Economic slowdown created by COVID-19 pandemic does not qualify as internal disturbance threatening the security of the state, the Supreme Court said on Thursday while quashing the notifications of Gujarat government which exempted factories from observing certain obligations towards workers.

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The apex court said that economic hardships caused by the pandemic certainly pose unprecedented challenges to governance but these are to be resolved by the state governments in coordination with the Centre.

A bench headed by Justice D Y Chandrachud said 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.

The top court delivered its judgement on a plea which had challenged the April 17 and July 20 notifications issued by the labour and employment department of the Gujarat government to exempt all factories registered under the Act from various provisions relating to weekly hours, daily hours, intervals for rest for workers and others.

The bench noted in its verdict that notification under section 5 of the Factories Act, which deals with power to exempt during public emergency, was issued on April 17 and its stated aim was to provide certain relaxations for industrial and commercial activities from April 20 to July 19.

Later, another notification was issued on July 20 which extended the exemption granted till October 19. The bench, also comprising Justices Indu Malhotra and K M Joseph, said that brunt of the pandemic and the nationwide lockdown has been borne by working class and by the poorest of the poor and bereft of social security, they have no fallback options.

The bench noted that the validity of these notifications depends on whether COVID-19 pandemic and the lockdown qualify as a public emergency' as defined in section 5 of the Act.

Even if we were to accept the respondent's (Gujarat) argument at its highest, that the pandemic has resulted in an internal disturbance, we find that the economic slowdown created by the COVID-19 pandemic does not qualify as an internal disturbance threatening the security of the state.

The pandemic has put a severe burden on existing, particularly public health, infrastructure and has led to a sharp decline in economic activities, it said.

The union government has taken recourse to the provisions of the Disaster Management Act, 2005. However, it has not affected the security of India, or of a part of its territory in a manner that disturbs the peace and integrity of the country, the bench said.

It said unless the threshold of economic hardship is so extreme that it leads to disruption of public order and threatens the security of India or of a part of its territory, recourse cannot be taken to such powers which are to be used sparingly under the law.

It noted that the 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.

However, a blanket notification of exemption to all factories, irrespective of the manufactured product, while denying overtime to the workers, is indicative of the intention to capitalize on the pandemic to force an already worn-down class of society, into the chains of servitude, it said.

It said that the Indian constitution is born from a transformative vision which aims to achieve social and economic democracy and labour welfare is an integral element of that vision.

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, it said.

It cannot be interpreted to provide a free reign for the state to eliminate provisions promoting dignity and equity in the workplace in the face of novel challenges to the state administration unless they bear an immediate nexus to ensuring the security of the state against the gravest of threats, the bench said.

It referred to the crisis during the pandemic where several workers were forced to abandon their cities of work and return to their native places due to halt in production which cut-off their meagre source of income. The notifications in question legitimize the subjection of workers to onerous working conditions at a time when their feeble bargaining power stands whittled by the pandemic, it said.

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, the bench said.

A workers' right to life cannot be deemed contingent on the mercy of their employer or the state. 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 is secured by Articles 21 and 23 of the Constitution, it said.

Exercising its extraordinary power under Article 142 of the Constitution to do complete justice, the apex court directed that overtime wages be paid in accordance with the provisions of the Factories Act to all eligible workers who have been working since the issuance of the notifications.