2020 Supreme(SC) 567

SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, Indu Malhotra, K M Joseph, JJ.
Gujarat Mazdoor Sabha & Anr. – Petitioners
Versus
The State of Gujarat – Respondent
Writ Petition (Civil) No. 708 of 2020
Decided on : 01-10-2020

IMPORTANT POINTS
(1) Existence of a public emergency must be demonstrated as an objective fact, when its existence is questioned in a challenge to exercise of power.
(2) Expression ‘internal disturbance’ cannot be divorced from its context, or be read in a manner divorced from other two expressions which precede it.
(3) State cannot permit workers to be exploited in a manner that renders hard-won protections of Factories Act, 1948 illusory and constitutional promise of social and economic democracy into paper-tigers.
(4) Workers’ right to life cannot be deemed contingent on mercy of their employer or State.
(5) Justification for rights-infringing measures that interfere with or limit exercise of fundamental rights and liberties must be based on existence of a rational connection between those measures, situation in fact and object sought to be achieved.

Headnote:

(A) Factories Act, 1948 – Section 5 – Proclamation of Public Emergency – Existence of a public emergency is a pre-requisite to exercise of power – Whether there exists a public emergency is not left to subjective satisfaction of State Government – Existence of a public emergency must be demonstrated as an objective fact, when its existence is questioned in a challenge to exercise of power – Existence of situation must be demonstrated as an objective fact – Co-relationship between cause and effect must exist. (Para 8)

(B) Constitution of India – Articles 352, 355 and 356 – Factories Act, 1948 – Section 5 – Proclamation of Public Emergency – Financial stringency in economic downturn resulting from outbreak of COVID -19 – Validity of notification intended to provide certain relaxations for industrial and commercial activities – Power under Section 5 of Factories Act can be exercised in a public emergency – To constitute a public emergency, there must be a grave emergency – Emergency must be of such a nature as to threaten security of India or a part of its territory – Threat to security of India or a part of territory must be caused by war, external aggression or an internal disturbance – Expression ‘internal disturbance’ cannot be divorced from its context, or be read in a manner divorced from other two expressions which precede it – They are indicative of gravity of cause which threatens security of India or a part of its territory – An internal disturbance must be of a similar gravity – It is necessary to evaluate whether a situation of internal disturbance threatens security of India, or a part of its territory to qualify as a public emergency – In absence of any one or more of constituent elements, conditions requisite for exercise of statutory power will not exist – Global pandemic caused by COVID-19 is an unprecedented situation with which countries all over world are grappling – During lockdown, economic activity in country was brought to a standstill – There has been a loss of incomes and livelihood – Brunt of the pandemic and of lockdown has been borne by working class and by poorest of poor – Bereft of social security, they have no fall back options – Respondent has in exercise of its powers under Section 5 of Factories Act issued impugned notifications purportedly to provide a fillip to industrial and commercial activities. (Paras 19 and 24)

(C) Factories Act, 1948 – Section 5 read with Sections 51, 54, 55 and 56 – Proclamation of Public Emergency – Financial stringency in economic downturn resulting from outbreak of COVID -19 – Validity of notification intended to provide certain relaxations for industrial and commercial activities – Economic slowdown created by COVID-19 pandemic does not qualify as an internal disturbance threatening security of State – Pandemic has put a severe burden on existing, particularly public health, infrastructure and has led to a sharp decline in economic activities – Union Government has taken recourse to provisions of Disaster Management Act, 2005 – However, it has not affected security of India, or of a part of its territory in a manner that disturbs peace and integrity of country – Economic hardships caused by COVID–19 certainly pose unprecedented challenges to governance – However, such challenges are to be resolved by State Governments within domain of their functioning under law, in coordination with Central Government – Unless threshold of an economic hardship is so extreme that it leads to disruption of public order and threatens 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 conditions requisite for a valid exercise of statutory power exist under Section 5 – That is absent in present case – Notifications in question, besides specifically exempting all factories from applicability of Sections 51, 54, 55 and 56, effectively override Section 59 of Factories Act – Notifications make significant departures from mandate of Factories Act – Impugned notifications do not serve any purpose, apart from reducing overhead costs of all factories in the State, without regard to nature of their manufactured products – Need for protecting labour welfare on one hand and combating a public health crisis occasioned by pandemic on other may require careful balances – But these balances must accord with rule of law – A statutory provision which conditions grant of an exemption on stipulated conditions must be scrupulously observed – It cannot be interpreted to provide a free reign for State to eliminate provisions promoting dignity and equity in workplace in face of novel challenges to State administration unless they bear an immediate nexus to ensuring security of State against gravest of threats – Notifications in question legitimize subjection of workers to onerous working conditions at a time when their feeble bargaining power stands whittled by pandemic – Clothed with exceptional powers under Section 5, State cannot permit workers to be exploited in a manner that renders hard-won protections of Factories Act, 1948 illusory and constitutional promise of social and economic democracy into paper-tigers – To a worker who has faced brunt of pandemic and is currently labouring in a workplace without luxury of physical distancing, economic dignity based on rights available under statute is the least that this Court can ensure them – Workers’ right to life cannot be deemed contingent on mercy of their employer or State – Notifications, in denying humane working conditions and overtime wages provided by law, are an affront to workers’ right to life and right against forced labour that are secured by Articles 21 and 23 of Constitution – Notification No. GHR/ 2020/56/FAC/142020/346/M3 dated 17 April 2020 and Notification No. GHR/2020/92/FAC/142020/346/M3 dated 20 July 2020 issued by Labour and Employment Department of Respondent State quashed – Overtime wages shall be paid, in accordance with provisions of Section 59 of Factories Act to all eligible workers who have been working since issuance of notifications. (Paras 28, 31, 33, 36, 38, 43, 44, 45 and 46)

(D) Doctrine – Principle of Proportionality – Conditions to determine validity of State action that could impinge on fundamental rights – Justification for rights-infringing measures that interfere with or limit exercise of fundamental rights and liberties must be based on existence of a rational connection between those measures, situation in fact and object sought to be achieved – Measures must be necessary to achieve object and must not infringe rights to an extent greater than is necessary to fulfil the aim – Restrictions must not only serve legitimate purposes – They must also be necessary to protect them – State should provide sufficient safeguards against abuse of such interference. (Para 9)

Facts of the case:

First Petitioner is a trade union registered under the Trade Unions Act, 1926 and represents about ten thousand workers employed in factories and industrial establishments in the State of Gujarat. The second Petitioner is a federation of registered trade unions and represents a hundred thousand workmen in factories and establishments across India. Issue for analysis is whether the State’s notifications dated 17 April 2020 and 20 July 2020.fall within the ambit of power conferred by Section 5 of the Factories Act. The validity of the notifications depends on whether the COVID-19 pandemic and the nationwide lockdown qualify as a ‘public emergency’ as defined in Section 5. The statute provides both the language and the dictionary to interpret it.

Findings of Court:

Constitution allows for economic experiments. Judicial review is justifiably held off in matters of policy, particularly economic policy. But the Directive Principles of State Policy cannot be reduced to oblivion by a sleight of interpretation. To a worker who has faced the brunt of the pandemic and is currently labouring in a workplace without the luxury of physical distancing, economic dignity based on the rights available under the statute is the least that this Court can ensure them.

Result : Writ Petition allowed.