Listen to this articleGujarat
Mazdoor Sabha v. The State of Gujarat
Writ Petition (Civil) No. 708 of 2020 decided on October
1, 2020
Bench:
Dr. Dhananjaya Y Chandrachud, Indu Malhotra, K M Joseph, JJ.
Facts:
Invoking its powers under
Section 5 of the Factories Act, 1948, the State of Gujarat has exempted
factories from observing some of the obligations which employers have to fulfil
towards the workmen employed by them. According to the notification, all
factories registered under the Act were exempted “from various provisions
relating to weekly hours, daily hours, intervals for rest etc. for adult
workers”. The notification extended the exemption granted to factories till 19
October 2020.
[Ingredients of
Notification:
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.]
Issue:
Whether the notifications
fall within the ambit of the power conferred by Section 5 of the Factories Act
and whether COVID-19 pandemic and the nationwide lockdown qualify as a ‘public
emergency’ as defined in Section 5?
Argument Advanced
|
Petitioner |
Respondent |
|
(i) Section 5 of the Factories Act enables
government to exempt any factory, or a class of factories, from its
provisions only when a ‘public emergency’ exists; (ii) The explanation to Section 5 defines the
expression ‘public emergency’ as a “grave emergency” which threatens the
security of India or of any part of the territory by war, external aggression
or internal disturbance. Applying the interpretative principle of noscitur a
sociis, the expression ‘internal disturbance’ will have a meaning which
derives content from ‘war’ and ‘external aggression’ which endangers the
security of India and would not include a pandemic or a lockdown; (iii) Though both Section 5 and the provisions of
Article 352 of the Constitution (prior to its amendment in 1978) contain a
reference to the expression ‘internal disturbance’, there is a crucial
difference. Art 352 was premised on the satisfaction of the President while
the power under Section 5 can be exercised only upon the objective existence
of the conditions prescribed; (iv) Even if a threat to the security of India
were to exist as an objective fact, the notifications must, to be valid,
ameliorate the threat; |
(i) The State has issued the notifications by
invoking its powers under Section 5 of the Factories Act, under which it may
exempt any factory or class of factories from all or any provisions of the
Act in a public emergency; (ii) The
COVID-19 pandemic is a ‘public emergency’ as defined in Section 5 of the
Factories Act. It has disturbed the “social order of the country” and has
threatened the even tempo of life in the State of Gujarat as well. As a
result of the outbreak, emergency measures were required to be adopted to
protect the existence and integrity of the State of Gujarat; (iii) The COVID-19 pandemic has caused “extreme
financial exigencies” in the State. The lockdown caused a slowdown in
economic activities, leading to an ‘internal disturbance’ in the State within
the meaning of Section 5. The State temporarily exempted factories and
establishments from the operation of labour laws such as the Factories Act to
overcome the financial crisis and to protect factories and establishments; (iv) The notifications do not violate Section 59
of the Factories Act as they impose the condition of payment of wages for
overtime work in proportion to the existing wages; (v) Section 5 of the Factories Act confers the
power of exemption to the State Government to exempt any factory or class of
factories from its provisions. The State Government has the prerogative to
determine whether all or only a class or description of factories were to be
exempted. Listing of all classes of factories would have been an unnecessary
exercise; |
Held:
The Court quashing the
impugned notification said that 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. Furthermore, the Supreme court in the interest
of doing complete justice under Article 142 of the Constitution, directed that
overtime wages shall be paid, in accordance with the provisions of Section 59
of the Factories Act to all eligible workers who have been working since the
issuance of the notifications.
View of Supreme Court on
Notification
The Supreme Court said
that 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. Furthermore, 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
View on Section 5
Section 5 specifies (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. An exemption can be
granted “in any case of public emergency”. The existence of a public emergency
is a pre-requisite to the exercise of the power. Whether there exists a public
emergency is not left to the subjective satisfaction of the state government.
The absence of the expression “subjective satisfaction” in Section 5 is
crucial. The existence of a public emergency must hence be demonstrated as an
objective fact, when its existence is questioned in a challenge to the exercise
of the power.
Meaning of Public
Emergency
Under Section 5, a
situation can qualify as a ‘public emergency’, only if the following elements
are satisfied: (i) there must exist a “grave emergency”; (ii) the security of
India or of any part of its territory must be “threatened” by such an
emergency; and (iii) the cause of the threat must be war, external aggression
or internal disturbance. The existence of the situation must be demonstrated as
an objective fact. The co-relationship between the cause and effect must exist.
On principle of
Proportionality
The principle of
proportionality has been recognized in a slew of cases by this Court, most
notably in the seven-judge bench decision in K S Puttaswamy vs. Union of India.
The principle of
proportionality envisages an analysis of the following conditions in order to
determine the validity of state action that could impinge on fundamental
rights:
(i) A law interfering
with fundamental rights must be in pursuance of a legitimate state aim;
(ii) The justification
for rights-infringing measures that interfere with or limit the exercise of
fundamental rights and liberties must be based on the existence of a rational
connection between those measures, the situation in fact and the object sought
to be achieved;
(iii) The measures must
be necessary to achieve the object and must not infringe rights to an extent
greater than is necessary to fulfil the aim;
(iv) Restrictions must
not only serve legitimate purposes; they must also be necessary to protect
them; and
(v) The State should
provide sufficient safeguards against the abuse of such interference.
[Section 5 is extracted
below:
5. 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.]