Tuesday, May 2, 2023

FACTORIES ACT

 

FACTORIES  ACT

The object of the Factories Act is to regulate the conditions of work in manufacturing establishments coming within the definition of the term "factory" as used in the Act.

The first Act, in India, relating to the subject was passed in 1881. This was followed by new Acts in 1891, 1911, 1922, 1934 and 1948. The Act of 1948 is more comprehensive than the previous Acts. It contains detailed provisions regarding the health, safety and welfare

of workers inside factories, the hours of work, the minimum age 6f, ­workers, leave with pay etc. The Act has been amended several times.

The Act is based on the .provisions of the Factories Act of Great

Britain passed in 1937.

In 1976 the Act was amended extensively. The provisions of the Amendment have been quoted and summarised at the appropriate .places in this chapter.

                  APPLICATION OF THE ACT

The Factories Act of 1948 came into force on 1st April 1949; It applies to factories, as defined in. the Act, all over India, including the State of Jammu and Kashmir.

Unless 'otherwise provided, the Factories Act applies to factories belonging to the Central or any State Government.--Sec. 116.

       DEFINITIONS UNDER THE FACTORIES ACT

.Factory. The term Factory is defined in Section 2 (m) of the Act as follows: "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 Indian Mines Act, 1952 (Act 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.-For computing the number of workers for the purposes of this clause all the workers in different relays in a day shall. be taken into account.

[Clause 2(m) as amended in 1976.]

       Under Section 85, the State Government is empowered to declare any establishment  carrying on a manufacturing process to be a factory for the purposes of the Act even though it employs less than the pres­cribed minimum number of workers, provided that the manufacturing process is not being carried on by the owner only with the aid of his family.

Summary: From Sec. 2(m) of the Act it follows that m establishment comes within the definition of a Factory if the condi­tions stated below are satisfied :

1. It is a place where a "manufacturing process" is carried  on.

     2. It employs the prescribed minimum number of "workers"

viz., ten if "'power" is used, and twenty if no "power" is used. It is sufficient if the prescribed number of workers were employed on any day of the preceding twelve months.

3. . It is not a mine coming within the purview of the Indian Mines Act of 1952, a railway running shed, mobile unit belonging to the armed forces of the Union, a hotel, restaurant or eating place.

Manufacturing Process. This term is defined in Section 2(k) in a very wide sense. It iIicludes :

     (i) making, altering, ornamenting, finishing, packing, oiling, washing,    cleaning, breaking up, demolishing, or otherwise treating or adopting 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 (Hi) generating,     transforming or transmitting power; or

(iii)     (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar processes or book binding ; or

(v) constructing, reconstructing, repairing, refitting, finishing or  breaking up    ships or vessels ; or

(vi)            preserving or storing any article in cold storage.

For the corresponding section of the English Act, it was held that the different processes enumerated in the clauses are merely illustrative so that laundries, ,carpet beating, or bottle washing works come within the Act, if mechanical power is used. Patterson v. Hune

The following undertakings have been held to be manufacturing processes-bidi-making; conversion of raw-films into finished products; the preparation of eatables in the kitchen of a restaurant ; use of a  refrigerator for adapting any article with a view to its sale.

The scraping out of salt and grading them, even though done by, manual labour, is a manufacturing process.

Worker. "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 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."-Sec. 2(1), as amended in 1976.

Explanation: Worker means any person engaged in any work connected with or incidental to a manufacturing .process. Thus the definition is wide. The term includes persons engaged directly and, also those who are engaged through an agency (including a con­tractor with or without the knowledge of the principal employer). The term includes clerical workers and persons paid by piece rates in ­a factory.

      The term 'worker' does not include any member of the armed forces of Union. .

                        , ,

, In case of a factory worker there must be a relationship between

the employer and the employed.                             "

      Apprentices, whether remunerated or not, are workers within the meaning of the Act.

Power. "Power means electrical energy, or any other form of energy which is mechanically transmitted and is not generated by human or animal agency."--Sec. 2(g).

Prime mover. "Prime mover means any engine, motor or other appliance which generates or otherwise provides power."--Sec. 2(h).

Transmission machinery. "Transmission machinery means any shaft, wheel, drum pulley, system of pulleys, coupling, clutch,'driving belt or other appliance or device by which the motion of a prime mover is transmitted to or received by any machinery or appliance".--Sec. 2(i).

Machinery. "Machinery includes prime movers, transmission machinery and all other appliances whereby power is generated, transformed, transmitted or applied."--Sec. 2(j).

Adult. "Adult means a person who has completed his eighteenth year of age".--Sec. 2(a).    °

Adolescent. "Adolescent means a person who ha$ completed his fifteenth year of age °but has not completed his eighteenth year."­Sec. 2(b).

Child. ''Child means a person who has net completed his fifteenth year of age." --Sec. 2 ( c) .

Young Person. "Young Person means a person who is either a child or an adolescent."--Sec. 2(d).

Calendar Year. "Calendar Year means the period of twelve months beginning with the first day of January in any year."­

Sec. 2(dd).           °

Day. "Day means a period of twenty four hours beginning at midnight." --Sec. 2 ( e) .

References to the time of the day in the ° Act are to the Indian Standard Time. In areas where the I.S.T. is not observed, the State Government can by rules define the local mean time.--Sec. 3.

Week. "Week means a period of seven days beginning 'at midnight on Saturday night or such other night as may be approved in writing Jar a particular area by the Chief Inspector of Factories." --Sec. 2(f). 

Shift and Relay. Where work of the same kind is carried out by two or more sets of workers working during different periods of the day, each of such sets is called a "relay" and each of such periods is called a "shift."-Sec. 2(r).

Occupier. "Occupier" of a factory means the person who has ultimate control over the affairs of the factory, and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory.--Sec. 2(n).

In case of a ship, which is being repaired or on maintenance work is being carried out in dry dock which is available for hire, the follow­ing persons for certain section of the Act will be deemed to be occupier (i) the owner of the dock, and (ii) the owner of the ship or his agent or master or other officers-in-charge in the ship or any person who contracts with such owner, agent or master or other officers-in-charge to carry out the repair or maintenance work.-Sec. 2(n) added by The Factories (Amendment) Act, 1976.

       The Act imposes several duties and responsibilities on the occupier of the factory. (See below).

An occupier of factory may be an owner, a lessee or a mere licensee but he must have the right to occupy the property. He should also control the management.

APPROVAL, LICENCING AND REGISTRATION

It is necessary to obtain a" licence before a factory is started. Section 6 provides that the State Government may make rules requir­ing, for the purposes of this Act, the submission of plans or any class or description of factories to the Chief Inspector or the State Govern­ment, and the plans and specifications of a factory and its location.

The Amendment of 1976 provides that any replacement and addition to the factory will not be allowed if it does not reduce the minimum clear space required for safe working around the plant or machinery or adversely affect the environmental conditions from the evolution or emission of steam, heat or dust or fumes injurious to health.

 

 

Notice by occupier. Section 7 provides that the occupier of a factory must, at least 15 days before he begins to occupy or use any premises as a factory; send to the Chief Inspector of Factories a written notice containing the following particulars:

( 1 ) the name and situation of factory ;

(2) the name and address of the occupier ;

 (3) the name and address of the owner of the premises or building (including   the precincts thereof) ;

( 4) the address to which communications relating to factory may be sent ;

(5) the nature of the manufacturing process to be carried on in the factory during the next twelve months ;

( 6) the total rated horse power installed or to be installed in the factory, which shall not include the rated – horse power or any separate stand-by plant;

(7) the name of the manager of the factory for the purposes of this Act ;

(8) the number of workers likely to be employed in the factory ;

(9) such other particulars as may be prescribed.

