Pandemic can’t be reason to exempt factories from paying overtime, SC to Gujarat govt

The Gujarat government had issued two notifications exempting factories from paying overtime wages to employees and providing them ideal working conditions during the pandemic.

The Supreme Court in New Delhi | Manisha Mondal | ThePrint

New Delhi: Covid-19 is not an internal emergency threatening the security of the country and cannot be a reason to set aside the statutory rights of factory workers, the Supreme Court held Thursday, while quashing two Gujarat government notifications exempting factories from paying overtime wages to employees and providing them ideal working conditions during the pandemic.

A three-judge bench of Justices D.Y. Chandrachud, Indu Malhotra and K.M. Joseph also ordered the state government to pay overtime wages to workers during the pandemic.

“The notifications, in denying humane working conditions and overtime wages provided by law, are an affront to the workers’ right to life and right against forced labour that are secured by Articles 21 and 23 of the Constitution,” the bench said.

The judgment came on a petition, filed by the Gujarat Mazdoor Sabha and Trade Union Centre of India, challenging the state government’s notifications that extended working hours without any overtime payment. It is likely to have a bearing on other states too.

The Labour and Employment Department of Gujarat had issued its first notification in April, under Section 5 of the Factories Act, to exempt all registered factories from observing some of the obligations that employers have to fulfill toward workers.

The stated aim of the notification was to provide “certain relaxations for industrial and commercial activities” from 20 April 2020 till 19 July 2020.

Another notification was issued on 20 July that extended this exemption granted to factories till 19 October.

However, the court held that the pandemic cannot be a reason to do away with the statutory regulations that ensure dignity and right to proper wages to workers.

“This court is cognizant that the respondent aimed to ameliorate the financial exigencies that were caused due to the pandemic and the subsequent lockdown. However, financial losses cannot be offset on the weary shoulders of the labouring worker, who provides the backbone of the economy,” declared the court.

Gujarat was also faulted for invoking Section 5 of the Factories Act, which the court held can only be utilised in case of an “internal disturbance”, of a nature that posed a “grave emergency” so as to constitute a “public emergency”.

The court said the pandemic did not result in a situation whereby the “security of India” was threatened.

‘Notifications legitimise subjection of workers’

The petition challenged the notifications on the ground that they were “ultra-vires” of the Factories Act.

The notifications exempted factories from complying with various provisions of the Factories Act and required workers in Gujarat to work 12 hours a day and 72 hours in a week, with a 30-minute break after six hours. It also did away with the requirement of paying double wages for overtime, allowing for the extra hours to be compensated at normal working wages per hour.

The petitioner’s lawyer Aparna Bhat pointed out that Section 5 of the Factories Act allowed for exemption to be granted to a factory or a class of factories. But the notification under challenge gave a blanket exemption and, is therefore, liable to be quashed.

Noting that the Factories Act attempts to neutralise excesses in the “skewed power dynamics between the managements of factories and their workmen”, by ensuring decent working conditions, dignity at work and adequate wages, the court held that the notifications in question “legitimise the subjection of workers to onerous working conditions at a time when their feeble bargaining power stands whittled by the pandemic”.

The bench also recalled the “immense migrant crisis” that had unfolded after factory operations came to a halt during the lockdown.

Constitutional principles of “freedom” and “liberty” will remain hollow if “aspiration for a dignified life can be thwarted by the immensity of economic coercion”, the court noted, saying it was “ironical” that the Gujarat government issued the notifications at a time when it “must ensure welfare” of the worker class.

“Clothed with exceptional powers under Section 5, 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,” it held.

‘Protecting labour welfare, fighting health crisis require balance’

The Gujarat government had cited extreme financial exigencies arising due to the Covid-19 pandemic to validate the two notifications. It claimed to have deployed “a holistic approach to maintain the production, adequately compensate workers and take sufficient measures to safeguard the said factories and establishments in carrying out essential activities”.

However, the court was unable to find “force” in the state government’s arguments.

“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,” the court remarked.

Such a blanket notification of exemption to all factories, irrespective of the manufactured product, while denying overtime to workers, indicates the intention to “capitalise on the pandemic to force an already worn-down class of society,” the bench held.

“The need for protecting labour welfare on one hand, and combating a public health crisis occasioned by the pandemic on the other, may require careful balances. But these balances must accord with the rule of law,” said the court.

A statutory provision that grants an exemption on stipulated conditions must be scrupulously observed, advised the bench. It also said that a law cannot be interpreted to eliminate provisions that promote dignity and equity in the workplace.

‘Workers’ right to life not contingent on the mercy of employers’

The “right to life” guaranteed to every person under Article 21 of the Constitution also includes a worker, the court said.

“To a worker who has faced the brunt of the pandemic and is currently laboring 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,” it added.

The bench went on to conclude that the notifications were an insult to the workers’ rights, noting: “A workers’ right to life cannot be deemed contingent on the mercy of their employer or the state.”