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Workers' Rights in Times of Crisis: Gujarat Mazdoor Sabha v/s State of Gujarat

The Factories Act, 1948 was enacted to consolidate and amend the laws regulating labour in factories where such is expedient. Every labour legislation aims to protect workers from exploitation by the employer, bestowing certain rights upon the workers. The unanticipated Covid-19 pandemic threw the economy for a loop especially the daily wage workers or Mazdoors resulting in their loss of consistent wages owing to the imposed lockdown. The current case deals with the rights of mazdoor affected by the notification released by the Gujarat government during the pandemic period.

Facts of the Case
The Indian economy suffered a huge blowout because of Covid-19 and continued nationwide lockdown. In response, the Gujarat Government issued a notification dated April 17, 2020, under Section 5 of The Factories Act, 1948, exempting registered factories from provisions relating to humane working conditions and adequate compensation for overtime, etc making significant departures from the mandate of the 1948 Act.

Section 5 of the Act provides that in a public emergency, the State Government can exempt any factory or class or description of factories from all or any of the provisions of the Act, except Section 67. The existence of a public emergency is a prerequisite to the exercise of the power which is not left to the subjective satisfaction of the State Government but must be demonstrated as an objective fact.

The Explanation appended to Section 5 of the Factories Act, 148 defines a public emergency as a grave emergency that threatens the security of India or any part thereof, on account of war, external aggression, or internal disturbance.

The notification exempted all classes of factories from complying with the specific provision relating to weekly hours, daily hours, intervals of rest, etc. for adult workers under various provisions of the Act. Additionally, it revised working conditions. It was applicable from April 20, 2020, till July 19, 2020. On its lapse by efflux of time, a new notification was issued on July 20, 2020, extending the granted exemption.

The Gujarat Mazdoor Sabha, a trade union with a state-wide presence, and the Trade Union Centre of India, a trade union with a national presence filed a petition challenging the constitutional validity of the above-mentioned notifications.

  1. Whether the impugned notification(s) is ultra vires to the powers given under the Factories Act, 1948, and whether they are constitutionally valid?
  2. Whether the economic crisis caused due to the pandemic and resultant lockdown fall within the ambit of 'public emergency' as provided in Section 5 of the Factories Act?
The Supreme Court held that the existence of a public emergency is a prerequisite for exercising power under Section 5 which is not subject to subjective satisfaction but must be proved as objective fact. Thus, a situation can qualify as a public emergency only when there exists a grave emergency that threatens the territory of India or its part thereof and it must be caused by a threat of war, external aggression, or internal disturbance. Co-relationship between cause and effect must also be established along with the inherent principle of proportionality. Internal disturbances must be of such nature as to disrupt the functioning of the constitutional order of the State by the concerned government.

The economic slowdown created by the Covid-19 pandemic does not qualify as such even though it has put a severe burden on public infrastructure and economic activities. It has not affected the security of India or any of its parts. Hence, the recourse to emergency powers is unjustified.

On the issue of adequate compensation for overtime, etc. in the wake of the outbreak of Covid- 19 and on grounds of financial stringency, the Supreme Court held that the financial losses cannot be offset on the weary shoulder of labouring worker, who provides the backbone of the economy. The State Government cannot issue a blanket notification under Section 5 exempting all factories to comply with humane working conditions and adequate compensation for overtime as a response to the pandemic that did not meet the prerequisites.

The Apex Court quashed the impugned notifications and further ordered, under Article 142 of the Constitution of India, to do complete justice, overtime wages to all eligible workers who have worked since the issuance of notifications.

The Court remarked that the right to life guaranteed to every person under Article 21 of the Constitution of India, which includes a worker, would be devoid of an equal opportunity at social and economic freedom in the absence of just and humane conditions of work.

Relevant Cases:
  1. K.S. Puttaswamy v. Union of India 1:
    The proclamation of emergency cannot be issued on a mere internal disturbance and must reach the threshold of an armed rebellion threatening the security of India. The expression internal disturbance finds a place in Article 352, and Article 355 of the Constitution as well.
  2. Naga People's Movement of Human Rights v. Union of India 2:
    The expression internal disturbance must be interpreted in the context in which it is used. Thus, the internal disturbance must threaten the security of India and to sustain the valid exercise of power on the ground of internal disturbance, it must be of such a nature to disrupt the functioning of the constitutional order of the State. In other words, the Government cannot be carried on as per the Constitution. Sarkaria Commission clarified that mere financial exigencies of the State do not qualify as an internal disturbance.
  3. Anuradha Bhasin v. Union of India 4:
    A line must be drawn between, the security of India and public order, those serious and aggravated forms of public disorder which are calculated to endanger the security of the State, and the relatively minor breaches of the peace of a purely local significance.
  4. Ram Manohar Lohia v. State of Bihar 5:
    The Supreme Court demarcated the difference between law and order, public order, and security of the State. It was held that just as public order comprehended disorders of less gravity than those affecting the security of the state, law, and order also comprehend disorders of less gravity than those affecting public order.

The Supreme Court quashed the notification and upheld the rights of the labourers with feeble bargaining powers and the inherent power of collective bargaining through the formation of trade unions. It recognized the right of the labourers as an essential constitutional vision and reiterated that the Factories Act being a socialist legislation cannot be misused by the whim of the government. It also set a remarkable precedent as to the limitation on the use of the public emergency so that the pandemic cannot be used as an excuse to shift the economic burden to the poorest and that the legislation is not misused by employers.

  • (2017) 10 SCC 1.
  • 2 (1998) 2 SCC 109.
  • S.R. Bommai v. Union of India, (1994) 3 SCC 1; Extra-Judicial Execution Victim Families Assn. v. Union of India, (2016) 14 SCC 536.
  • (2020) 3 SCC 637.
  • AIR 1976 SC 740.

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