During this pandemic, the government has issued many advisories and notifications against companies terminating the services of their employees or cutting their wages during the lockdown.

Aviation, media, hospitality, banking and financial services have been hit hard due to coronavirus crisis. Directives have been issued by the Home Ministry for factories, shops and establishments to pay workers their wages without any deduction. PM Modi on April 14 while announcing the extension.

But even after such measures, some corporates have already announced salary cuts, unpaid leave; lay off etc. some legal experts pointed out that any change in terms of employment during such times can be counted as an offence.       

Labour laws in India protect the rights of the workmen. So it should be the consent of the employees if they agree for reduction of wages or salaries but we are observing that companies are able to cut cost through many creative ways. In this scenario employees agree rather than taking their employer to court as it could affect the future job prospects which ensure that companies cannot be accused of firing people.

If we see this from employer point of view, the companies are incurring losses due to zero revenues during the lockdown; many employers may genuinely not be in a position to pay full wages on time. So employees would agree to take lower salary than be out of a job.

This termination of an employee from the job or reduction in wages in this scenario would further deepen the crises and will not only weaken the financial condition of the employee but also hamper their morale to combat their fight with this epidemic.

By concluding it can be observed that COVID-19 will affect the jobs and then wages will be affected which hits the earning capacity. It will create real impact on the economy. In other one or two years’ time will be difficult and slowdown symptoms can be seen like already in the share market.