The rules stated above are enforced . because the plans and specifications of the factory must insure proper measures of health, safety and welfare of the workers.

 

                       THE INSPECTI0N STAFF

The Factories Act empowers the State Government to appoint Inspectors, Chief Inspectors of Factories, Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors. Every District

Magistrate is an Inspector for his district. No person can act as an Inspector if .he is or becomes directly or indirectly interested in a factory or in any process or business carried on therein or in any patent or machinery connected therewith.                                    

Powers of Inspectors. Section 9 provides that subject to any rules made in this behalf, an Inspector may exercise the following powers within the local limits for which he is appointed :­

     (a) enter, with such assistants, being persons in the service of the Government or any local or other public authority, as

 he thinks fit, and place which is used, or which he has reason to    believe is used, as a. factory ;

(b) make examination of the premises, plant and machinery;

(c) require the production of any prescribed register and any other document relating to the factory, and take on the spot or otherwise statements of any person which he may consider necessary for carrying out the purposes of the   Act; and .(d) exercise such other powers as may be prescribed for carry­ ing out the purposes of this Act.

       No person shall be compelled under this section to answer any question or give any evidence tending to incriminate himself.

      Under Section 91, an Inspector may take a sample of any subs­tance, used or intended to be used in a factory, for the purpose of finding out whether the substance is injurious and if the factory is violating any of the provisions of the Act.

Obstructing an 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 registers Of other documents in his custody kept in pursuance of this Act or of any ru.!es made thereunder, or conceals or prevents any worker in a factory from appearing before, or being examined by, an Inspector, shall be punishable ~with imprisonment for a term which may extend to three months or with fine which may extend to Rs. 300 or with both.-Sec. 95.         .

The onus is on the prosecution to show that a person has obs­tructed an inspector.

Duties of Inspector. It is the duty of factory inspectors to enforce the provisions of the Factories Act and other industrial laws. For this purpose they inspect factories periodically. If any rule is violated they take steps like prosecuting the guilty persons etc.

CERTIFYING SURGEONS

Section 10 provides that the State Government may appoint quali­fied medical practitioners to be certifying surgeons for the purposes of the Act for specified local areas or for specified factories or class of factories.

No person can be a certifying surgeon for a factory or industry in which he is interested .directly or indirectly.-Sec. 10(3).

The State Government may by order in writing and subject to specified conditions, exempt any person or class of persons from the provisions of this sub-section in respect of any factory or class or description of factories.

 

       Duties. The certifying surgeon has the following duties under the Act and the rules framed under it.

     1. The examination and certification .of young persons.

         2. The examination of persons engaged in factories in dangerous

occupations or processes.                               .

3. Medical supervision of factories in cases where such super­vision had been prescribed owing to the dangerous nature of the work carried on or for any other reason, viz.,

(i) cases of illness have occurred which it is reasonable to believe are due to the nature of the manufacturing process carried on,. or other conditions of work prevailing therein;

(ii) by reason of any change in the manufacturing process carried on or in the substances used therein there is a likelihood of injury to the health of workers employed in that manufacturing process ;

(iii)  young persons are, or about to be employed in any work which is likely to cause injury to their health.

(iv)   

PROVISIONS REGARDING THE HEALTH OF WORKERS

Sections 11 to 20 of the Act contain certain provisions intended to ensure that the conditions under .which work is carried on in fac­tories do not affect the health of the workers injuriously. The  summary of the provi­sions are explained below :

Summary of the provisions of the Factories Act. relating -to the health of workers are stated below.

1. Cleanliness. Every factory shall be kept clean and free from dirt, and the outflow of drains etc. The floors must be cleaned. Drainage shall be provided. Inside walls, partitions and ceilings must be repainted at least once in five years. When washable water paint is used they must be painted once every three years and washed at least every period of six months.-Sec. 11,' as amended in 1976.

2. Disposal of wastes and effluents. The waste materials pro­duced from the manufacturing process must be effectively disposed off-Sec. 12.

3. Ventilation 'and Temperature. There must be provision for adequate ventilation by the circulation of fresh air: The temperature

must be kept at a comfortable level. Hot parts of machines must be

'separated and insulated.-Sec. 13.

4. Dust and Fume. If the .manufacturing process used. gives off injurious or offensive dust and fume steps must be taken so that they are not inhaled or accumulated. The exhaust fumes of internal combustion engines must be conducted outside the factory.--Sec. 14.

5. Artificial humidification. The water used for this purpose must be pure. It must be. taken from some source of drinking water supply. The State Government can frame rules .regarding the process of humidification etc.-8ec. 15.                                                  .

6. OverCrowding. There must be no overcrowding in a fac­tory. In factories existing before the commencement of the Act there must be at least 350 c.ft. (~r 55 cubic metres) of space per worker. For factories built afterwards, there must be at least 500 c.ft. (or 75 cubic metres) of space. In calculating the space, an account is to be taken of space above 14 ft. (or 5 metres) from the floor.-Sec. 16.

7. Lighting. Factories must be well lighted. Effective measures must be adopted to prevent glare or formation of shadows which might cause eyestrain.-sec. 17.

8. Drinking water. Arrangements must be made to provide a sufficient supply of wholesome drinking water. All supply' points of such water must be marked "drinking water". No such points shall be within 20 ft. (or 7.5 metres) of any latrine, washing place etc. Factories employing more than 250 workers must cool the water during the hot weather.-Sec. 18.    .

9. Latrines and Urinals. Every factory must provide' sufficient number of latrines and urinals. There must be separate provision for male and female workers. Latrine and urinals must be kept in a clean and sanitary condition. In factories. employing more than 250 workers, they shall be of prescribed sanitary types.--sec. 19.

PROVISIONS REGARDING THE SAFETY OF WORKERS

Sections 21 to 40A, 40B and 41 of the Act lay down rules for the purpose of securing the safety of workers. Summary of the provisions of the Factories Act regarding the safety of the workers are stated below: (Sections 2l to 41) .

1. Fencing to machinery. All dangerous machinery must be securely fenced e.g., moving .parts- of prime movers and flywheels connected to every prime mover. electric generators. etc.-Sec. 2l.

2. Work on or near machinery in motion. Work on or near machinery in motion must be carried out only by specially trained adult male workers wearing tightly fitting c1othes.-Sec. 22.

3. Employment of young persons’ on dangerous machines. No young person shall work at any dangerous machine' unless he has been specially instructed as to the dangers and the precautions to be observed. has received sufficient training about th~ work. and is under the supervision of some person having thorough knowledge and experience of the machine.-Sec. 23.

4. Striking gear and devices for cutting off power. In every factory suitable devices for cutting off power in emergencies from running machinery shall be provided and maintained in every work­room.~. 24.

5. Self-acting machines. Moving parts of a self-acting machine must not be allowed to come within 45 cms. of any fixed structure which is not part of the machine.-Sec. 25.

6. Casing of new machinery. In all machinery installed after the commencement of the Act. certain parts must be sunk, encased or otherwise effectively guarded e.g.. Set screw, Bolt, toothed gearing etc. -sec. 26.

