COVID-19: What Business In Tamil Nadu Should Know

March 2020

Between March 15 and March 23, 2020, the Government of Tamil Nadu (“GoTN”) issued a few orders and circulars to deal with public health and combating COVID-19, which the businesses, particularly, the manufacturing companies and IT and ITES companies, in Tamil Nadu (“TN”) should know. Key updates are below:

1. Orders issued under Epidemic Diseases Act

1.1 On March 15, 2020 the Health and Family Welfare Department of GoTN issued an order for passing TN COVID-19 Regulations. The Regulations have authorised the district collector to take appropriate containment measures including closure of offices or establishments, banning vehicular movement, barring entry and exit of population from the containment area etc. It also imposes certain duties on the hospitals.

1.2 So far, GoTN issued a notification on March 23, 2020 (“GoTN Notification”) imposing further restrictions in the state from March 24, 2020 18:00 to April 1, 2020 06:00. This notification directs closure of operations of all shops, commercial establishments, non-operation of public transport facilities, etc., unless they are exempted under the notification. Commissioner of Police, Greater Chennai Police/Additional District Magistrate passed an order on March 24, 2020 under Section 144 of the Code of Criminal Procedure for implementing the restrictions imposed under the aforesaid notification.  Pursuant to the order dated March 24, 2020 issued by the Ministry of Home Affairs regarding a national lockdown, this is likely to be extended for 21 days with effect from March 25, 2020. At the time of writing, no such order has come.

2. Exemption to manufacturing services and additional compliances

2.1 GoTN exempts health related manufacturing units and their transportation activities, production, manufacturing, transport, storage, wholesale, retail of essential items from the aforesaid restrictions. Besides, all industries which are permitted to operate shall work at 50% of their strength on rotation basis.

2.2 Recently, the Directorate of Industrial Safety and Health issued guidelines reiterating the mandatory compliance of health provisions prescribed in Factories Act and TN Factories Rules. The factories are required to provide additional protective equipment like mask, gloves and aprons, facilities for thorough hand washing and alcohol-based hand rubs. Factories are also expected to explore whether they can frame policies for flexible worksites and work hours (e.g., staggered shifts) to increase the physical distance among employees and staggered lunch timings to avoid all the workers gathering at a time at canteen.  To safeguard the health of workers and to prevent the outbreak of COVID-19, it also requires strict compliance of directions issued by the Department of Health and Family Welfare, GoTN and Ministry of Health & Family Welfare, GoI, which, amongst other things include, social distancing, requiring employees to work from home, and for manufacturing of essential goods, they may continue their operation with limited employees.

3. IT/ITES and other essential services

3.1 IT and ITES companies are regulated as commercial establishments under TN Shops and Commercial Establishments Act and TN does not have a specific essential services maintenance legislation. GoTN Notification specifically exempts operation of IT, financial services back offices and ITES companies from the purview of restrictions. IT and ITES units need to ensure employees work from home and if it is not feasible, units dealing with critical and essential services may continue to operate taking all protective measures and transportation arrangement for those employees is also exempt.

4. Payment of wages

4.1 GoTN Notification provides that the employers will make payments of wages to workers, employees, including contract labourers during the period. Any violation of the measures stipulated in the notification would be punishable under Indian Penal Code, the Epidemic Diseases Act and the Disaster Management Act, 2005.

4.2 Additionally, the central Ministry of Labour and Employment has also issued an advisory on March 20, 2020 specifying that if the place of establishment is non-operational due to COVID-19, the employees of such unit will be deemed to be on duty and employers are advised not to deduct wages/salary.

PSA’s view: While the central and state governments are taking these initiatives, any amendment or clarification to the existing labour legislations are yet to be announced to accommodate the changes caused in employment conditions due to COVID-19. For instance, it is unclear what will be the impact on an Occupier’s responsibilities under Factories Act where a factory’s operations are allowed to be continued. We are continuously monitoring the situation, and shall circulate an updated TN specific alert as necessary.


Sowmya M.

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