Introduction
The three judge bench of the Supreme Court comprising of Justice D Y Chandrachud, Justice Indu Malhotra and Justice K M Joseph, passed a significant judgment in Gujarat Mazdoor Sabha v. The State of Gujarat, which has surprisingly received little public attention. The Court in this case, quashed two notifications of the Gujarat government, which, issued under Section 5 of the Factories Act, 1948, sought to exempt all factories registered under the Act from various provisions relating to weekly hours, daily hours, intervals for rest etc. for adult workers.
In deciding on the validity of the notifications, the Court examined the meaning of ‘public emergency’ and held, that the pandemic and the economic loss caused by the lockdown do not constitute public emergency of the nature that can justify sweeping deviations from basic labour rights. The judgment therefore, holds significance not only for labour rights but also acts as a bulwark against dangerous incursions into Fundamental Rights that the government is making in the name of the pandemic.
The Impugned Notifications under the Factories Act: The Assault on Labour Protections
The pandemic, but more importantly the lockdown, has been particularly harsh for workers. The exodus of migrants all across the country was a woeful testament to precarious conditions that dictate the life of workers today. With an economic slowdown impending, the woes of the working class are only going to get deeper. However, instead of ameliorating their plight, the State has tried to convert this pandemic into an opportunity. The Central and state governments have used the pandemic to push unpopular labour reforms without public discussion or debate. One such measure that speaks to the disposition of the government consisted of the notifications that were the subject matter of Gujarat Mazdoor Sabha.
Invoking its powers under Section 5 of the Factories Act, 1948, the State of Gujarat issued a notification exempting all factories registered under the Act from obligations mandated under Section 51, 54, 55 and 56 of the Act from 20th April till 19th October, 2020. The provisions, whose application the notification sought to exempt industries from, read:
“(1) No adult worker shall be allowed or required to work in a factory for more than twelve hours in any day and Seventy Two hours in any week.
(2) The Periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed six hours and that no worker shall work for more than six hours before he has had an interval of rest of at least half an hour.
(3) No Female workers shall be allowed or required to work in a factory between 7:00 PM to 6:00 AM.
(4) Wages shall be in a proportion of the existing wages (e.g. If wages for eight hours are 80 Rupees, then proportionate wages for twelve hours will be 120 Rupees).”
The purpose underlying the notification was to enable employers to overcome the ‘extreme financial exigencies’ caused by the pandemic in the State by temporarily exempting factories and establishments from the operation of labour laws such as the Factories Act. The State argued that the lockdown had caused severe slowdown in economic activities, disturbing the ‘social order of the country’ and had threatened the tempo of life in the state. As a result, emergency provisions were required to be adopted to protect the existence and integrity of Gujarat. Hence, it constituted a ‘public emergency’ under Section 5 of the Factories Act and enabled the government to exempt any factory or a class of factories from the application of the provision of the Act.
The notification assumes the employers as the primary engines of growth who will see the country through these difficult times and hence, need to be fed and fired at all costs. In other words, their welfare is India’s welfare. In stark contrast, in its one-sided imagination, workers are mere pegs in the system, ‘soldiers’ who can be called upon to perform their duties for the nation without expectation of personal gain or compensation.
The Supreme Court in striking down this notification has examined and reiterated the parameters of ‘public emergency’ and has demarcated the extent to which the State can dilute existing labour laws to meet the current crisis.
Is the Pandemic a ‘Public Emergency’?
Section 5 of the Factories Act, under which the notification was issued, reads as follows:
“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.”
Hence, the matter that came before the Supreme Court was the interpretation of the expression “public emergency” as its existence is a prerequisite to the exercise of power under this provision. In determining whether there exists a public emergency or not, the Court held that it is not left to the subjective satisfaction of the state government and that “the existence of a public emergency must be demonstrated as an objective fact” (para 8).
To qualify as a ‘public emergency’, the court held that the following elements must be 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” (para 9).
The ‘public emergency’ exception in law necessarily has to be read as strictly as possible because its invocation gives wide powers to the State to restrict individual freedoms which would otherwise be considered unconstitutional.[1] Therefore, the actions that are permitted to meet the emergency should necessarily satisfy the twin tests of necessity (i.e. that measure is necessary to meet the emergency) and proportionality (i.e. the actions taken has to be proportionate to the task it is trying to achieve – one can’t fire a canon to kill a fly).[2] This is well recognized in Indian constitutional law and human rights. Although these standards are not spelt out in the Act explicitly, the Court, read them into the provision, stating, “The co-relationship between the cause and effect must exist. Implicitly therefore, the statutory provision incorporates the principle of proportionality” (para 8).
Applying the judicial interpretation of ‘emergency’, ‘internal disturbance’ and ‘security of India’ as laid down in various judgments of the Supreme Court to the interpretation of Section 5 of the Factories Act, the Court held that the power conferred under the section can be exercised only in cases of grave emergency of the kind that threatens the security of the state, such as war, external aggression or internal disturbance, and not in any other circumstances. (para 22).
