Gujarat Mazdoor Sabha & Anr. vs The State of Gujarat

10.5 hours; (iv) enable an interval of rest every 6 hours, as opposed to 5 hours; and (iv) mandate the payment of overtime wages at a rate proportionate to the ordinary rate of wages, instead of overtime wages at the rate of double the ordinary rate of wages as provided u/s.59 – The notifications legitimize the subjection of workers to onerous working condiditions at a time when their feeble bargaining power stands whittled by the pandemic – Clothed with exceptional powers u/s.5, the State cannot permit workers to be exploited in a manner that renders the hard-won protections of the Factories Act illusory – Therefore, the notifications dated 17.04.2020 and 20.07.2020 are quashed and the overtime wages of all the eligible workers are directed to be paid, in accordance with the provisions of s.59 of the Factories Act who were working since the issuance of the notifications.

The Factories Act, 1948 – Scheme and objects – discussed. Labour Law – Labour welfare – Social and Economic Value of ‘Overtime’ – discussed.

Labour Law – Constitution of India – Constitution vision of social and economic democracy – discussed.

Allowing the Writ Petition, the Court

HELD: 1. The power under Section 5 of the Factories Act can be exercised in a “public emergency”. The explanation states that to constitute a public emergency, there must be a grave emergency. The emergency must be of such a nature as to threaten the security of India or a part of its territory. The threat to the security of India or a part of the territory must be caused by war, external aggression or an internal disturbance. The expression ‘internal disturbance’ cannot be divorced from its context, or be read in a manner divorced from the other two expressions which precede it. They are indicative of the gravity of the cause which threatens the security of India or a part of its territory. An internal disturbance must be of a similar gravity. Further, it is necessary to evaluate whether a situation of internal disturbance threatens the security of India, or a part of its territory to qualify as a ‘public emergency’. In the absence of any one or more of the constituent elements, the conditions requisite for the exercise of statutory power will not exist. [Para 19][906-C-E]

2. Even if this Court accepts the Respondent’s argument at its highest, that the pandemic has resulted in an internal disturbance, this Court finds that the economic slowdown created by the COVID-19 pandemic does not qualify as an internal disturbance threatening the security of the state. The pandemic has put a severe burden on existing, particularly public health, infrastructure and has led to a sharp decline in economic activities. The Union Government has taken recourse to the provisions of the Disaster Management Act, 2005. However, it has not affected the security of India, or of a part of its territory in a manner that disturbs the peace and integrity of the country. The economic hardships caused by COVID–19 certainly pose unprecedented challenges to governance. However, such challenges are to be resolved by the State Governments within the domain of their functioning under the law, in coordination with the Central Government. Unless the threshold of an economic hardship is so extreme that it leads to disruption of public order and threatens the security of India or of a part of its territory, recourse cannot be taken to such emergency powers which are to be used sparingly under the law. Recourse can be taken to them only when the conditions requisite for a valid exercise of statutory power exist under Section 5. That is absent in the present case. [Para 28] [910-F-H; 911-A-B]

3. The Factories Act, as it currently stands, was enacted to guarantee occupational health and safety. It ensures the material and physical well-being of workers by fastening responsibilities and liabilities on ‘occupiers’ of factories. As a legislative recognition of the inequality in the material bargaining power between workers and their employers, the Act is meant to serve as a bulwark against harsh and oppressive working conditions. The Act, primarily applies to establishments employing more than

10 persons. It has been purposively and expansively applied to workers, who may not strictly fall within the purview of the definition, and yet embody similar roles within the establishments. These permissible interpretations have been aligned with the intention of the legislature which has a vital concern in preventing exploitation of labour. [Para 30][912-D-F]

4. The notifications in question, besides specifically exempting all factories from the applicability of Sections 51, 54,

55 and 56, effectively override Section 59 of the Factories Act. The above provisions form a part of Chapter VI which prescribes the ‘Working Hours of Adults’. The Chapter, broadly concerned with worker productivity and fair remuneration, prescribes working hours, mandatory days of rest, intervals between stretches of work and adequate compensation for overtime. The notifications, putatively, are a response to the COVID-19 pandemic and exempt all factories from the provisions of Sections 51, 54, 55 and 56. [Para 31][912-F-H]