 

       7. Women and children near cotton Openers. Women and children must not be allowed to work near cot/On openers, except in certain cases.-Sec. 27

8. Hoists, lifts, chains etc, Every hoist and lift  must be so constructed as to be safe. There are detailed rules as to how such safety is to be secured. There are similar provisions regarding lifting machines, chains, ropes and lifting tackle .Sec. 28. 29.

9. Revolving machinery. Where grinding is carried on the maximum safe working speed of every revolving  machinery connected therewith must be notified. Steps must be taken to see that the safe speed is not exceeded.-Sec. 30.

10. Pressure plant. Where any operation is carried on at a pressure higher than the atmospheric pressure, steps must be taken to ensure that the safe working pressure is not exceed~cL-.sec. 31.

. 11. Floors, stairs and means of access. All floors,  steps, stairs, passage and gangways shall be of sound construction and properly maintained. Handrails shall be provided where necessary. Safe means of access shall be provided to the place where the worker will carry on any work.-Sec. 32.

 

 

       12. Pits, sumps, openings in floors etc. Pits, sumps, openings in floors etc. must be securely covered or fenced. Sec. 33.

       13. Excessive weights. No worker shall be made to carry a load so heavy as to cause him injury.-8ec. 34.

14. Protection of eyes. Effective screen or suitable goggles shall be provided to protect the eyes of the worker from fragments thrown off in course of any manufacturing process and from excessive light if any.-Sec. 35.

15. Precautions against dangerous fumes. No person shall be allowed to enter any chamber, tank etc. where dangerous fumes are likely to be present. Unless, it is equipped with a manhole or other means of going out. In such space no portable electric light of more than 24 ,volts shall be used. Only a lamp or light of flame proof construction can be used in such space. For people entering such space suitable breathing apparatus, reviving apparatus etc. shall be provided. Such places shall be cooled by ventilation before any person is allowed to enter.-8ecs. 36 and 36A.

       16. Explosive or inflammable gas etc. where a manufacturing process produces inflammable gas. dust. fume. etc. steps must be taken to enclose the machine concerned, prevent the accumulation of substances and exclude all possible sources of ignition. Extra precautionary measures are to be taken where such substances are worked at greater than the atmospheric. pressure.-Sec. 37.

17. Precaution in case of fire. Fire escapes shall be provided. Windows and doors shall be constructed to open outwards. The means of exit in case of the fire shall be clearly marked in red letters. Arrangements must be made to give warning in case or fire -sec. 38

      18. Specifications of defectives etc. and safety of buildings and machinery. If any building or machine is in a defective or dangerous condition, the inspector of factories can ask fer the holding of tests to determine how they can be made safe. He can also direct the adoption of the measure necessary to make them safe. In case of immediate danger, the use of the building or machine can be prohibited.-Secs. 39. 40.

19. Maintenance of Buildings. If the Inspector of Factories thinks that any building in a factory, or any. part of it. is in such a state of disrepair that it is likely to affect the health and welfare of the workers. he may serve on the occupier or manager or both in writing specifying the measures to be done before the specified date.­ Sec. 4OA.

20. Safety Officers. The State Government may notify to the occupier to employ a number of Safety Officers in a factory (i) wherein one thousand or more workers are ordinarily employed. or (ii) wherein any manufacturing process or operation which involves the risk of bodily injury, poisoning. disease or any other hazard to health of the persons employed in the factory .-Sec. 40B.

21.                Rules. The State Government may make rules providing for the use of such further devices for safety as may be necessary.­ Sec. 41.

 

PROVISIONS REGARDING THE WELFARE OF WORKERS

Summary of the provisions of the Factories Act regarding the welfare of workers are stated below :

1.. Washing. In every factory adequate and suitable facilities for washing  shall be provided and maintained. They shatI be con­veniently accessible and shall be kept clean. There must be separate provisions for male and female workers.-Sec. 42.

2. Storing and drying. The State Government may make rules requiring the provision of suitable facilities for storing and drying clothing.-Sec. 43.

       3. Sitting. Sitting facilities must be provided for workers who have to work in  a standing position. so that they may take rest when possible. When work can be done in a  sitting position efficiently the Chief Inspector may direct the provision of sitting arrangements.­ Sec. 44.

     4. First aid. Every factory must provide first aid boxes or cupboard. They must contain the prescribed materials and they must be in charge of persons trained in first aid treatment. Factories em­ploying more than 500 persons must maintain an ambulance roam con­taining the prescribed equipment and in charge of the prescribed medical and nursing staff-Sec. 45.

5. Canteens. Where more than 250 workers are employed. the state Government may require the opening of canteen or canteens for workers. Rules may be framed regarding the food served. its manage­ment etc.,..-Sec. 46.

6. Shelters. In every factory where more than 150 workers are employed there must be provided adequate and suitable shelters or rest. rooms and a lunch room (with drinking water supply) where workers may eat meals brought by them. Such rooms must be suffi­ciently lighted and ventilated and must be maintained in a cool and clean condition~. The standards may be fixed by the State Government. -Sec. 47,

      7. Creches. In every factory where more than 30 women a employed, a room shall be provided for the use of the children (below 6 years) of such women. The room shall be adequate size. well lighted and ventilated, maintained in a clean and sanitary condition and shall be in charge of a woman trained in the care of children and infants. The standards shall be laid down by the State Government.­Sec. 48.

      8. Welfare officers. Welfare officers must be appointed in every factory where 500 or more workers are employed. The State Govern­ment may prescribe the duties, qualifications etc. of such officers.­ Sec. 49.

9. Rules. The State Government may make rules regarding the welfare of workers.-Sec. 50.

THE WORKING HOURS OF ADULTS

     Weekly Hours. No adult worker shall .be required or allowed . to-work in a factory for more than forty-eight hours in any week.­ Sec. 51.

Daily Hours. No adult worker shall be required or allowed to work in a factory for more than nine hours in any working day. The daily maximum may be exceeded with the previous approval of the Chief Inspector, to facilitate change of shifts.-Sec. 54.

       Intervals for Rest. The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours arid that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour. The State Government or the Chief Inspector may, by order in writing, and for reasons stated therein, increase the work period to six.-Sec. 55.

Spreadover. The periods of work of an adult worker in a factory shall be arranged that inclusive of his intervals for rest under section 55, they shall not spread-over more than ten and half hours in any day. The Chief Inspector may for specified reasons increase the spreadover up to twelve hours.-Sec. 56.

RULES REGARDING EMPLOYMENT OF ADULTS

     Night Shifts. Where a worker in a factory works on a. shift which extends beyond midnight, (a) his weekly holiday and compen­satory holiday means a period of holiday for 24 consecutive hours beginning when his shift ends, and (b) the following day for him shall be deemed to be the period. of 24 hours beginning when such shift ends and the hours he has worked after midnight shall be counted in he previous day.-sec. 57

Overlapping Shifts. Work shall not be carried on in any factory by means of a system of shifts so arranged. that more than one relay of workers is engaged in work of the same kind at the same time. The State Government or the Chief Inspector may grant exemption from this rule.-See. 58.

Double Employment. No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save In such circumstances as may be prescribed.-Sec. 60.

       Notice of Periods of Work. There must be displayed in every factory a notice showing periods of work of adults, classification of workers in groups according to nature of their work, shifts and relays  etc. Change made in the system of work must be notified to the Inspector before change. The manager of every factory must maintain a Register of Adult Workers showing the name of each worker, the nature of his work, the group in which he is included, the relay in which he is allotted etc. The hours of work of an adult worker- must correspond with the notice referred to above and the Register.- Sections 61, 62, 63.

