is paying 80% of all private company salaries subject to a max of £2500 per month for 3 months which would be extended further if the government feels it is necessary.

2. The US is paying $1200 per person, $2400 if it's a married couple and $500 for every child. That makes it $3400 for a family with 2 kids. Persons drawing more than $75000 aren't eligible.

3. India is BYOB..no, not Bring Your Own Booze, its Bust Your Own Bank.
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Old 24th March 2020, 12:06   #8
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Would request everyone to pay their supporting staff in advance for 15/30 days - be it maids, shop owners, watchmen, drivers, etc or working contractual staff; irrespective of whether they are able to report to work in the coming weeks. Even provide loans if you need to; it'll definitely go a long way for them!

The below image of working capital/cash buffer is very vital to see how the local small businesses (around us) are going to be affected heavily due to this pandemic; something that in-service WFH folks like us would not be able to exactly comprehend.

Covid-19: Public, private companies told not to cut salaries or lay off staff-working-capital.jpg
Source: Twitter (cant' find the exact tweet)

Also a lot of these folks would be around others who might be in similar situations; so the money that you provide them might help others in their family/friends too.
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Old 24th March 2020, 12:20   #9
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

This is a forward going around on Whatsapp:

Quote:
Dear PM & CM,

You have declared a complete closure till 31st March & are requesting all to keep the offices, Shops & Factories closed. Also you are urging the businessmen to show sympathy towards the needful employees 'n pay them.

We would like to understand what are you thinking about the OWNERS? How are you planning on supporting the business class from whom you are demanding this sacrifice?

Because the closure has been announced & the businesses are on a total standstill how will they survive? SALARIES - ON, ELECTRICITY BILL - ON, TAXATION - ON, BANK INTEREST - ON, GST – ON, PF – ON, ESIC – ON, PROPERTY TAX - ON. There is no relief for us. We don’t mind sitting home till 30th April if these expenses are cut off. The government needs to compromise and extend the support directly and immediately to all business.

We recommend the following:

All commercial electricity bills be cut to half for the next 3 months.

Companies be allowed to retain 10% of GST payable for next 12 months.

Moratorium of interest payments for next 6 months.

All EMI’s to banks and NBFC to be put on hold for 6 months with no levy of interest or delayed payment.

Employee share of the PF not to be paid by the companies but to be borne by government for a period of 6 months.

Employee share of the ESIC not to be paid by the companies but to be borne by government for a period of 6 months.

Property tax for FY2020-21 to be reduced to half for all commercial properties

THE WAY YOU GAVE INTEREST WAIVER TO THE FARMERS DURING DROUGHT SITUATIONS. THIS IS A DROUGHT TIME FOR US BUSINESSMEN TOO. REST WE WILL TAKE CARE.

PLEASE SHARE TILL IT REACHES THE PM, CM, FM AND FINANCE SECRETARY.
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Old 24th March 2020, 12:27   #10
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

The lock down will be one more body blow to small businesses the way demonetization was. And if this continues beyond 31st March we can expect several small businesses to be diminished permanently or shut down for good. And as Samaspire has written above all Govt and statutory costs are on at full load with revenue switched off??

Last edited by V.Narayan : 24th March 2020 at 12:29.
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Old 24th March 2020, 12:52   #11
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Quote:
Originally Posted by saket77 View Post
At the most, I see this as a ‘request’ from the government rather than any advisory or official order.
You are right.

Below is what I have come across so far.

Covid-19: Public, private companies told not to cut salaries or lay off staff-advisory-covid19-labour-comm.jpg

Covid-19: Public, private companies told not to cut salaries or lay off staff-labour-ministry.jpeg
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Old 24th March 2020, 13:07   #12
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Quote:
Originally Posted by samaspire View Post
Because the closure has been announced & the businesses are on a total standstill how will they survive? SALARIES - ON, ELECTRICITY BILL - ON, TAXATION - ON, BANK INTEREST - ON, GST – ON, PF – ON, ESIC – ON, PROPERTY TAX - ON. There is no relief for us. We don’t mind sitting home till 30th April if these expenses are cut off. The government needs to compromise and extend the support directly and immediately to all business.
This is the part that is really biting businesses. If the government can't relax these payments when they tell businesses to shutdown, they have no right to ask businesses to keep paying salaries.

