Strikes Down Exemption on Overtime Wages under Gujarat Factories Act, 1948 - Supreme Court

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Strikes Down Exemption on Overtime Wages under Gujarat Factories Act, 1948 - Supreme Court 


 

Supreme Court strikes down exemption notification issued by the government of Gujarat under Factories Act, 1948

The Factories Act, 1948 regulates the safety, health, and welfare of workers in factories with at least 10 or 20 workers (based on use of power). The Act enables the government to exempt any factory or class of factories from its provisions in the case of a ‘public emergency’ only. 

‘Public emergency’ is defined to include a ‘grave emergency’ which threatens the security of the state by way of war, external aggression, or internal disturbance.

In April 2020, the Government of Gujarat issued Notification No. GHR/2020/56/FAC/142020/346/M3, Labour and Employment Department, Government of Gujarat, April 17, 2020  directs that all the factories registered under the Factories Act, 1948 shall be exempted from various provisions relating to weekly hours, daily hours, intervals for rest etc. of adult workers under section 51, section 54, section 55 and section 56 with the following conditions from 20th April till 19th July 2020,-

  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.
    • Means increase in maximum weekly work hours from 48 hours to 72 hours,
  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;
    • Means change in the mandatory rest periods from once every five hours to once every six hours
  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).” 
    • Means - Revision in the formula for calculating overtime wages from twice the rate of wages to a rate which is proportionate to existing wages. 
The notifications were valid from April 20, 2020 to October 19, 2020. 



These notifications were challenged before the Supreme Court. The question before the Court was whether the COVID-19 pandemic and the consequent lockdown created a ‘public emergency’ as defined in the Act. The Court noted the state’s argument that the pandemic created an economic slowdown and that the situation was on the “brink of an internal disturbance”. 


However, the Court concluded that the slowdown did not affect the security of India or any part of its territory in a way that disturbed its peace and integrity. Therefore, the Court struck down the notifications because the economic slowdown created by the pandemic did not qualify as an ‘internal disturbance’ that posed a ‘grave emergency’ and which threatened the security of the state.

The Court also observed that the denial of humane working conditions and payment of overtime wages as provided by law constituted an affront to Articles 21 (right to life) and Article 23 (prohibition against forced labour) of the Constitution of India. 

The Court further directed that overtime wages be paid to all workers who have been working since the date of the issuance of the notifications, at the original rate of double the ordinary wages.

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