No adult worker shall be required or allowed to work in any factory unless his name and other particulars have been entered' in the register of adult workers.-Sec. 62 (1A) added by the Factories (Amendment) Act, 1976.

Exemptions. By sections 64 and 65, the State Government has been given power to exempt for limited periods certain factories from compliance with some of the provisions relating to hours of work and employment. ­

                                                       Such exemptions are necessary in special cases, for example in the case of workers engaged in urgent repairs or in preparatory and complementary work. In some industries work if of an intermittent character and the enforcement of all the rules stated above will create hardship. The nature of the work in  certain industries requires exceptional treatment, e.g., workers. engaged in engine rooms and boilers or in the printing of newspapers. The State Government may exempt persons holding positions of supervision and management or in confidential positions in a factory from the operation of the rules regarding working hours (except the rule against the employment of women at night).  .

       Confidential Position. The State Government may empower the Chief Inspector to declare a person other than any person defined by such rules, as a person holding position of supervision or management or employed in .a. confidential position in a factory, if, -the Chief Inspector is of opinion that he can be employed.

If any such person does not get more than Rs. 750 p.m. as wages. he will be entitled to extra wages for overtime work.-Sec. 64(1). add~d by The Factories (Amendment) Act, 1976.

Hours and Spreadover. Any exemption granted under Sec. 65 (2)

shall be subject to the following conditions, namely :­

(i) the total Lumber of hours of work in any day shall not exceed twelve ;

(ii) the spread over. inclusive of intervals for rest, shall not exceed thirteen hours in any one day ;

(iii) the total number of hours of work in any week. including overtime, shall not exceed sixty ;

(iv) no worker shall be allowed to work overtime, for more than seven days at a stretch and the total number of hours of overtime work in any quarter shall not exceed seventy ­five-Sec. 65(3), Factories (Amendment) Act, 1976.

Quarter. This is a period of three consecutive months beginning on the 1st January, the 1st of April, the 1st of July or the 1st of October.-Sec. 64.

RESTRICTIONS ON THE EMPLOYMENT OF WOMEN

By section 66 the following restrictions have been imposed to

women workers :

(a) Maximum daily work is 9 hours: No exemption from the provisions of Section 54 (which lays down that the maximum daily hours of work shall be nine hours) can be granted in respect of any women.

       (b) prohibition of night work: No women shall be required or­ allowed to work in any factory except between the hours of 6 a.m. and 7 p.m. The State Government may by notification in the official Gazette vary the limits for any factory or group or class or descrip­tion of factories. But such variation must not authorise the employ­ -ment of women between the hours 10 p.m. and 5 a.m.                                     .

       (c)   Change of shift only after holiday:There shall be no change of shifts for women except after a weekly holiday or any other holiday.

Exception: There is an exceptional case. The State Government may make rules providing for the exemption from the afore~aid restrictions (wholly or partially or conditionally) of women working in fish-curing or fish-canning factories. In factories, mentioned above, the employment of women beyond the hours specified is necessary to prevent damage to or deterioration in any raw material. But such rules shall remain in force for not more than three years at a time.

       Other restrictions: There are other restrictions on the employ­ ment of women workers :

     1. Work on or near machinery in motion. No woman or young person shall be allowed to clean, lubricate or adjust any part of the machinery while the prime mover or transmission machinery is in motion or to work between moving parts, or between fixed and moving parts of any machinery which is in motion.-Sec. 22(2}. (See p. 16.)

2. Cotton openers. No woman or child shall be employed in any part of a factory for pressing cotton in which a cotton opener is at work. If the feed-end of a cotton opener is in a room separated from the delivery-end by a partition extending to the roof or to such height as the Inspector may in a particular case specify in writing , women and children may be employed on the side of the partition where the feed-end is situated.-Sec. 27. (See p. 18.)

3. Excessive weights. The State Government may make rules prescribing the maximum weights .which may be lifted, carried. or moved by adult men, adult women, adolescents and children employed in factories or in any class or description of factories or in carrying on any specified process.-Sec. 34. (See p. 21.)

4. Creches. In every factory wherein more than thirty women workers are ordinarily employed there shall be provided and main­ tained a suitable room or rooms for the use of children under the age of six years of such women.-Sec. 48. (See p. 30.)

5. Dangerous operations. The State Government is empowered to make special rules for the purpose of controlling and regulating factories which carry on operations exposing women, young persons and other workers to a serious risk of bodily injury, poisoning or disease.-Sec. 87 (b). (See p. 43.)

 

EMPLOYMENT OF YOUNG PERSONS

 

Employment of ChiIdren . No child who has not completed his fourteenth year shall be required or allowed to work in any factory.--sec. 67.

Certificate of Fitness and Token. A child who has completed his fourteenth year or an adolescent shall not be required or allowed to work in any factory unless (a) he has been granted a certificate of fitness. which is. in the custody of  the manager, and (b) such child or adolescent carries a token giving a reference to such certificate-­Sec. 68.

The Certificate of Fitness is a certificate granted to a child or adolescent by a Certifying Surgeon after. examination: The certificate is. given to a child if the surgeon is satisfied that he has completed his fourteenth year and has attained the prescribed physical standards. The certificate is granted to an adolescent if the surgeon is satisfied that he has completed his fifteenth year and is fit for a full day's we in a factory. The certifying surgeon must have personal knowledge of the intended place of work and of the manufacturing process involved. The certificate is valid only for a period of 12 months. It may be granted  subject to conditions (e.g., that of periodical re-examination). The

certificate may be renewed and, if necessary, revoked. Any fee pa: able for the certificate must be paid by the occupier of the factory all must not be recovered from the young person or his parents c guardian.-Sec. 69.

      An adolescent who has been granted a certificate of fitness ant who carries a token is deemed to be an adult for the purposes of Chs. VI and VIII of the Act. (Ch. VI deals with the hours of work of an adult and Ch. VIII deals with "annual leave). But no adolescent who has not attained the age of seventeen years shall be employed or permitted to work in any factory during night. "Night" means a period of at least 12 consecutive hours which shall include an interval of at least seven consecutive hours falling between 10 p.m. and 7 a.m. An adolescent who has not been granted a certificate of fitness, shall  be deemed to be a child ~or the purposes of the Act,-Sec. 70.

      Working hours for Children. The law regarding working hours for children are stated below.-Sec. 71 :

1. No child shall be employed or. permitted to work in any factory- '

        (a)  for more than four and a half hours in any day;

        (b) during the night, .

Explanation: For the purpose of this sub-section "night" shall mean a period of at least twelve consecutive hours which shall include the interval between 10 p.m. and 6 a.m.

2. The period of work of all children employed in a factory shall be limited to two shifts which shall not overlap or spread-over more than five hours each, and each child shall be. employed in only one of the relays which shall not, except with the previous permission in writing of the Chief Inspector, be changed more frequently than once  in a period of thirty days.

3. The provisions of section 52 shaIl apply also to child workers, and in respect of any child. (Sec. 52 relates to weekly holidays. See next ' Section).

4. No child shall be required or allowed to work in any factory on any day on which he has already been working in another factory.

       Notice and  Register. A notice must be displayed showing clearly the periods of work of children.-,-Sec. 72.

     The manager of every factory must maintain a Register of child workers showing the name of. each child worker, the nature of his work. the group (if any) in which he is included. the relay to which he is allotted and the number of his certificate of fitness.-Sec. 73.

