-By Ms. Kasturi Ritika (Adv.) and Mr. Shourajeet Chakravarty (Adv.).
Gujarat Mazdoor Sabha & Anr. v. The State of Gujarat**
(Writ Petition (Civil) No. 708 of 2020)
Coram: D.Y. Chandrachud, Indu Malhotra and K.M. Joseph
Date of Judgment: October 01, 2020
As a reaction to the Coronavirus pandemic (COVID-19) and the consequential economic crisis caused due to the absolute halt of all financial and economic activities, the Labour and Employment Department of the State of Gujarat (“Labour Department”) found it prudent to exercise the power provided to it under Section 5 of the Factories Act, 1948 (“Factories Act”). Exercising the aforesaid power, the Labour Department issued a notification dated April 17, 2020 in which it exempted all factories (registered under the Factories Act in the State of Gujarat) from complying with the provisions of “weekly hours, daily hours, intervals for rest etc. for adult workers” as provided under Sections 51, 54, 55 and 56 of the Factories Act from April 20, 2020 till July 19, 2020 and further prescribed revised working conditions to be applicable during the said period. Subsequently, upon the lapse of the aforementioned notification by the efflux of time, the Labour Department issued a new notification dated July 20, 2020 which was similar in content and extended the exemption granted to the factories from July 20, 2020 till October 19, 2020.
Aggrieved by the said notifications and the stringent working conditions prescribed by the Labor Department, Gujarat Mazdoor Sabha, a trade union registered under the Trade Unions Act, 1926 representing about 10,000 (ten thousand) workers employed in factories and industrial establishments in the State of Gujarat; and Trade Union Centre of India, a federation of registered trade unions representing about 100,000 (hundred thousand) workmen in factories and establishments across India, filed Writ Petition (Civil) No. 708 of 2020 invoking the jurisdiction of the Hon’ble Supreme Court of India (“Supreme Court”) under Article 32 of the Constitution of India, 1950 (“Constitution”).
1: Whether the economic and financial crisis caused as a consequence of the nationwide lockdown due to Covid-19 falls within the ambit of a ‘public emergency’ as provided in Section 5 of the Factories Act?
2: Whether the notifications of the Labour Department issued on April 17, 2020 and July 20, 2020, is ultra vires of the power conferred by Section 5 of the Factories Act, 1948?
The Hon’ble Supreme Court while deliberating over the aforesaid issues noted that the Factories Act was primarily enacted to protect the interest of workers and to ensure a dignified life for them. The Factories Act as stated by the Hon’ble Supreme Court was framed with an intention “to serve as a bulwark against harsh and oppressive working conditions” and upholds the vision of the drafting committee and reflects the intent discussed under the Directive Principle of State Policy of the Constitution.
The Hon’ble Court observed that Section 5 of the Factories Act empowers the State Governments to exempt any factory, class or description of factories from all or any of the provisions of the Act, except Section 67 when a ‘public emergency’ situation emerges. The Hon’ble Court further observed that the Factories Act specifically provides for: “(i) when an exemption can be granted; (ii) who can exercise the power to grant an exemption; (iii) who can be exempted; (iv) the conditions subject to which an exemption can be granted; (iv) the provisions from which an exemption can be allowed; (v) the period of time over which the exemption may operate; and (vi) the manner in which the exemption has to be notified.”
The existence of a ‘public emergency’ is a sine qua non to the exercise of the power under Section 5 of the Factories Act. As per the explanation to Section 5 of the Factories Act, a public emergency has to be a grave emergency whereby the security of India or of any part of the territory thereof is threatened either by (i) war; (ii) external aggression; or (iii) internal disturbance.
Thus, as per the Hon’ble Court’s observation: The existence of a ‘public emergency’ is not left to the subjective satisfaction of the state governments but can only be construed in situations where a ‘war’, ‘external aggression’ or ‘internal disturbance’ causes a grave emergency that threatens the security of the State and therefore, the powers provided under Section 5 of the Factories Act can only be exercised (i) on the existence of such ‘public emergency’ and (ii) the existence of a link between the same emergency and the exemption so provided.
