Factory forms an important part of the economy. ‘Factory’ is such a wide term that it requires special provisions to carry on all activities smoothly. In general terms ‘Factory’ is a building or buildings where people use machines to produce goods. But whenever a thing becomes extremely complex and important, general terms are no longer valid. Hence, in 1948, the Factories Act, 1948 came into existence. Factories Act, 1948 does not only define things related to factories but also solves certain confusions.
Today however factory and industry are understood to be interchangeable. But this is incorrect. Industry is a steady and systematic activity in which trade is organized whereas factory refers to the place where such activities are carried on. The entire day to day activity taking place in the factory is governed by the Factory Act 1948.
Objective of Factories Act ,1948:
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.
Important Terms Under the Factory Act:
Factory:
According to section 2(m) “factory” means any premises including the precincts thereof-
(i) 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
(ii) 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 does not include a mine subject to the operation of the Mines Act, 1952 (XXXV of 1952) or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place;
Explanation I: For computing the number of workers for the purposes of this clause all the workers in different groups and relays in a day shall be taken into account;
Explanation II: For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof.
In Ardeshir H. Bhiwandiwala v. State of Bombay, AIR 1962 SC 29 case, the Court has to determine whether the Salt works come within the definition of the word ‘factory’ under Section 2(m) of the Factories Act, 1948. Court observed: “The expression” premises including precincts” it has been urged, clearly indicates that in the context of the definition of the word ” factory “, premises meant only buildings as buildings alone can have precincts and there can be no precincts of any open land. This expression ” premises including precincts” does not necessarily mean that the premises must always have precincts. Even buildings need not have any precincts. The word ” including ” is not a term restricting the meaning of the word ” premises ” but is a term which enlarges the scope of the word ” premises “. We are therefore of opinion that even this contention is not sound and does not lead to the only conclusion that the word ” premises ” must be restricted to mean buildings and be not taken to cover open land as well.” Court further held that Section 85 of the Act empowers the State Government to declare that all or any of the provisions of the Act shall apply to any place wherein a manufacturing ‘process is carried on with or without the aid of power or is so ordinarily carried on notwithstanding certain matters mentioned in the section. The word ” place” is again a general word which is applicable to both open land and to buildings and its use in this section indicates that the Act can be applied to works carrying on a manufacturing process on open land. There is thus internal evidence in the Act itself to show that the word ” premises ” is not to be confined in its meaning to buildings alone. Court declared that tsalt work would come within the meaning of the word ‘premises’ used in the definition of ‘factory’ and ordered the occupier to comply with provisions of the Act.
In Lal Bovta Hotel Aur Bakery Mazdoor Union vs Ritz Private Ltd, 2007 (5) BomCR 456 case, the Court held that the establishment of a hotel would not fall for classification as a factory under section 2(m) of the Factories Act.
In Parry co Lt, Presiding Officer, II Additional Labor Court, 1997 (3) CTC 209 case, the Madras High Court held that commercial establishment receiving the products in bulk and other unpacking such as bulk products pack them according to the customer’s requirements and dispatch such products to customers. Such an act is the manufacturing process within the meaning of section 2(k).
Worker:
According to section 2(l) “Worker” means a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any the manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the union.
In Lal Mohammad v Indian Railway Construction Co Ltd, Appeal (civil) 6069-6073 of 1998 case, the Court held that all the workers employed by the construction company would squarely attract the definition of the term “workmen” a found in Section 2(l) of the Act as they are working for remuneration in the manufacturing process carried out by the project.
Apprentice:
Under Section 2(aa) of the Apprentice Act, 1961 an apprentice means a person who is undergoing an apprenticeship under a contract of apprenticeship. [Section 2(aa)]
Section 18 of the Apprentice Act lays down that every apprentice undergoing apprenticeship training in a designated trade in an establishment shall be a trainee and not a worker and it further states that the provisions of any laws pertaining to Labour does not apply to an apprentice, except certain specified provisions of the Factories Act, 1948, Mines Act, 1952 and Employees’ Compensation Act, 1923 for the welfare of the apprentices (Section 18 r/w Section14 and 16).