No child worker shall be required or allowed to work in any factory unless his name and other particulars have been entered in the register of child workers.-Sec. 73 (IA). Factories (Amendment) Act, 1976.

       The hours of work of a child must correspond with the Notice and the Register.-Sec. 74.

       Medical Examination. Where an Inspector is of opinion that a person working as an adult is a young person, or that a young person is not fit to work, he may direct the manager of the factory to. have the person medically examined by a certifying surgeon.--Sec. 75.

Other rules regarding the employment of young persons. No young person shall work at any dangerous machine unless he has been fully instructed as to. the dangers arising in connection with the machine and the precautions to be observed, and (a) has received sufficient training in work at the machine or (b) is under adequate supervision by a person who has a thorough knowledge and experience of the machine. The State Government is to. prescribe what machines are dangerous far the purpose of this section.-5ec. 23.

Certain restrictions an adolescents and children are stated in Sections 22(2), 27, 34 and' 87 (b). (See pp. 34-5).

The State Government may make rules regarding the farms of the Certificate of Fitness, the procedure relating to. their issue, and the physical standards to. be attained by children and adolescents.­ Sec. 76.

The provisions relating to. the employment of young persons shall be in addition to and not in derogation of, the provisions of the Children Act of 193~., 1960 and 1978.-Sec. 77.

CHILD-LABOUR

Rules regarding child-Iabour are contained in the Factories Act, Mines Act etc. There are also. two. general Acts an the subject. The Children (Pledging of Labour) Act (Act 11 of 1933) prohibits the making of  agreements to. pledge the labour of children and the employ­ment of  children whose labour has been pledged.  The Children Act of 1938, 1960 and 1978 prohibit the employment of a child who. has not completed  his fifteenth year of age in any occupation connected with the transport of passengers, goods or mails by railway or con­ -nected with a part authority Within the limits of any part. The Act also prohibits the employment of a child, who. has not completed his fourteenth year of age, in the processes set forth in the schedule to the Act. Children between 15 and 17 can be employed subject to certain restrictions as regards their periods of rest etc

 

HOLIDAYS AND LEAVE

The Factories Act provides for the following holidays, viz.,Weekly holidays, Compensatory holidays and Annual leave with wages according to certain rules. The provisions are explained below.

Weekly Holidays. Section 52 provides that an adult workers shall have a holiday on the first day of the week. But the manager of the factory may fix the holiday on any other day which is with three days before or after the first day of the week in case of such substitution, notice must be given to the Inspector of Factories an displayed in the factory. No substitution can be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day. The State Government may make rules providing for exemption from the above section in certain cases, e.g., for urgent repairs.

The Weekly Holidays Act (Act XVIII of 1942) provides for the grant of weekly holidays to persons employed in shops, restaurants and theatres. The Act ,can be applied to a State by notification of the State Government.

Compensatory Holidays. Where as a result of the exemption of  factory from the operation of the role regarding weekly holidays, a worker is deprived from any weekly holiday he shall be allowed within the month in which the holidays were due, or within two months immediately following that month, compensatory holidays of equal number to the holidays lost.--Sec. 53.

Annual Leave with Wages. Sections 78 to 84 provide for the grant of a certain period of leave with wages to workmen.

Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subse­quent calendar year, leave with wages for a number of days calculated at the rate of

                   (i) if an adult, one day for every twenty days of work per­formed by him during the previous calendar year;

                   (ii) if a child, one day for every fifteen days of work performed  by him during the previous calendar year.

Rules. Rules regarding the Annual Leave are summarised below :

1. When counting the number of days of work performed by a worker, the following are to be included: (a) days of lay-oft, (b) maternity leave to a female worker, not exceeding twelve weeks, and (c) the leave earned in the previous year. But the worker shall not earn leave for. these days.

2. The leave admissible under the aforesaid rule shall be exclu­sive of all holidays whether occurring during or at either end of the period of leave.

3. A worker whose service commences otherwise than on the first day of January shall be entitled to leave ,with wages at the rate laid down above if he has worked for two-thirds of the total number of days in the remainder ?f the calendar year.                                      

4, If a worker is discharged or dismissed from service of quits his  employment or is superannuated or dies while in service, during the course  of the calendar year, he or his heir or nominee, as the case may be, shall be entitled, to wages in lieu of the quantum of leave to which he was entitled Immediately before his discharge, dismissal,quitting of employment, ,superannuation or death calculated at therates specified in sub-section (1)even If he had not. worked for the entire period specified In sub-section (J) or sub-section (2) making him eligible to avail of such leave. Such payment shall be made­

(i) where the worker is discharged or dismissed or quits

employment-before the expiry of the second working day from the date of such discharge, dismiss~l or quitting; and

(ii) where the worker is superannuated or dies while in service -before the expiry of two months from the date of such superannuation or death. (Amended by the Act of 1976).

5, In calculating the leave period, fraction of leave for half a day or more shall be treated as one day and fractions of less amount shall be omitted.

6. Leave earned, but not taken, can be carried forward to a succeeding year subject to a limit of thirty days in the case of an adult and forty days in the case of a child. But earned leave not allowed because of any. scheme for leave in operation, can be carried forward without limit.

7. Application for leave must be submitted to the manager not less than 15 days before the date of commencement of leave. In the case of public utility service it must be made not less than 30 days before such date. If a worker becomes ill and wants to avail himself of the annual leave during the period of illness, he shall be granted leave even though the application is not made before the period speci­fied above.

8. The application for leave may be for the whole of the leave due or part of it. But earned leave cannot be taken more than three times during the same year. .

9. For the purpose of ensuring the continuity of work, the occupier or manager of the factory may draw up a Scheme for regu­lating the grant of leave. The Scheme must be agreed to by the 'Works Committee, if any, or the representatives 6f workers. It must be lodged with the Chief Inspector and displayed in the factory. .

10. An application for leave submitted in proper time shall not

Be refused  unless the refusal is in accordance with any leave scheme in operation.

11. The un availed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal

12. The State Government may exempt a factory from the operation of the above rules if it is satisfied that its own leave rules provide benefits (the totality - of benefits) which are not less favourable to the workers than the statutory leave rules.

13. Where by virtue of any award, agreement (including settlement) or contract of service the worker is entitled to a longer period of leave than that provided by the aforesaid rules, he will be entitled such longer leave.

14. The rules contained in these sections do not apply to railway Factory administered by the Government which are governed by leave rules approved by the Central Government.

15. If an award, agreement (including settlement) or contract of Service provides for a longer annual leave with wages than provided in this chapter, the quantum of leave, which the worker shall be enti­tled to, shall be in accordance with such award, agreement or con­tract of service, but in relation to matters not provided for in such .award, agreement or contract of service or matters which are provided for less favourably therein, the provisions of sections 79 to 82, so far , as may be, shall apply. (Added by the Amendment of 1976).t

Wages during Leave Period. For the period of leave allowed to a worker according to rules, he shall be paid at a rate equal to the daily average of his total full-time earnings for the days on which he actually worked during the month immediately preceding his leave~The average rate is to be calculated, exclusive of any overtime and bonus, but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of food-grains and other articles. The cash equivalent, referred to above, is to be computed according to the method used when calculating the extra wages payable -for overtime work. (See. post)-Sec. 80.

lf the employment of a worker who is entitled to leave is terminated by the occupier of the factory before he has taken the entire leave to which he is entitled, he must be paid wages for the leave period not taken and such wages must be paid before the expiry of  the second working day after such termination. Similarly, if the worker quits his service after having applied for and obtained leave, he must be paid wages (or the leave period and such wages must be paid on or before the next pay day. '!be amount of wages payable is to  be calculated according to the provisions of Section 80.-Sec. 79(11) .