Indian governments (state and central) and their officialdom have only one kind of relationship with the businesses and even common citizen. Demand things, and threaten them with dire consequences. They simply don't have the habit of helping. Most of them will be confused and won't even know how to begin the process of helping the very businesses they have already treated like ATMs and serfs.

Last week I was talking to a close friend who probably has 50 times more interaction with government officials than I ever have. He mainly deals with district/taluk/village level officials. He agreed that these officials won't know how to switch gears and start helping the very people their milked/bilked all their career. Government has to find a way to help directly, without depending on the corrupt officials in between. Delaying bills and taxes for few months would really help.

Here is an example from my industry. Now that everybody needs to work from home, the DOT is magnanimously (sic) willing to waive prior permission requirement to work from home for call center agents. However, the call center company must keep track of the name, address and static IP of each agent. Sounds reasonable? Not really. Most agents live in PGs and their chances of getting broadband with static IP at their PGs is close to zero. Each such violation will be fined up to ₹5L, and the company can lose its license.

With this notification, the DOT officials feel they have helped the businesses during the Coronavirus pandemic. You will see this kind stupidity all across industries. That is why they are not even thinking about suspending bills/taxes owed to the government.

Covid-19: Public, private companies told not to cut salaries or lay off staff-dot.jpg

Last edited by Samurai : 24th March 2020 at 13:54.
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Old 24th March 2020, 14:02   #13
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Without any action plan of their own, I see these kinds of notices serving only one purpose for the government - earning brownie points. Project yourself as a benevolent saviour appealing to the blood sucking bania. They had no business issuing anything like this. In a world of collective WhatsApp stupidity and Chinese whispers, this circular will eventually get modified to read as a decree wherein business owners are altogether banned from sacking their employees.

My restaurant has been almost bludgeoned to death by this epidemic. Like a good citizen I downed shutters a week back, much before janta curfew became a buzzword. I immediately got down to calculating how long I can survive, and what best I can do for the staff. Luckily I have temporarily placed them at another restaurant, albeit at a lower salary, with the promise that I will pay the differential. If things don't improve 1st April onwards, I will be forced to give them notice. I have already given notice to the landlord to set the ball rolling on that front, so that the next 3 months can be wait and watch. I ensured that there is enough inventory in the restaurant for the staff to consume in case the lockdown continues for long. We care for our staff more than these politicos will ever, even for their own kind.

Simply issuing a nothing statement is easy. For someone who is on the verge of selling his car to fund the salary and rent for the coming months, all I want to do with such notices is use them like toilet paper. Never was a better time to show true leadership and sacrifice. All we get is unsolicited gyan from a letter drafted by secure bureaucrats who are probably having groceries delivered home to them by their orderlies. Some of my business licenses are due for renewal from April. Will the government guarantee that I will be able to renew them without a single rupee to be paid in bribe? Will they waive off the fee altogether? Come on, I am very easy to please.

Last edited by Malyaj : 24th March 2020 at 14:09. Reason: deleted repeated word
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Old 24th March 2020, 14:35   #14
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

Quote:
Originally Posted by Samurai View Post
*SNIP*

Here is an example from my industry. Now that everybody needs to work from home, the DOT is magnanimously (sic) willing to waive prior permission requirement to work from home for call center agents. However, the call center company must keep track of the name, address and static IP of each agent. Sounds reasonable? Not really. Most agents live in PGs and their chances of getting broadband with static IP at their PGs is close to zero. Each such violation will be fined up to ₹5L, and the company can lose its license.*SNIP*

Pardon my ignorance, but why would any private company need any permission from the government to let people work from home? Or am I misunderstanding your point?


Cheers
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Old 24th March 2020, 14:42   #15
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Default re: Covid-19: Public, private companies told not to cut salaries or lay off staff

As I post this, the Finance Minister is announcing various relief measures live on news.

Amongst this dates for filing IT, GST extended.

Sensex up by 1200 points.

Last edited by AMG Power : 24th March 2020 at 14:57.
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