Factory Act

Labour law compliance involves complying with various acts considering Factory Act.

The Factories Act, 1948 is a social act which was passed to strengthen the position of workers, who are working in the factories across the country.

This Act is applicable to all factories which have employed 10 or more than workers on any day of the preceding 12 months, engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power.

The Factory Act compliances began with the setting up the plant and the hours of labour and sanitation, age of commencing work, protection against accidents, mealtimes and holidays, the methods of remuneration, to the rate of wages and how often a work space must be lime washed. The Factory Inspectors can examine workspace anytime and declare fines for violation of any labour laws and regulations.

Factory Act brief

The main objectives of the Indian Factories Act, 1948are to regulate the working conditions in factories, to regulate health, safety welfare, and annual leave and enact special provision in respect of young persons, women and children who work in the factories.

Working Hours: According to the provision of working hours of adults, no adult worker shall be required or allowed to work in a factory for more than 48 hours in a week. There should be a weekly holiday.

Health: For protecting the health of workers, the Act lays down that every factory shall be kept clean and all necessary precautions shall be taken in this regard. The factories should have proper drainage system, adequate lighting, ventilation, temperature etc.

Adequate arrangements for drinking water should be made. Sufficient latrine and urinals should be provided at convenient places. These should be easily accessible to workers and must be kept cleaned.

Safety: In order to provide safety to the workers, the Act provides that the machinery should be fenced, no young person shall work at any dangerous machine, in confined spaces, there should be provision for man­holes of adequate size so that in case of emergency the workers can escape.

Welfare: For the welfare of the workers, the Act provides that in every factory adequate and suitable facilities for washing should be provided and maintained for the use of workers.

Facilities for storing and drying clothing, facilities for sitting, first-aid appliances, shelters, rest rooms’ and lunch rooms, crèches, should be there.

Penalties:- The provisions of The Factories Act, 1948, or any rules made under the Act, or any order given in writing under the Act is violated, it is treated as an offence. The following penalties can be imposed:-

(a) Imprisonment for a term which may extend to one year;

(b) Fine which may extend to one lakh rupees; or

(c) Both fine and imprisonment.

If a worker misuses an appliance related to welfare, safety and health of workers, or in relation to discharge of his duties, he can be imposed a penalty of Rs. 500/-.

Applicability of Factories Act, 1948

The Act is applicable to any factory whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on; but this does not include a mine, or a mobile unit belonging to the armed forces of the union, a railway running shed or a hotel, restaurant or eating place.

Importance of Factories Act, 1948

The Factories Act, 1948 is a beneficial legislation. The aim and object of the Act is essentially to safeguard the interests of workers, stop their exploitation and take care of their safety, hygiene and welfare at their places of work. It casts various obligations, duties and responsibilities on the occupier of a factory and also on the factory manager. Amendments to the Act and court decisions have further extended the nature and scope of the concept of occupier, especially vis-a-vis hazardous processes in factories.

Compliances

Under the Factories Act, the compliances to be followed usually are

• Registration/Amendment/Renewal/Exemptions/Permission under the Factory Act, 1948 and The Building & Other Construction Workers (R.E &C) Act 1996.
• Computerized statutory records and Late Night Women Working Permission.
• Factory License, Factory building Plan and Standing Order Approval.
• Issuance of Assessment/NOC under the Building &Other Construction Workers (R.E &C) Act 1996.
• Issuance of Registration Certificate under Contract Labour Act and under BOCW Act.
• Maintaining Notice Board Compliances under applicable labour laws.
• Monthly Statutory Data Processing, Documentation & Submissions.
• Periodical preparation & submission of all statutory registers & returns as per statutory periodicity.
• Liaising with Government Authorities during or after inspections / visits or otherwise
• Support in drafting responses to Government Notices & Observations
• Labour Laws Compliances Audits of Vendors

The Factories act mandates the following compliances for the entities on which it is applicable:

