‘Shutdown’ fuels uncertainty over pay cut in retail sector

Vijay C Roy

Tribune News Service

Chandigarh, March 19

With many of the sectors experiencing shutdown in the region till March 31 due to the coronavirus outbreak, business is not as usual, especially for the services sector. Sources said many of the businesses are contemplating salary cuts for their staff or adjusting it against their earned leave. In tourism and hospitality sector, some of the players have already resorted to laying off staff while others have asked the sales force to go on forced leave.

“Many of the night clubs, lounges and retail outlets have been closed till March 31. In such a scenario, it will be difficult to pay full salary to employees. Businesses are contemplating several options, including salary cut or adjusting it against earned leave,” said sources.

“A majority of them are in the MSME category. They can’t afford to pay full salary to their employees when their businesses are shut. Even retail shop owners in shopping malls and multiplexes are negotiating rentals with mall owners for the lockdown period,” insiders said.

Even in restaurants which are open, the footfall has declined by 60%. “If the shutdown stretches beyond a month, we may not be able to keep our staff,” said a restaurant owner on the condition of anonymity.

As a result, employees in the region are apprehensive whether they would get their salary by the end of this month or not. “In the retail sector, specially in malls and multiplexes, rumours are doing the rounds that salary to staff will not be paid in full. Even senior managements are clueless. We are keeping our fingers crossed,” said an employee working in a multiplex. Sources said a consultancy firm has told its employees it can pay only one-third of the salary to those who are working from home. A technical institute is also planning to negotiate salary with contractual employees.

Many of the smaller tour operators and hotel owners have already cut down their manpower. Some establishments have also asked their staff to proceed on long leave.

Sectors such as tourism, aviation, and hospitality have already faced the brunt of travel, assembly and activity curbs imposed by the governments across the country.

Already hit hard by the coronavirus, budget carrier IndiGo today announced it would cut salaries of its senior employees. With precipitous drop in revenue, the very survival of the airline industry is at stake.