A worker who has been. allowed leave for not less than four days in the case of an adult and five days in the case of a child, shall before his leave begins, be paid the wages due for the period of leave allowed.-Sec. 81.

Wages -for the leave period, if not paid by an employer, shall be recoverable as delayed wages under the provisions oo the Payment of Wages .Act, 1936.-Sec. 82.

EXTRA WAGES FOR OVERTIME

( 1 ) Where a worker works in a factory for more than nine hours in  any day or for more than 48 hours in any week, he shall in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.-Sec 59(1)

      (2) For the purpose of sub-section (1), "ordinary rate of wages means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.-Sec. 59(2).

(3) Where any workers in factory are paid on a piece rate basis, the time rate of their work will include the following rules:

(i) if the workers bad been paid on the same or identical job during a month immediately preceding a month during which overtime work was done, the time rate shall be deemed to be equivalent to the daily average of their full­time earnings for the days of the overtime work. Also such time rates shall be deemed to be the ordinary rates of wages of those workers.

(ii) In the case of a worker who had not worked in the imme­diately preceding calendar month on the same or identi­cal job, the time rate shall be deemed to be equivalent to the daily average of the earning of the worker for the days on which he actually worked in the week in which the overtime work was done.

Explanation.-For the purposes of this sub-section in computing the earnings for the days on which the workers actually worked, the allowance include the cash equivalent in order to buy food grains and other articles through concessional sale as  the worker is for the time being entitled to.

Exception.-But any bonus or wages for overtime work payable in relation to the. period with reference. to which the earnings are being computed shall not be included.-Sec. 59(3).

[Clauses (2) and (3) were substituted from the old Act by the Amendment of 1976].                                       '.

(4 )The cash equivalent of the advantage accruing through the­ concessional sale to a worker of foodgrains and other articles shall be computed as often as may be prescribed on the basis of the maxi­ mum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1.-"Standard family" means a family consisting of the worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2.- "Adult consumption unit" means the consump­tion unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that or a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit.­ Sec. 59(4).

(5) The State Government may make rules prescribing­

(a) the manner in which the cash equivalent of the advantage

             accruing through the concessional sale to a worker of food­ grains and other articles shall be computed; and

  (b) the register~ that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section.-Sec. 59(5).

WAGES AND SALARY

Both these terms are used to denote payment made for service. In Stroud's ludicial Dictionary, the following comments are made; "Where the engagement is for a period, is permanent or substantially permanent in character, and is for other than. manual or relative un­skilled labour, the remuneration is generally called a salary." "... in general, the. word 'salary' 'is used for payment of services of a higher class,and 'wages' is confined to the earnings of labourers and artisans.

The High Court of Madras was of opinion that if the remunera­tion is  to be paid daily or weekly it can be called Wages; but where there is monthly payment and is fairly high, considering the general standard of payment, it is to be called Salary. According to the Pay­ment of Wages Act any amount over Rs. 200 (now Rs. 1000) may be considered as Salary for the purposes of Factories Act. Re Gemini Studio.1 (See ch. 7).

"Conceptually there is no difference between salary -and wages both being a recompense for work done or services rendered, though ordinarily the former expression is used in connection with services of non-manual type while the latter is used in connection with manual services." Gestetner Duplicators Pvt Ltd. v. The Commissioner of Income Tax W B . In this judgment the following cases were cited and approved, MohmeddIli v. Union of India; Gordon v. Jennings.

In the cases mentioned above, and .also in Stroud's dictionary, iwas held that there is no basic difference between salary and wages.

                     OBLIGATIONS OF WORKERS

Section 111 lays down that no worker in a factory­

(a) shall wilfully interfere with or misuse any  appliance, convenience or other things provided in a factory for the purpose of securing the health, safety or welfare of the workers therein,

                    (b) shall wilfully and without reasonable cause do anything likely to          endanger himself or others; and

                  (c) shall wilfully neglect to make use of any appliance or other thing       provided in the factory for the purposes of securing the health or .              safety of the workers therein.

If any worker contravenes any of the previsions of this section or of any rule or order made there under he shall be punishable with imprisonment which may extend to 3 mcnths or with fine which may extend to Rs. 100 or 'with both.

OTHER PROVISIONS OF THE FACTORIES ACT

      A brief summary is given below of the other provisions of the

Factories Act.

Departments as Factories. The State Government may, upon application, declare that for the purposes of the Act, different depart­ments or branches of a factory shall be treated as separate factories or that two or more factories of the occupier shall be treated as the same factory.--Sec. 4. .

Exemption during Public Emergency. Factories or any class of factories may be exempted from the operation of any of the provi­sions of the Act during a public emergency (except that of Sec. 67, employment of children) for such periods and subject to such condi­tions as the Government may think fit. The exemption is to. be made by notification in the official Gazette for a period not exceeding three months at a time.-Sec. 5.

Explanation.-For the purposes of this section ~'public emergency'" means a grave emergency whereby the security of India or of any part

of the territory thereof is threatened, whether by war or external aggression or internal disturbance.-Amendment of 1976.

Exemption of Public Institutions. The State Government may exempt subject to such conditions as it may consider necessary, any workshop or workplace where a manufacturing process is carried on and which. is attached to a public institution maintained for the pur­poses of education, training, research or reformation from all or any of the provisions of the Act.. But no exemption is to be granted from the provisions relating to hours of work and holidays unless there is a scheme relating to such matters containing rules not less favourable to the workers than the provisions of the Act.-Sec. 86.

Dangerous Operations. The State Government is empowered to make special rules for the purpose of controlling and regulating factories which carry on manufacturing process or operation exposing workers to a serious risk of bodily  injury, poisoning or disease.­ Sec. 87. Rules have be,en made providing for medical examination, protection of workers; restricting' and controlling the use of parti­cular materials and processes ; payment of fees for medical examination  by the occupier ; welfare amenities ; sanitary amenities ; measures to avoid imminent danger of poisons or toxicity.

Notifiable Accidents. (1) The manager of a factory must send a notice to the authorities whenever an accident occurs which causes death or which causes bodily injury preventing the worker from work­ing for a Period of 48 or more hours or other types of injury which may be specified by rules.

(2) Where a notice given under sub-section (1) relates to an accident causing death, the authority to whom the notice is sent shall make an inquiry into the occurrence within one month of the receipt

of the notice or, if such authority is not the Inspector, cause the

Inspector to make an inquiry within the said period.    .

(3) The State Government may make rules for regulating the procedure at inquiries under this section.--Sec. 88.

      [Paras 2 and 3 had been added by the Amendment of 1976].

Notice of certain dangerous occurrences. Where in a factory any dangerous occurrence of such nature as may be pr€scribed occurs, whether causing any -bodily injury or disability or not, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.--Sec. 88A, Factories (Amendment) Act, 1976.                                                      ­

Notifiable Diseases. The manager of a factory must send notice to the authorities _ whenever a worker contacts any -of the diseases mentioned in the Schedule to the Act. (These are known as Occupa­tional Diseases. Examples: poisoning by lead, mercury, phosphorus etc.; anthrax; silicosis; cancer of the skin; toxic anaemia or jaundice; etc.). The medical practitioner attending the person, if any, shall without delay send a report to the Chief Inspector in writing, stating "the name of the person affected and other particulars.--Sec. 89.

