Public emergency under labour law must meet the statutory test; blanket factory exemptions and reduced overtime pay were invalid.

The SC held that COVID-19 and the lockdown did not amount to a "public emergency" under Section 5 of the Factories Act, because the statutory phrase requires a grave emergency objectively threatening the security of India by war, external aggression, or internal disturbance of comparable gravity. It further held that a blanket exemption from working-hours protections, together with substitution of statutory overtime at double wages by proportionate overtime pay, was inconsistent with the welfare scheme of the Act and workers' constitutional protections. The impugned notifications were therefore quashed, and the statutory overtime entitlement was restored for eligible workers.

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Issues: (i) Whether the COVID-19 pandemic and the lockdown constituted a "public emergency" under Section 5 of the Factories Act, 1948 so as to justify the impugned notifications exempting all factories from specified working-hours provisions; (ii) Whether the blanket exemption and the proportional overtime-wage condition were consistent with the scheme of the Factories Act, 1948 and the workers' constitutional and statutory protections.

Issue (i): Whether the COVID-19 pandemic and the lockdown constituted a "public emergency" under Section 5 of the Factories Act, 1948 so as to justify the impugned notifications exempting all factories from specified working-hours provisions.

Analysis: Section 5 permits exemption only in a case of "public emergency", which is defined as a grave emergency threatening the security of India or part thereof by war, external aggression or internal disturbance. The expression is not left to subjective satisfaction and must exist as an objective fact. The statutory language requires a close nexus between the grave emergency and the threat to security. Read in context, "internal disturbance" must be of the same gravity as the other specified causes and cannot be expanded to cover every economic difficulty caused by the pandemic. The economic slowdown and financial strain resulting from COVID-19 did not amount to an internal disturbance threatening the security of the State in the statutory sense.

Conclusion: The pandemic and lockdown did not constitute a public emergency within Section 5, and the impugned notifications could not be sustained on that basis.

Issue (ii): Whether the blanket exemption and the proportional overtime-wage condition were consistent with the scheme of the Factories Act, 1948 and the workers' constitutional and statutory protections.

Analysis: The Factories Act is a welfare statute designed to secure humane working conditions, rest intervals, and fair remuneration, including overtime at double wages under Section 59. The impugned notifications materially departed from the statutory scheme by extending working hours, reducing rest protections, and replacing the statutory overtime entitlement with proportionate wages. The power under Section 5 could not be used to neutralize core labour protections for all factories irrespective of the nature of work, especially where the statutory conditions for emergency exemption were absent. Such a blanket measure also ran contrary to the constitutional commitment to dignity at work and protection against exploitation.

Conclusion: The blanket exemption and the overtime-wage condition were invalid and contrary to the Act's protective scheme.

Final Conclusion: The notifications were quashed, and the statutory overtime entitlement was directed to be applied to eligible workers. The decision affirms that emergency exemption powers under labour legislation must be exercised strictly within the statutory confines and cannot be used to dilute core worker protections absent the requisite grave emergency.

Ratio Decidendi: A statutory power to exempt labour protections during a public emergency can be exercised only when the emergency objectively satisfies the statutory definition, and it cannot be invoked to suspend core welfare safeguards or reduce statutory overtime benefits by a blanket order unsupported by that definition.

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