• Sections 6 and 7 – Licensing of factory: An Occupier is required to get the license before commencement of production.
• Chapter III – Health provisions in factory: An employer is required to observe the health provisions like cleanliness, disposal of waste effluents, ventilation and temperature, dust and fume, overcrowding, lighting, drinking water, latrine and urinals and spittoons.
• Chapter IV – Safety provisions: The employer is required to observe the safety provisions like fencing of machinery, work on or near machinery in motion, employment of young persons in dangerous machine, self acting machine, prohibition of woman and child labour near cotton openers, revolving machinery, pressure plant, protection of eyes and appointment of Safety Officer etc.
• Chapter V – Welfare provisions: An employer is required to follow welfare provisions such as washing facilities, facilities for storing and drying clothing, facilities for sitting, first aid appliances, canteen, shelters, lunch room, rest room, crèches and appointment of Welfare Officer.
• Chapter VI – Working hours of adults: An employer is required to follow the working hours and relating provisions such as weekly hours, weekly holiday, compensatory holiday, daily hours, intervals for rest, spread over, night shift, prohibition of over lapping shifts, extra wages for overtime and restriction on double employment etc.
• Chapter VII – Employment for young persons: An employer is required to obey the provisions relating to prohibition of young children, non adult workers to carry tokens, certificate of fitness, working hours for children, notice of period for work for children etc.
• The employer is also required to comply with the following provisions :
• To allow annual leave with wages to the workers.
• To maintain Register of annual leave with wages, Register of accidents, Register of whitewashing, Register of humidity, Register of inspections, Register of adult workers etc.

Definition of factory

Section 2(m) of the Factories Act, 1948 defines ‘factory’ as any premises-

• Where ten or more workers are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of the power, or is ordinarily so carried on, or
• Where twenty or more workers are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of the power, or is ordinarily so carried on, but does not include:
• Mines subject to the operation of the Mines Act, 1952,
• A mobile unit belonging to the armed forces of the Union,
• Railway running shed or a hotel, restaurant or eating place.

Section 6 and 7 (Licensing of Factory)

The occupier of the factory is required the previous permission from the State Government or the Chief Inspector in writing for the site on which factory is to be situated.

And to get a license, the occupier must send the notice under section 7 of the act to the Chief Inspector, at least 15 days before he begins to use the premise as a factory containing the following details

• Name and address of the occupier
• Name and address of the factory
• Name and owner of the premise
• Address for communication
• Nature of the manufacturing process to be carried in the factory
• Total horsepower to be installed
• Name of the manager of the factory
• Number of workers likely to be employed
• Other particulars which may be prescribed

Chapter III (Health Provisions)

• Cleanliness– Every factory must be clean and there should be no accumulation of dirt. Floor, windows, passage, benches of workrooms, staircase etc. should be cleaned on a regular basis with disinfectant.
• Disposal of wastes and effluents– the factory shall have proper arrangements for the treatment of wastes and effluents.
• Ventilation and Temperature– the factory premises should have adequate ventilation by the circulation of the fresh air. The walls and roofs should be of such quality that temperature in the factory doesn’t rise beyond the reasonable conditions of comfort.
• Dust and Fume– If the work carried in factories is such that dust and fume are released in substantial quantities, effective measures should be taken to prevent its accumulation in any workroom.
• Artificial Humidification– If the humidity in any factory is increased artificially, the water used for this purpose should be taken from a public water supply or should be purified before it is used.
• Overcrowding– No room in any factory shall be overcrowded to the extent that it becomes injurious to the health of the workers employed in the factory.
• Lighting– The working area for the workers and the passage have adequate and sufficient light, natural or artificial or both.
• Drinking Water– There should be suitable points in every factory which provide a sufficient supply of drinking water and the ‘drinking water’ shall be mentioned in the language understood by the workers.
• Latrines and Urinals– Sufficient latrine and urinal accommodation should be there in every factory and they should be accessible to the workers all the time while they are present in the factory. The accommodation so provided should be separate for male and female with proper lights and ventilation.
• Spittoons– Every factory shall have a sufficient number of spittoons placed at a convenient place. The spittoons should be clean regularly.

Chapter IV (Safety provisions)