Enquiry into Accidents and Diseases. The State Government may appoint a competent person to enquire into the causes of any 'accident occurring in a factory or of a notifiable disease, and may also appoint one or more persons possessing legal or special know­ledge to. act as assessors in such enquiry. The person appointed to enquire can call witnesses like a Civil Court and exercise any of the powers of an Inspector. He must submit a report to the State Government, together with his observations. The report or extracts therefrom may be published.-Sec. 90.

Safety and Occupational Health Survey. The State Govern­ment or the Director General of Factory Advice Service  and Labour Institutes etc., can employ the Chief Inspector and certain other persons to undertake safety and occupational health surveys. The occupier and manager and all other persons shall afford all facilities for such survey, including examination, testing of plant and machinery, collection of samples, other data, medical examination of persons calculation of wages and extra wages for overtime work.-Sec. 91A, added by The Factories (Amendment) Act, 1976.

Penalties and Procedures. Sections 92 to 1.06 lay down the rules regarding penalties for offences against the Act.

Owner: The owner of any premises, let out for use as different factories, is responsible for the provision and maintenance of com­mon facilities and 'Services, e.g., approach roads, drainage, water supply, latrines etc.

Occupier : In most cases the occupier of the factory is responsible for offences committed against the Act. But the occupier is exempted from liability if he can show that he has used due diligence to enforce the execution of the Act and that some other person committed the offence without his knowledge, consent or connivance.

 

Penalties: The penalties for some of the offences are mentioned below

 

      Offences                                              Imprisonment                             Fine

Obstructing Inspector                                Up to 3 months and/or Up to Rs 500/-

Wrongfully disclosing re­sult

of analysis of  sample                                              --do

Contravention of any duty

or liability by a worker                                           nil                                 Rs 20/-                      

Using false certificate of

fitness                                                       Up to 1 month.                           Rs 50/-       

Permitting double

em­ -ployment of child                                       nil                                       -do-

Cases not otherwise

pro­vided for          .. Up to 3 months     "     "             Rs. 2000

Second offence for above" 6 months     . "    "              Rs. 5000

 

Where contravention of any of the provisions of Chapter IV or any rule made thereunder or under Section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than one thousand rupees in the case of an accident causing death, and five hundred 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 any phalanges. of the hand or foot.-Sec. 92 added in the Amendment of 1976.

Cognizance: No court can take cognizance of an offence under the Act except on a complaint. by or with the previous sanction of an Inspector in writing. Only a Presidency Magistrate or a Magistrate of the first class can try offences under the Act. The. complaint must be filed within 3 months of the date when the commission of the offence came to the knowledge of an Inspector. For disobeying a written order of an Inspector, complaint may be filed within 6 months of the date when the offence was committed.

Presumption: A person found in the factory when the factory . is going on or the machinery is in motion, except during the time of meal or rest, is presumed to be employed in the factory until the contrary is proved.

When in the opinion of the' Court a person is prima facie under­age, the burden shall be on the accused to show that such person is not under-age.

 Appeals. The manager or the occupier of a factory on whom an order in writing has been served by an Inspector can appeal against it to the prescribed 'authority within thirty days.-Sec. 107.

Notice. In certain cases (prescribed by the rules) abstracts of the Act and the rules are required to be displayed in the factory. All notices under the Act must be displayed in English and in a language understood by the majority of the workers employed therein. They must be displayed in a conspicuous and convenient place at or near the main entrance of the factory and must be maintained in a clean and legible condition. The Chief Inspector may require the display of posters relating to the health, safety and welfare of workers. -Sec. 108.

       Returns. The owners, managers and occupiers of factories are required by rules to submit various returns and reports.-Sec. 110.

Power of the Central Government. The Central Government may' give directions to a State Government as to the carrying into execution of the provisions of the Act.-Sec. 113.

Abolition of Contract Labour. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Contract Labour (Regulation and Abolition) Act, 1970.­Sec. 119, added by the Factories (Amendment) Act, 1976.

 

 

                                       -------

DEED OF PARTNERSHIP

 

THIS DEED OF PARTNERSHIP Is made at … on this… day of… Between M/ s X & Co. a partnership firm consisting of (1)… (2)… (3)… partners and carrying on business at … hereinafter referred to as the Party of the First Part and M/s. AB & Co. a partnership firm consisting of (1)… (2) … (3)…. (4)…. as partners and carrying on business at … hereinafter referred to as the Party of the Second Part, as follows

WHEREAS the Party of the First Part Is carrying on business at … and the business consists of ……………………

AND WHEREAS the Party of the Second Part is carrying on business at… and the business consists of ……………….

AND WHEREAS the parties hereto have proposed to commence and carry on a third business In partnership on the following terms and conditions and have proposed to execute this Deed.

NOW IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

1. The parties hereto agree to carry on the business hereinafter mentioned in partnership on the terms and conditions herein mentioned, in the name and style of M/s ……………….

2. The Partnership shall commence from the …. day of …. 1X … and the period of the partnership shall be for three years from the date hereof.

3. The business of the partnership (hereinafter referred to as the ‘Firm’) shall consist of … only and no other business shall be undertaken by the Firm except by mutual consent of all the partners.

4. The Office of the partnership shall be at … The parties may open branches at such other places as they may be agreed upon.

5. Each of the parties of the First and Second Parts have contributed towards the initial capital of the firm a sum of Rs… In equal … shares. The partners will contribute such further amounts towards the capital of the firm in equal …. shares as may be required from time to time. If any party of the First or Second Part or any partner of any of the said partnership individually shall contribute more amount than its share in the capital, it will be treated as a loan by that party to the Firm. The amounts of capital contributed or loans advanced by any partner or partners will carry Interest at the rate of 14% per annum or at such maximum rate as may be allowable as deduction from gross Income under the Income Tax Act for the purpose of calculating taxable income.

6. The net profits and losses of the firm will be shared by the parties of the First and Second Parts in equal shares or proportion. Net Profit will mean the gross profits earned in such year less the expenses of the management of the business including the rent of the premises of the firm Including outgoings In respect of the salaries and wages of the staff, commission paid to others, and all other expenses incurred In connection with the business. The share in the net profits and/or losses of each partner of the First Part and of the Second Part will be shared or distributed among the partners of each of the partners of the First and Second Part according to the partnership agreements between the partners of each of the parties hereto of the First and Second Part recorded in the deeds of partnership of their respective partnerships above mentioned.

7. The accounting year of the Firm will be from 1st April to 31st March of each Christian calendar year.

8. At the end of each accounting year an account of the business carried on by the Firm In that year will be made and a statement of accounts namely a Balance Sheet and Profit and Loss Account will be prepared and signed by the authorised representatives of each party hereto. If necessary or required by law the accounts will be got audited by a Chartered Accountant.

9. The Books of account and all other record of the firm will be always kept at the office of the Firm and will be open for inspection by any of the authorised representatives of the parties hereto at any time.