If the apprentices are undergoing training in a factory, the provisions of Chapters III, IV and V of the Factories Act, 1948, shall be applicable to them in relation to their health, safety and welfare
Occupier:
According to section 2(n) “occupier” of a factory means the person, who has ultimate control over the affairs of the factory, Provided that-
(i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier;
(ii) in the case of a company, any one of the directors, shall be deemed to be the occupier:
(iii) in the case of a factory owned or controlled by the Central Government or any State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier:
In ION Exchange India Ltd. V. Deputy Chief Inspector of factories, Salem, 1995 (2) CTC 156 case it was held that owner can nominate any person to be in ultimate control over the affairs of a factory. If no one else has been nominated to be in ultimate control over the affairs of the company, Director of a company or any partner of partnership is deemed to be the occupier.
Hazardous Process:
According to section 2(cb) “hazardous process” means any process or activity in relation to an industry specified in the ‘First Schedule where, unless special care is taken, raw materials used therein or the intermediate or finished products, bye-products, wastes or effluents thereof would- (i) cause material impairment to the health of the persons engaged in or connected therewith, or (ii) result in the pollution of the general environment:- Provided that the State Government may, by notification in the official Gazette, amend the First Schedule by way of addition, omission or variation of any industry specified in the said Schedule;
Manufacturing Process:
According to section 2(k) manufacturing process means any process for
(i) Making, altering, repairing, ornamenting, finishing, packing, online, washing , cleaning. Breaking, up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or
(ii) Pumping oil, water. Sewage, or any other substance, or
(iii) Generating, transforming or transmitting power, or
(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book-binding, or
(v) Constructing, reconstructing, repairing, refitting, finishing, breaking-up ship or “vessels, or
(vi) Preserving or storing any article in cold storage.
It is to be noted that to constitute a manufacturing process, there must be some transformation, i.e., the article must become commercially known as something different from which it acquires its existence
In Ardeshir H. Bhiwandiwala v. State of Bombay, AIR 1962 SC 29 case, the Court has to determine whether the processed carried out in Salt works come within the definition of the word ‘manufacturing process’ under Section 2(k) of the Factories Act, 1948. The Court observed: “the conversion of sea water into salt is not due merely to natural forces, but is due to human efforts aided by natural forces. The sea water in the sea never becomes salt merely on account of the play of sun’s rays on it. The natural force of gravity is utilised for carrying sea water from the sea to the reservoirs, thence to the tapavanis and from there to the crystallizing pans which are specially prepared by thumping the mud and making the layer of tile ground hard and water- tight. The solar energy is utilised in evaporating the water in the brine. The human agency is employed for other processes carried on in the Salt Works.” The Court further observed: “It is clear therefore that labourers are employed for
(i) admitting sea water to the reservoirs by working sluice gates, sometimes at night also, or the pump;
(ii) filling crystallizing beds;
(iii) watching the density of brine in the crystallizing beds;
(iv) seeing that the density does not exceed certain limits and that salts other than sodium chloride (common salt) are not formed;
(v) scraping and collecting salt crystals
(vi) grading the salt crystals by ” sieving ” and
(vii) putting salt into gunny bags.
It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water. The, processes carried out in the Salt Works and described above, come within the definition of ” manufacturing process ” inasmuch as salt can be said to have been manufactured from sea water by the process of treatment and adaptation of sea water into salt.”
Some of the processes which have been held to be manufacturing processes are as follows:
- Bidi making [Chintaman Rao v.State of M.P., (1962) SCJ 388].
- Moulding and transformation of raw cinematography films into a finished product [Gemini Studio v. State, (1952-53) 4 FJR 329].
- Work done in a salt work which consists of converting sea-water into salt [Ardeshir H. Bhiwandiwala v. State of Bombay, AIR 1962 SC 29.
- Use of a refrigerator for treating or adapting any article with a view to its sale [New Taj Mahal cafe Ltd. V. Inspector of Factories, (1956) 1 LLJ273].
- Work of compositions in printing business [V. K. Press v. Authority, AIR 1955 All 702].
- Use of electric motor for the purpose of lifting or pumping water [Syed Moosa Kazimi v. K.M. Sheriff, AIR 1959 Mad. 542].
- Process of moistening, stripping and packing of tobacco leaves [V.P. Gopala Rao v. Public Prosecutor, AIR 1970 SC 66].
- Activities of a petrol pump [Gateway Auto services v. Regional director, E.S.I. Corpn., (1981) Lab. I.C. 49].