• Fencing of Machinery– Every moving part of a prime mover and every flywheel should be fenced securely unless they are safe to be used otherwise.
• Work on Near Machinery in Motion– When it becomes necessary to examine any part of the machinery while the machinery is in motion, such task should be done only be a specially trained adult male worker wearing tight fitted cloth.
• Employment of Young Persons on Dangerous Machines– Only a fully instructed person about the dangers arising in connection with the machine and precautions to be observed, shall be allowed to work on dangerous machines under the supervision of a person who is knowledge and experience of the machine.
• Striking Gear and Devices for Cutting-off Power– An appliance should be provided and maintained to move driving belts to and from fast and loose pulleys.
• Self-Acting Machines– No self-acting machine shall be kept in such a space over which any person is liable to pass.
• The Casing of New Machinery– Every set, screw, bolt or key in all machinery driven by power and installed in a factory should be encased effectively to prevent danger.
• Prohibition of Employment of Women and Children near Cotton-openers– cotton-opener work is done by the factory, no woman or child should be employed for pressing cotton in such work.
• Hoists and Lifts– Every hoist and lift should be sound, adequately strong and properly maintained.
• Lifting Machines, Chains, Ropes and Lifting Tackles– All parts of lifting machines, chain, rope and lifting tackle should be of good construction, sound material and free from defects. They should be thoroughly checked by a competent officer at least once in 12 months.
• Revolving Machinery– Revolving machinery shall be permanently affixed to or placed and there should be a notice indicating the minimum safe working area around the machinery.
• Pressure Plant– If a factory is using any machinery which is operated at a pressure above the atmospheric pressure, then the pressure should be kept under check.
• Floors, Stairs, and Means of Access– All floors, stairs, and passages should be properly constructed and maintained.
• Pits, Sumps, Opening in floors etc.-If there is any vessel, tank or pit in the floor which may be a source of danger shall be securely covered or fenced.
• Excessive Weight– No worker employed in the factory shall be made to carry or move any load which might cause any injury to him.
• Protection of Eyes– If any process is carried out in the factory which involves a risk of injury to the eyes from particles or fragments, suitable goggles or effective screens should be provided to the workers who are working in such circumstances.
• Precautions against Dangerous Fumes, Gases etc.- No person should be allowed to enter any confined space until precautionary measures have been taken to remove such fumes and gases.
• Precautions Regarding the Use of Portable Electric Light– No portable electric light of more than 24 volts should be used in any confined space or chamber or tank.
• Explosive or Inflammable Dust, Gas etc.– All precautionary measures should be taken to prevent an explosion of gases which are likely to explode on ignition.
• Precaution in Case of Fire– The factory should take all the practical measures to prevent the outbreak of fire and its spread, both inside and outside the factory. Safe means of escape should be in the factory for the persons, in case of a fire.
• Maintenance of Building– The building of the factory should be maintained properly so that it does not cause any injury to the health of the workers.
• Appointment of Safety Officer– In a factory, where the number of employers is more than 1000 than the factory is required to appoint a safety officer.

Chapter V (Welfare Provisions)

• Washing Facilities– Separate and adequate facilities to be provided for male and female worker. The facilities should be clean and conveniently accessible.
• Facility for Storing and Drying Clothing– The factory should provide a suitable place for keeping the clothes not worn during the working hours and for the drying of wet clothes.
• Facilities for Sitting– The workers who are obliged to work in a standing position should be given proper suitable sitting arrangements during their rest hours.
• First-aid Appliances– First-aid boxes or cupboards containing with necessary contents, should be maintained and provided during all the working hours.
• Canteens– If the factory has more than 250 workers employed, minimum one canteen should be provided and maintained by the occupier.
• Shelters, Restrooms, and Lunch Rooms- A factory having more than 150 workers should provide adequate and suitable restrooms and lunch rooms, with provision for drinking water.
• Creches– If the factory employs more than 30 women workers, it should provide a suitable room for the use of children under the age of 6 years of such women.
• Welfare Officers– If a factory has more than 500 employers, such numbers of welfare officers should be employed as may be prescribed.

Chapter VI (Working Hours of Adults)

• Weekly Hours– Any adult worker should not be allowed to work in a factory for more than 48 hours a week.
• Weekly Holidays– No worker should be made work for continuously 10 days without any holiday. No worker should work on the first day of the week unless he has or will have a holiday on one of the 3 days immediately before or after the said day.
• Compensatory Holidays– If a worker is deprived of any of the weekly holidays, he should be allowed take that holiday in that month or within the two months immediately following that month.
• Daily Hours– No worker should be allowed to work in a day more than 9 hours a day. (Subject to the previous approval of Chief Inspector)
• Intervals for Rest– The working hours of an adult worker should be set in a way that he doesn’t work for more than 5 hours without taking an interval for rest of at least half an hour.
• Spread over– The working periods of an adult worker in a factory shall be arranged in such a manner that they do not work for more than ten and a half hours a day including the intervals for rest.
• Night Shifts-If a worker works on a night shift, the hours he has worked for after the midnight should be counted in the previous day.
• Prohibition of Overlapping Shifts– Not more than one worker should be given works of the same kind at the same time.
• Extra Wages for Overtime– If any worker works for more than 48 hours in any week, he should be entitled to wages at the rate of twice his ordinary rate of wages.
• Restriction on Double Employment– A worker should not be allowed to work in a factory if he is already doing work in one.
• Notice of Periods of Work for Adults– A notice should be put every day clearly showing the periods in which adult worker may be required to work that day.
• Register of Adult Workers– Every factory is required to maintain a register of adult workers showing the name and nature of the work of a worker.
• Hours of Work to Correspond with Notice and Register– No worker should be allowed to work any work other than mentioned in the notice and the register.

