What is Factory Under the Factories Act, 1948?

The section 2(m) in the Factories Act, 1948 defines "factory" as any locationthat are

1. In the event that ten or more people are employed or working at any time during the previous twelve months and in any other area in where a manufacturing process is carried out using the power source, or is typically carried out or

2. When more than twenty people were employed or worked at any time during the previous twelve months and in any other area in that a manufacturing process being conducted by the power source, or is normally continued but not including:
a. Mines that are subject to the provisions under the Mines Act, 1952,
b. A mobile unit that is part of the troops that are part of the Union,
c. Railroad running shed, hotel or restaurant.

In section 6, the Act on Factories, 1948 regulates the registration of factories. All Factories(as described above in the section 2(m)) require to be registered by the government in accordance with the regulations of the Factories Act 1948. Additionally, Factories must ensure their employees' insurance as per the rules of the Employee State Insurance Act 1948( give certain benefits to employees in the event of sickness, maternity or injury at work).

In Section 6, the Factories Act governs the registration of establishments and factories. The rules are as below:

1. Rules for Submission
The state government can set regulations for the submission of drawings or descriptions of factories. The business must obtain prior permission by the government of the state or chief inspector prior to the construction or extension of any manufacturing facility. However, the addition or the replacement of the existing machinery will not constitute an extension if it is not a threat to the safety of the working area, and is not a threat to the health and safety of employees.

2. Nature of Plans and Fees Payable
Plans and specifications have be submitted to obtain these permits (Permit application). It defines the specifications and nature of the plans and the person from whom they must be certified. It also outlines the fees due for registration/ licensingor renewals of licences.

3. Renewal of Licenses
The Act mandates the time for notice to be provided before the granting or renewal of licenses. Section 7 of the Factories Act 1948 clarifies the rules pertaining to this. In accordance with this section the person who occupies the premises must serve an unsigned notice to relevant authorities 15 days prior to the day they are allowed to take possession of the premises.

4. Contents of Notice
It will include:
a. Address and name of the factory Owner, Occupier, and Factory.
b. Contact details for the address.
c. The nature of the manufacturing process.
d. The total horsepower is installed at the factory
e. Name of the factory Manager
f. The number of employees employed.

5. Appointment of a new Manager
If the appointment to a managerial position the management should promptly inform Chief Inspector i.e. within 7 days of the appointment. In there is no designated supervisor we will consider the person who is in charge of the factory to be director of the plant.
If the request for permission (duly filled in) is addressed to the chief Inspector of the state or the government through registered mail and no reply was received within 3 months from the date it was sent, the request is considered to be accepted. It is known an automatic approval.
The licensing rules require the authorities to grant a licence based on the fulfillment of all legal conditions. The authority is able to deny an application for a license unless it receives the direction of the government. (S. Kunju v. Kerala, (1985) 2 LLJ 106).
In the event that the chief inspector does not want to allow the extension or construction of the factory, then the applicant is able to re-apply for permission to state officials over the same. If the state government does not allow the project, the applicant may reapply at the federal government. The period for reappeal will be 30 days after the day of the refusal.

ESI scheme:-

1. The ESI Scheme is a social security plan. It was enacted within Rajasthan in the State of Rajasthan with effect on 02.12.1956 pursuant to section 58 in the ESI Act 1948. The principal purpose in the plan is the provision of medical services to employees of different commercial, industrial organizations, private educational, medical and other institutions that employ at least 10 employees, and whose salaries are the equivalent of Rs. 21000 each month, or lesser.
2. The beneficiaries include all employees who are insured, as well as spouse, sons up to age 21 and receiving education as a single parent, daughter unmarried and all children with any illness, regardless of age, and dependent parents.
3. The Payment of Bonus Act 1965 permits employers to pay bonuses of 8.33 percent of the basic annual salary to employees whose monthly salaries are less than the amount of Rs. 21000. The base amount can go up to 20% if the business wants to contribute to greater profit.

Registration Under Labour Laws
Service Provider that provides a wide variety of services that include the following: Factory License (Including the Factory Building Plan Approval), Contract Labour Registration (Labour Licence) Principal Employer Registration registration under the Provident Fund Act, Fire Safety Plan Approval, and State Pollution Control NOC Certificate.

Factory License
In accordance with the provisions of Factories Act and Rules applicable to every State-owned factory employing more than 10 workers using power or 20 or more workers with or without the assistance of Power are required to obtain Factory License prior to the start of the Factory. The license must be renewed every year. Before applying for the Factory License each owner of a factory must apply for Factory Building Plan approval. According to Factory Building plan approval Maps and drawings of the Factory are required in order to be approved according to The State Factory Rules. The process for Building approval and Factory License is about 20-25 working days.

According to the provisions in the Contact Labour (Regulation and Abolition) Act, 1970 any contractor who is performing outsourced work or employing more than 20 employees at any point during the year is required to obtain a Labour License. There are distinct rules that apply to states. The time required for obtaining an Labour License 5-7 Working Days.

Compliance with the law of labour is enforced by the State and Central Government. Central Government. The following are the requirements to allow an Act to be enforced.

The Contract Labour (Regulation and Abolition) Act, 1970
1. If the establishment has 20 plus 20 people employed for the past 12 months in contract work.
2. More than or equal to 20 people contracted by the company during the last 12 months as contract labor.
It's not applicable in locations where the work is informal. If an employer fails to comply with the law and the employer is not registered, then it cannot hire labour.

Building And Other Construction Workers Act, 1996
It is applicable to workplaces that have more than 10 employees worked directly for contractors on construction sites. The law is not applicable to construction and building jobs where the Factories Act, 1948 as well as the Mines Act, 1952 applies.

The purpose of the law is to collect the cess from the construction process and to utilize the funds for the well-being of construction workers legally registered under the law. The amount to be collected is 1percent of the total cost of construction the structure.

Minimum Wages Act, 1948
The section 12 in the law on minimum wage stipulates that the contractor is responsible to pay the minimum wage to employees who are working as scheduled employees. Section 14 states that wages will be doubled when workers are working beyond the time. The hourly wage will be increased by two percent in overtime.

Pay of wages Act 1936.
Section 4 is concerning the determination of minimum wages that will not exceed 1 month. The section 5 in the Act stipulates that payment of wages must be paid prior to the 7th day of the final day of the pay period that it is not more than 1,000 employees. Ten days prior to the date in other situations. Section 13-A discusses the maintenance of registers as well as records.

Employment State Insurance Act, 1948
The section 2(12) in the Act is discussed in relation to its applicability to non-seasonal businesses which employ 10 or more individuals. Section 1(5) broadens the scope of the applicability to shops, hotels as well as cinemas, restaurants, and newspapers, that employ 20 or more people. are employed. The scheme is also applicable to Educational Institutes and Private medicals.

Industrial Employment (Standing Order) Act, 1946
In accordance with this Act it is applicable to industries in which greater than or equal to 100 employees have been employed previously within the last 12 months.

Factories Act, 1948
The Act applies to factories as defined by the act. If there were 20 or more employees at the facility in the past twelve months.

Events of Non- Compliance
1. Fines
2. Penalties
3. Lawsuit
4. Loss of Credibility
5. Loss of Contract
6. The closing of business

Labour Law compliance rules in India are enforced by all the Acts that are quite outdated. The rules are constantly evolving and it is the responsibility of businesses to keep an watch on the changes.

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