Coming to the question of whether the pandemic and the following lockdown constitute a public emergency, the Court held that, even if pandemic could be said to have caused an internal disturbance in light of the mass migration and the economic slowdown following the lockdown, it did not constitute an internal disturbance in a manner that disturbs the peace and integrity of the country. While recognising that the pandemic had unleashed grave challenges to governance, the Court observed that such challenges have to be met within the ordinary legal, administrative and political functions of the Central and State governments. Emergency powers can be invoked only in extreme circumstances when the economic hardship is of such a severe nature as to disrupt public order and threaten the security of India. (para 28).
This observation holds significance beyond this particular case. In laying down that the pandemic and the economic situation resulting from the lockdown do not qualify as a public emergency, the Court has provided a much-needed check on the manner in which the government can use its powers during this pandemic and in its name. The government has repeatedly passed several executive orders curtailing civil liberties over the past few months. Some are, of course, essential. For instance, orders prohibiting large gatherings, closing down certain public places, schools, colleges etc. However, it has also used its executive powers to curb protests, arrested civil rights activists and scholars in a scenario when civil action and protests cannot take place, imposing heavy fines for minor deviations, etc. What makes its argument of public safety questionable is the fact that, while it puts the aforementioned restrictions in place in the name of the pandemic, it allows temples to open, election rallies to take place, malls and other commercial activities to resume. Such selective response to the pandemic does not inspire confidence in state action.
The argument of classifying the economic distress that resulted from the lockdown as a public emergency is also disingenuous for another reason. The pandemic is an act of God, over which no government has any control. The lockdown, on the other hand, was an executive act, taken by the Union government after deliberation. There is no doubt that the pandemic needed swift and decisive response, but to choose to impose, at the first instance, the harshest lockdown anywhere in the world, practically ceasing all economic activity in one of the world’s biggest and poorest economies, without notice, preparation or foresight, was a political choice that the state made. Hence, the state cannot take advantage of its own action. It cannot deliberately create a situation of economic emergency and simultaneously exercise extraordinary powers claiming that the country is faced with a ‘public emergency’.
Labour Protections are a Part of the Constitutional Vision
Significantly, the Court did not stop at interpreting Section 5 of the Factories Act. It also examined the purpose of the Act and held that the notification was unconstitutional in providing a blanket exemption to all factories registered under the Act from obligations mandated under Section 51, 54, 55 and 56 of the Act. Stating that the purpose of the Act was to prevent the exploitation of workers and ensure occupational health and safety, the Court also noted that it was “a legislative recognition of the inequality in the material bargaining power between workers and their employers” (para 30).
It dealt with two aspects of labour protections, hours of work and payment of overtime, both of which were the subject matters of the notification. This part of the judgment is particularly important in light of the fact that it comes at a time when the state is steadfastly remaking labour laws and diluting labour protections.
Looking at the minimum of hours of work, the Court held that it limiting the hours of work is one of the most basic protections that the law, which came as a result of a long struggle, provides against exploitation. As a consequence, calling overtime wage “a minimum endeavour of just compensation” (para 39), the Court held, “the principle of paying for overtime work at double the rate of wage is a bulwark against the severe inequity that may otherwise pervade a relationship between workers and the management.” (para 41).
While recognising that the pandemic and other situations might create circumstances in which production has to be significantly amped up in a short period of time, the Court held that, even in such a situation the needs of the combating the pandemic have to be balances against the need to protecting labour welfare, in accordance with rule of law. Therefore, the ambit of the notification to cover all factories registered under the Factories Act was found to be unreasonably expansive and consequently, could neither be argued as necessary or proportionate. In a scathing remark, the Court concluded, “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).
Conclusion
In crisis, constitutional principles and the constitutional vision do not become redundant but become even more central, if the crisis has to be resolved in a democratic, humane and just way. Constitutional protections are direly needed when faced with unpredictable threats such as the pandemic. There is no doubt that extraordinary measures may be required from the State and extraordinary sacrifices from citizens, but all these measures and sacrifices have to be done within constitutional and legal limits and in furtherance of the constitutional vision.
Labour protections under the Factories Act, as the Court rightly observed, are an integral part of the constitutional vision. It is central to the implementation of many Directive Principles of State Policy such as Articles 38, 39, 42, and 43 of the Constitution that aim to correct vast economic and political inequality between employers and workers by ensuring decent working conditions and legal protections in favour of the latter. After all, principles of ‘freedom’ and ‘equality’ enshrined in the Constitution “are but hollow aspirations if the aspiration for a dignified life can be thwarted by the immensity of economic coercion” (Para 42).
Therefore, striking down the notifications, the Court held, “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.” (para 43). This vision that that the Court has elucidated, will hopefully, not only guide the manner in which the State will protect workers during the pandemic but even otherwise.
[1] See, S R Bommai vs. Union of India [1994] 2 S.C.R 644, Extra Judicial Execution Victim Families Association v. Union of India (2016) 14 SCC 578 2, Anuradha Bhasin vs. Union of India (2020) 3 SCC 637.
[2] K S Puttaswamy vs.Union of India, (2017) 10 SCC 1.
The article has been authored by Ms. Rashmi Venkatesan, Assistant Professor at NLSIU, Bangalore. She was assisted by Ms. Jisha Garg, a student of RGNUL, Punjab. This blog is a part of RSRR’s Excerpts from Experts Series, initiated to bring forth discussion by experts on contemporary legal issues.