As per the Labour Department, the COVID-19 pandemic can be constituted as an internal disturbance under Section 5 of the Factories Act thus empowering the Labour Department to exercise the powers under Section 5 of the Factories Act to grant the impugned exemptions. To understand what constitutes an ‘ínternal disturbance’, the Hon’ble Court discussed various precedents in which its meaning and ambit have been discussed. The term ‘ínternal disturbance’ has been provided under Article 355 of the Constitution, however, the Hon’ble Supreme Court observed that a State emergency under Article 355 of the Constitution can be exercised only when there is a failure in the functioning of the constitutional order of the State as provided under Article 356 of the Constitution.
The Hon’ble Supreme Court held that even though the pandemic caused great economic hardships, such hardships are not in any way threatening the security of India or any parts of its territories and thus, the COVID-19 pandemic does not qualify as a ‘public emergency’ within the meaning of Section 5 of the Factories Act as no ‘ínternal disturbance’ which threatens the security of the State can be made out.
As for the second issue, the Hon’ble Supreme Court held that: “...To a worker who has faced the brunt of the pandemic and is currently laboring in a workplace without the luxury of physical distancing, economic dignity based on the rights available under the statute is the least that this Court can ensure them. Justice Patanjali Sastry immortalized that phrase of this court as the sentinel on the qui vive in our jurisprudence by recognizing it in State of Madras vs. V G Row.” Hence, the notification of the Labour Department was quashed and the Hon’ble Court further exercised their powers under Article 142 of the Constitution, to direct payment of overtime wages, in accordance with the provisions of the Factories Act to all the workers who have continued working in the conditions provided since the issuance of the impugned notifications.
The Factories Act had been enacted as a socialist legislation not to regulate the conduct of the workers and labourers but to recognize the duties of employers and basic rights of the workers and labourers. These rights include favourable working conditions, equitable remuneration qua the hours of work put in, maximum amount of hours one can be worked, adequate rests and leaves, overtime wages as well as timely payment of wages. The Factories Act mandates the factory owners to adhere to the minimum requirements of the conditions of work so as to ensure that the rights of the labourers and workers are not infringed.
The impugned notifications were ultra-vires the Factories Act as the Labour Department could not satisfy the existence of a ‘public emergency’ as required under the Factories Act and could not justify the blanket exemption issued by them. Thus, the aforesaid notifications were not only not serving the purpose set out in the statute but were merely trying to provide a blanket exemption to the factories and other establishments to recover the lost hours by denying overtime payment to the workers, and trying to capitalise on the plight of the workers. Hence, the notifications were rightly quashed by the Hon’ble Supreme Court.
**Case Analysis by Ms. Kasturi Ritika (Adv.) and Mr. Shourajeet Chakravarty (Adv.). Power to exempt during public emergency- In any case of public emergency the State Government may, by notification in the Official Gazette, exempt any factory or class or description of factories from all or any of the provisions of this Act except section 67 for such period and subject to such conditions as it may think fit: Provided that no such notification shall be made for a period exceeding three months at a time. Explanation- For the purposes of this section “public emergency” means a grave emergency whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance. See at https://prsindia.org/files/covid19/notifications/3373.GJ_Lockdown_Relaxations_Factories_Apr%2017.pdf last visited on October 10, 2020.
Weekly hours - No adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week. Daily hours - Subject to the provisions of Section 51, no adult worker shall be required or allowed to work in a factory for more than nine hours in any day: Provided that, subject to the previous approval of the Chief Inspector, the daily maximum hours specified in this section may be exceeded in order to facilitate the change of shifts. Intervals for rest- (1) The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours and that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour. (2) The State Government or, subject to the control of the State Government, the Chief Inspector, may, by written order and for the reasons specified therein, exempt any factory from the provisions of sub-section (1) so however that the total number of hours worked by a worker without an interval does not exceed six. Spreadover- The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest under Section 55, they shall not spreadover more than ten and a half hours in any day: Provided that the Chief Inspector may, for reasons to be specified in writing, increase the spreadover up to twelve hours. See at https://www.labour.gujarat.gov.in/Portal/News/525_1_factories_act.pdf last visited on October 10, 2020. Duty of the Union to protect States against external aggression and internal disturbance: It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the Government of every State is carried on in accordance with the provisions of this Constitution. Provisions in case of failure of constitutional machinery in States: (1) If the President, on receipt of a report from the Governor of a State or otherwise, is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the President may by Proclamation- (a) assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by the Governor or any body or authority in the State other than the Legislature of the State; (b) declare that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament; (c) make such incidental and consequential provisions as appear to the President to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provisions of this Constitution relating to any body or authority in the State.