While the deadly COVID -19 has affected the world, health and economy wise, it has also made a dramatic change in the life of a General Counsel. As we know that the role of a General Counsel in an organization has gone through a paradigm shift in the past few years. Owing to the pandemic situation, it has made the General Counsel and the Legal team a very important and integral part in the day-to-day affairs of business. One could hear from all functions, may it be procurement, admin, business/ vertical, human resource, IT, IA etc., calling out for guidance/advice on ‘What’ and ‘How’, the organization or their function should move. It is now become the responsibility of this (Legal & Compliance) function to balance between the key issue that has arisen before the management and boards of companies in India ‘managing cash flow’ versus Compliance.

Besides, the plague has hit the economy badly, but on the positives, we have seen extensive growth and utilization of digital platforms. From a legal perspective, we see more adoption of technology, may it be electronic signing of a legal document or negotiating a contract through virtual media. While it is the need of the hour, it is indeed a great step towards modernization. Working dynamics have changed, where companies and employees have embraced work from home and will potentially continue to be the normal henceforth. * electronic signatures as long as it meets the specifications stipulated under the Information Technology Act 2002, is accepted and is valid under law.

Alongside, the outbreak has compelled establishments / industries to slow down and that the government had imposed complete lockdown, as a result, the employees are either compelled to work from home or not able to attend to their duties. This has drawn new governances to the existing legal framework, which seem to have overriding effects.

Changes to the legal landscape are seen through circulars and notifications under the Epidemic Act, Disaster Management Act – DMA etc, relaxing existing processes or mandating fresh guidelines in order to contain the disaster or incidentals thereto. To quote the DMA/MHA notification, with the economic slowdown, it was required by the employers not to reduce wages or terminate employees during this period (54 days of lockdown). States had also followed issuing similar guidelines.

Even though it was relaxed with the introduction of the revised guidelines on May 19th, there were already questions raised on the constitutional validity of the circulars or adherence to such circulars. The Hon’ble Supreme Court, while hearing a series of matters in this regard have in the interim, directed the employers who are willing to enter into negotiation and settlement with the workers/employees regarding payment of wages for the period (54 days) which the establishment was closed due to lockdown. To my view, this is in the larger interest of maintaining equilibrium and should avoid further intricacy and complications. Further, as parallel support, government (Central/State) has relaxed various deadlines, provided extensions for filings under Tax (Direct & Indirect), Employment etc, including returns under ESIC, PF, Companies Act or extension of due dates for contributions, extension to operate 12 hours etc. As benefits it had offered – withdrawal of PF (3 months wages or 75% of the members fund, whichever is lower), paying EPF contribution of certain companies (<100 employees) and has reduced minimum PF contribution to 10% instead of 12% for 3 months apart from economic stimulus measures through and around liquidity, relief for MSMEs, NBFCs, Power, IBC, Immigration, Imports etc. While these certainly help, organizations expect greater reliefs from the government for its sustenance, either through tax rebates or such other benefits for being part of such valiant support.

We all expect this to phase out, but in an exacerbated situation, and with the above mandate / conditions continuing, it is a question of existence for many businesses. Therefore, during this time, it is also imminent for the government (central/state) to prescribe a rescue mechanism that helps revive the broken economy.