Chapter VII (Employment for young persons)

• Prohibition of Employment of Young Children– No child who is less than 14 years of age be allowed to work in any factory.
• Non-adult Workers to Carry Tokens– An adolescent should not be allowed to work in a factory unless a certificate of fitness has been granted to him under section 69 of the Act.
• Certificate of Fitness– A certifying surgeon can issue a certificate of fitness to an adolescent only when the manager of the factory and the guardian of the adolescent sign a document that he will be employed in that particular factory.
• Working Hours for Children– No child should be allowed to work more than four and a half day in a day and should not be allowed to work in the night at all.
• Notice of Periods of Work for Children– Every factory should display and maintain a notice every day for the periods during which children will be allowed to work.
• Register of Child Workers– A register should be maintained in the factory mentioning the name of the child worker, the nature of his work, the group in which he is included, the shift of his group and his certificate of fitness. No child worker should be allowed to work in the factory unless his name is entered in the register of child workers.
• Hours of Work to Correspond with Notice– No child should be employed in the factory otherwise in accordance with the notice of periods of work for children displayed in the factory.

An adolescent (both male and female) who has obtained a certificate of fitness can work in the factory only during the time period of 6 A.M.- 7 P.M.

Chapter VII (Annual Leave with Wages)

• Annual Leave with Wages– Every worker who has worked for 240 days or more in a factory in a year should be allowed to have leaves with wages in the subsequent year.
• Wage during Leave Period– A worker who has taken leave under section 79 or 80 of the act, shall be entitled to wages at a rate equal to the daily average of his total earnings for the day during the month immediately preceding his leave.
• Payment in advance in Certain Cases– A worker who has been allowed leave for less than four days, in the case of an adult, and five days, in the case of a child, should, before his leave begins, be paid the wages due for the period of the leave allowed.

In addition, the occupier a Health Register in respect of persons employed in occupations declared to be dangerous operation under section 87 of the Act.

• Maintain a Bound Inspection Book.
• Annual return to be filed on time.
• Report form Health Officer.

Penalties under Factory Act, 1948

Section 92. General penalty for offences. –

Save as is otherwise expressly provided in this Act and subject to the provisions of section 93, if in, or in respect of, any factory there is any contravention of the provisions of this Act or of any rules made there under or of any order in writing given there under, the occupier or manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both, and if the contravention is continued after conviction, with as further fine which may extend to one thousand rupees for each day on which the contravention is so continued.

Provided that where contravention of any of the provisions of Chapter IV or any rule made there under or under section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.

Explanation. – in this section and in section 94 “serious bodily injury” means an injury which involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to, any limb or the permanent loss of, or injury to sight or hearing, or the fracture of any bone, but shall not include, the fracture of bone or joint (not being fracture of more than one bone or joint) of and phalanges of the hand or foot.

General Manager, Wheel & A. P, Bangalore v. State of Karnataka (1996) .It was held in this case that the requirement of obtaining sanction to prosecute is mandatory and taking cognizance of an offence in the absence of sanction cannot be allowed to stand and has to be quashed.

Provincial Government v. Ganpat, AIR 1943 Nag 243.It was held in this case where the occupier or the manager of the factory admits the guilt under Section 92 of the Act, but alleges the clerk of the Factory to be the actual offender, the onus of establishing the innocence is on such occupier or the manager as the case maybe.

Section 94. Enhanced penalty after previous conviction. –

(1) If any person who has been convicted of any offence punishable under section 92 is again found guilty of an offence involving a contravention of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term which may extend to three years or with fine, which shall not be less than ten thousand rupees but which may extend to two lakh rupees or with both;

Provided that the Court may, for any adequate and special reasons to be mentioned in the judgment, impose a fine of less than ten thousand rupees:

Provided further that where contravention of any of the provisions of Chapter IV or any rule made there under or under section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than thirty-five thousand rupees in the case of an accident causing death and ten thousand rupees in the case of an accident causing serious bodily injury.

(2) For the purpose of sub-section (1), no cognizance shall be taken of any conviction made more than two years before the commission of the offence for which the person is subsequently being convicted.

Section 95. Penalty for obstructing inspector. –

Whoever wilfully obstructs an Inspector in the exercise of any power conferred on him by or under this Act, or fails to produce on demand by an Inspector any register or other documents kept in his custody in pursuance of this Act or of any rules made there under, or conceals or prevents any workers, in a factory from appearing before, or being examined by, an inspector, shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to ten thousand rupees or with both.