5. The notifications make significant departures from the mandate of the Factories Act. They (i) increase the daily limit of working hours from 9 hours to 12 hours; (ii) increase the weekly work limit from 48 hours to 72 hours, which translates into 12 hour work-days on 6 days of the week; (iii) negate the spread over of time at work including rest hours, which is typically fixed at 10.5 hours; (iv) enable an interval of rest every 6 hours, as opposed to 5 hours; and (iv) mandate the payment of overtime wages at a rate proportionate to the ordinary rate of wages, instead of overtime wages at the rate of double the ordinary rate of wages as provided under Section 59. [Para 33][914-B-D]

6. The impugned notifications do not serve any purpose, apart from reducing the overhead costs of all factories in the State, without regard to the nature of their manufactured products. It would be fathomable, and within the realm of reasonable possibility during a pandemic, if the factories producing medical equipment such as life-saving drugs, personal protective equipment or sanitisers, would be exempted by way of Section 65(2), while justly compensating the workers for supplying their valuable labour in a time of urgent need. However, a blanket notification of exemption to all factories, irrespective of the manufactured product, while denying overtime to the workers, is indicative of the intention to capitalize on the pandemic to force an already worn-down class of society, into the chains of servitude. [Para 36][915-A-C]

7. The expression ‘worker’ as defined in the Factories Act, is broad enough to include persons who are indirectly employed as contract labour and contribute to the manufacturing process at the establishment. The COVID-19 pandemic in India, was accompanied with an immense migrant worker crisis, where several workers (including workers employed or contracted with factories) were forced to abandon their cities of work due to the halt in production which cut-off their meagre source of income. The notifications in question legitimize the subjection of workers to onerous working conditions at a time when their feeble bargaining power stands whittled by the pandemic. Clothed with exceptional powers under Section 5, the state cannot permit workers to be exploited in a manner that renders the hard-won protections of the Factories Act, 1948 illusory and the constitutional promise of social and economic democracy into paper-tigers. It is ironical that this result should ensue at a time when the state must ensure their welfare. [Para 43][921-B-C; 922-A-B]

8. This Court is cognizant that the Respondent aimed to ameliorate the financial exigencies that were caused due to the pandemic and the subsequent lockdown. However, financial losses cannot be offset on the weary shoulders of the laboring worker, who provides the backbone of the economy. Section 5 of the Factories Act could not have been invoked to issue a blanket notification that exempted all factories from complying with humane working conditions and adequate compensation for overtime, as a response to a pandemic that did not result in an ‘internal disturbance’ of a nature that posed a ‘grave emergency’ whereby the security of India is threatened. In any event, no factory/ classes of factories could have been exempted from compliance with provisions of the Factories Act, unless an ‘internal disturbance’ causes a grave emergency that threatens the security of the state, so as to constitute a ‘public emergency’ within the meaning of Section 5 of the Factories Act. [Para 45][924-C-E] K S Puttaswamy v. Union of India (2017) 10 SCC

1 : [2017]10 SCR 569 ; S R Bommai v. Union of India [1994] 2 SCR 644; Romesh Thapar v. State of Madras [1950] 1 SCR 594; Bhikusa Yamasa Kshatriya (P) Ltd. v. Union of India AIR 1963 SC 1591:[1964] SCR 860 – followed.

Extra-Judicial Execution Victim Families Association v. Union of India (2016) 14 SCC 578 : [2016] 4 SCR 909; Ram Manohar Lohia v. State of Bihar AIR 1966 SC

740 : [1966] SCR 709 ; S M Datta v. State of Gujarat (2001) 7 SCC 659 : [2001] 2 Suppl. SCR 140 ; Y A Mamarde v. Authority under the Minimum Wages Act (1972) 2 SCC 108: [1973] 1 SCR 161 – relied on. Anuradha Bhasin v. Union of India (2020) 3 SCC 637; Pfizer Private Limited, Bombay v. Workmen AIR 1963 SC 1103 : [1963] Suppl. SCR 627 ; National Thermal Power Co-operation v. Karri Pothuraju (2003) 7 SCC

384 : [2003] 2 Suppl. SCR 426 ; Barat Fritz Werner Ltd. v. State of Karnataka, (2001) 4 SCC 498 : [2001]

1 SCR 835 ; State of Madras v. V G Row AIR 1952 SC

196 : [1952] SCR 597 – referred to.

I.T.C. Ltd. v. Regional Provident Fund Commissioner ILR (1988) 1 P&H 73; Hindustan Machine Tools Ltd. v. Labour Court (1994) 1 LLN 256 – referred to.

Sarkaria Commission on Centre-State Relations (January 1988); Dr B R Ambedkar, Constituent Assembly Debates, Volume 7 on November 19, 1948 – referred to.