Court Strikes Down Gujarat’s Relaxation of the Factories Act

In light of the COVID-19 pandemic, the State of Gujarat had relaxed compliance under the Factories Act, 1948 to boost ‘industrial and commercial activities’. Among other provisions, factories were exempted from Sections 51, 54, 55, and 56 that regulated work hours and rest for factory workers.

Gujarat Mazdoor Sabha, a registered trade union, and Trade Union Centre of India, a federation of registered trade unions, moved the Supreme Court challenging the Gujarat government’s notifications under the Factories Act. One of their main arguments was that the COVID-19 pandemic could not be used as a ground to provide relaxations under the Act. Section 5 of the Act allows the government to provide exemptions or relaxations only in the case of a ‘public emergency’. The proviso to Section 5 defines a public emergency as ‘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’. The internal disturbance ground did not cover a pandemic or lockdown; instead it should be interpreted similarly to war or external aggression. Moreover, the petitioners contended that the economic justification used by the State was a smokescreen to make workers work overtime and under onerous conditions.

The State government argued that the COVID-19 pandemic was a ‘public emergency’ as it threatened the ‘social order of the country’. It also caused ‘extreme financial exigencies’ and slowdown in economic activities that led to ‘internal disturbance in the State’. The motivation behind the notifications was to ensure that factories continue to meet their regular production targets – not exceptionally high ones.

A three-judge bench of Chandrachud, Indu Malhotra and KM Joseph JJ heard this case and passed its judgment on October 1st 2020.

                                                                                                Image for representational purposes only. Photo credit: Katrin Park / International Food Policy Research Institute / 1 June, 2016

Can a Pandemic Be Considered as a ‘Public Emergency’?

The Court noted that the power to provide exemptions under Section 5 of the Act can be exercised only if the following conditions are met:

a) Presence of a ‘grave emergency’

b) The security of India must be threatened by this emergency

c) The cause of this threat must be either because of war, external aggression or internal disturbance.

The Court went on to hold that the State must objectively prove that this criterion has been fulfilled, in order to invoke the powers under Section 5. The crucial issue, in this case, was whether a pandemic or lockdowns imposed due to a pandemic constituted a ‘public emergency’.

The Court was not convinced by the State’s arguments. It held that ‘economic slowdown created by the COVID-19 pandemic does not qualify as an internal disturbance threatening the security of the State’. It also relied on the Report of Sarkaria Commission on Centre-State Relations (January 1988) to unpack the meaning of ‘internal disturbance’. Though the Report’s analysis of ‘internal disturbance’ was in the context of Articles 355 and 356, it would be insightful to use such analysis in the present case. The Report had categorically noted that ‘mere financial exigencies of a State do not qualify as an internal disturbance’.

Constitutional Mandate to Uphold Workers’ Rights

Moving on from the specific statutory issue relating to the Factories Act, 1948, the Court invoked constitutional principles. First, it relied on the Directive Principles of State Policy. The Court held that the Factories Act is an ‘integral element of the state policy which seeks to uphold’ Articles 38 (State to secure a social order for the promotion of the welfare of the people), 39 (Certain principles of policy to be followed by the State), 42 (Provision for just and humane conditions of work and maternity relief) and 43 (Living wage, etc., for workers). The Court further held that the notifications ‘legitimize the subjection of workers to onerous working conditions at a time when their feeble bargaining power stands whittled by the pandemic’. Finally, relying on Article 21 of the Constitution of India, 1950 the Court noted that the fundamental right to life included workers’ right to humane conditions at work and an ‘equal opportunity at social and economic freedom’.

For the reasons that COVID-19 pandemic did not constitute a ‘public emergency’ for the purposes of the Factories Act, 1948 and that the notifications violated the workers’ fundamental right to life, the Court struck them down.