Section 96A. Penalty for contravention of the provisions of sections 41B, 41C and 41H.-

(1) Whoever fails to comply with or contravenes any of the provisions of sections 41B, 41C or 41H or the rules made there under, shall, in respect of such failure or contravention, be punishable with imprisonment for a term which may extend to seven years and with fine which may extend to two lakh rupees, and in case the failure or contravention continues, with additional fine which may extend to five thousand rupees for every day during which such failure or contravention continues, after the conviction for the first such failure or contravention.

(2) If the failure or contravention referred to in sub-section (1) continues beyond a period of one year after the date of conviction, the offender shall be punishable with imprisonment for a term which may extend to ten years.

Section 97. offences by workers. –

(1) Subject to the provisions of section 111, if any worker employed in a factory contravenes any provision of this Act or any rules or orders made thereunder, imposing any duty or liability on workers, he shall be punishable with fine which may extend to five hundred rupees.

(2) Where a worker is convicted of an offence punishable under sub-section (1) the occupier or manager of the factory shall not be deemed to be guilty of an offence in respect of that contravention, unless it is proved that he failed to take all reasonable measures for its prevention.

Exemptions of occupier or manager from liability in certain cases

Section 101. Exemption of occupier or manager from liability in certain cases.-

Where the occupier or manager of a factory is charged with an offence punishable under this Act he shall be entitled, upon complaint duly made by him and on giving to the prosecutor not less than three clear days’ notice in writing of his intention so to do, to have any other person whom he charges as the actual offender brought before the Court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the occupier or manager of the factory, as the case may be, proves to the satisfaction of the Court –

(a) that he has used due diligence to enforce the execution of this Act, and

(b) that the said other person committed the offence in question without his knowledge, consent or connivance,

that other person shall be convicted of the offence and shall be liable to the like punishment as if he was the occupier or manager of the factory, and the occupier or manager, as the case may be, shall be, discharged from any liability under this Act in respect of such offence:

Provided that in seeking to prove as aforesaid, the occupier or manager of the factory, as the case may be, may be examined on oath, and his evidence and that of any witness whom he calls in his support, shall be subject to cross-examination on behalf of the person he charges as the actual offender and by the prosecutor:

Provided further that, if the person charged as the actual offender by the occupier or manager, cannot be brought before the court at the time appointed for hearing the charge, the court shall adjourn the hearing from time to time for a period not exceeding three months and if by the end of the said period the person charged as the actual offender cannot still be brought before the court, the court shall proceed to hear the charge against the occupier or manager and shall, if the offence be proved, convict the occupier or manager.

Changes made in Factories Act, 1948 in 2016

The Factories (Amendment) Bill, 2016

The Factories Act 1948was an Act of Parliament passed in the United Kingdom by the Labour government of Clement Attlee. It was passed with the intention of safeguarding the health of workers and adopted by India.

The Factories (Amendment) Bill, 2016 was introduced in Lok Sabha on August 10, 2016 by the Minister for Labour and Employment, Mr. Bandaru Dattatreya. The Bill amends the Factories Act, 1948. The Act regulates the safety, health and welfare of factory workers. The Bill amends provisions related to overtime hours of work.

Key Amendments

# (Section 2) Power to make rules on various matters: The Act permits the state government to prescribe rules on a range of matters, including double employment, details of adult workers to be included in the factory’s register, conditions related to exemptions to certain workers, etc. The Bill gives such rule making powers to the central government as well.

Powers to make rules for exemptions to workers: Under the Act, the state government may make rules to (i) define persons who hold management or confidential positions; and (ii) exempt certain types of adult workers (e.g. those engaged for urgent repairs) from fixed working hours, periods of rest, etc. The Bill gives such rule making powers to both, the central and state governments.

Under the Act, such rules will not apply for more than five years. The Bill modifies this provision to state that the five-year limitation will not apply to rules made after the enactment of this Bill.

# (Section 64) Overtime hours of work in a quarter: The Act permits the state government to make rules related to the regulation of overtime hours of work. However, the total number of hours of overtime must not exceed 50 hours for a quarter. The Bill raises this limit to 100 hours. Rules in this regard may be prescribed by the central government as well.

# (Section 65) Overtime hours if factory has higher workload: The Act enables the state government to permit adult workers in a factory to work overtime hours if the factory has an exceptional work load. Further the total number of hours of overtime work in a quarter must not exceed 75. The Bill permits the central or state government to raise this limit to 115

Overtime in public interest: The Bill introduces a provision which permits the central or state government to extend the 115-hour limit to 125 hours. It may do so because of (i) excessive work load in the factory and (ii) public interest