10. Each of the Party of the First and Second Part will be represented by any partner of that party duly authorised by the other partners of that party from time to time, and the authorised representatives alone will be entitled to attend to the business of the firm and the other partners of that party will not Interfere in the business of the Firm. The true copies of the resolutions of the partners of each of the Parties of the First and Second Part appointing their respective representatives, duly signed by all the partners of that party will be kept in the records of the Firm. The representative so appointed will act as the working partner for the accounting year for which he will be appointed as representative of his Firm. The working partners will be entitled to remuneration at the maximum rate allowable as deduction from gross income under the Income Tax Act for taxable income.’ Such remuneration may be drawn every month or periodically as may be agreed upon. the aggregate drawn in a year not exceeding the maximum limit mentioned above.

11. In the event of any difference of opinion between the two authorised representatives, on any question relating to the business of the Firm the matter will be placed before a joint meeting of all the partners of each of the parties hereto of the First and Second Part and discussed. But the matter will not be decided on the basis of majority of the partners of both the partnerships but only on the mutual consent of all the partners.

12. Each of the Parties of the First and Second Part hereto will be entitled to change the constitution of its partnership by taking additional partner or partners in place of those retiring from the partnership or by reason of death or insolvency of any partner. but such change will be notified to the other Party hereto from time to time.

13. The expressions Party of the First Part will therefore mean and include the partners or partner for the time being of that partnership and the expression “Party of the Second Part” will also mean and include the partner or partners for the time being of that partnership. But no change In the constitution of the party of the First Part or the party of the Second Part will affect the terms and conditions of this Deed. All partners each of the party hereto for the time being shall be deemed to be partners of this Firm and the half share in the profits and losses of the Firm will shared by the parties of each of the Parties hereto In proportion to their shares in their respective firms being the Parties of the First and the Second Part hereto.

14. Each of the Party of the First Part and Second Part will be entitled to carry on its own business but none of them will carry on said business undertaken by this partnership, directly or indirectly during the continuance of this partnership.

15. All the working staff such as clerks. peons. accountants, cashier, salesmen and others will be appointed by the joint consent of the authorised representatives of the parties hereto and their wages and salaries and other emoluments will be fixed by mutual consent of the authorised representatives.

16. Each of the Party hereto through its authorised representative shall-

(a) participate and attend to the business of the firm to the greatest common advantage of the firm.

(b) be just and faithful to each other.

(c) render true accounts and full information of all moneys affecting the Firm to the other.

(d) indemnify the Firm for any loss caused to it by wilful negligence or fraud In the conduct of the business.

(e) Not carry on any business similar to the business of the Firm anywhere without the consent of the other party.

(f) attend to the business of the Firm diligently and actively.

(g) Not withdraw any amount for his own or his partnerships benefit or use as remuneration or otherwise without the consent of the other Party hereto.

(h) be entitled to be indemnified by the Firm in respect of payment made and liabilities incurred by him – (i) in the usual and proper course of business of the Firm and (ii) in doing any act for protecting the Firm from loss in emergency.

17. All the tangible and Intangible assets of the Firm including the goodwill, stock-in-trade, benefit of business licenses and permits. benefits of contracts entered etc. will belong to the parties of the First & Second Parts in equal shares and the property of the Firm shall be used by the parties exclusively for the business of the firm.

18. Every Party shall account for the profit earned from any transaction of the Firm or for the use of the property in business transaction of the Firm.

19. Any Party of the First or Second Part or any partner thereof shall not. without the consent of the other –

(a) submit any dispute with any other person to arbitration or com- promise or relinquish the claim.

(b) withdraw any suit or legal proceedings filed by the Firm.

(c) admit any liability of the Firm.

(d) acquire or dispose of any immovable or moveable property, except the stock in trade in the ordinary course of business.

(e) enter Into partnership or other business unilaterally with any other person.

(f) assign or transfer his share or any interest in the Firm.

(g) admit any person as a partner in the Firm.

(h) borrow any moneys for or in the name of the Firm, or create any security or charge on the assets of the Firm.

(i) enter into any contracts except contracts in the regular course of business of the Firm.

(j) stand as a guarantor or surety for any person in the name of the Firm or for and on behalf of the Firm.

20. The parties shall open in the name of the Firm one or more accounts either current. saving or overdraft or cash credit with one or more banks as may be agreed upon by the partners and the account or accounts will be operated by the authorised representatives of the parties hereto jointly.

21. The Partnership shall stand dissolved on the expiration of the said period of 3 years unless by mutual consent the period is extended by any additional period in which event the partnership will continue on the same terms and conditions as are herein contained subject to such modification as may be mutually agreed.

22. Notwithstanding anything herein contained to the contrary if any of the Party of the First Part or the Party of the Second Part is or a majority of the partners of any of the parties hereto are adjudged insolvent or dissolved for any reason, this partnership will also stand dissolved.

23. On dissolution of the partnership hereby created accounts will be made of all assets, debts, and liabilities and subject to payment of the debts and liabilities, the net assets will be distributed between the parties, of the First Part and of the Second Part in equal shares.

24. This partnership will be registered under the Income Tax Act, 1961, and the Partnership Act, 1932 and the application for registration or a true certified copy of this deed will be signed by all the partners of both the parties hereto.

25. If any dispute or difference shall arise between the parties hereto touching the business of the firm or Interpretation of any provision hereof or otherwise, howsoever, relating to the Firm and its business, the same shall be referred to arbitration of a common arbitrator if agreed upon, failing which to two arbitrators one to he appointed by each party of the First Part and party of the Second Part, to the arbitration and the arbitration shall be governed by the Arbitration & Conciliation Act, 1996.

26. This Deed is executed In duplicate and one copy will remain with the Party of the First Part and the other will remain with the Party of the Other Part.

IN WITNESS WHEREOF the parties have put their respective hands the day and year first hereinabove written.

Signed and delivered for and on behalf of the Party of the First Part by its partners (1) … (2) … (3) … In the presence of …

Signed and delivered for and on behalf of the within named Party of the Second part by its partners (1) … (2)… (3) … (4)… in the presence of.

 

 

16 FAQ’S ON REDUCTION IN STATUTORY RATE OF EPF CONTRIBUTION FROM 12% TO 10%

 

16 FAQ’s on  Reduction in statutory rate of EPF contribution from 12% to 10%

 

Employees' Provident Fund Organization (EPFO), India Ministry of Labour & Employment, Government of India has issued Circular dated 20th May 2020 providing FAQ’S ON  REDUCTION IN STATUTORY RATE OF EPF CONTRIBUTION FROM 12% TO 10%.

 

Q.1: What is revised rate of EPF contribution announced by the Central Govt. under Atmanirbhar Bharat package?

Ans.Under this package the statutory rate of EPF contribution of both employer and employee has been reduced to 10 percent of basic wages and dearness allowances from existing rate of 12 percent for all class of establishments covered under the EPF & MP Act, 1952.

 

Q 2: What is the objective of reduction in rate of contributions?

Ans: Reduction in rate of EPF contributions from 12% to 10% of basic wages and Dearness allowances is intended to benefit both 4.3 crore employees/members and employers of 6.5 lakhs establishments to tide over the immediate liquidity crisis to some extent during Pandemic situation.

 

Q 3: Whether any notification has been issued under the EPF & MP Act, 1952 for reducing the rate of contributions? If so, how can I access the notification?

Ans. The reduction in statutory rate of contributions from 12% to 10% for wage months May, 2020, June, 2020 and July, 2020 has been notified vide SO 1513 (E) dated 18.05.2020 published in the Gazette of India. The notification is available under the TAB- COVID-19 on the home page of EPFO website.

 

Q.4: What is the period for which reduced rate of contribution is applicable?

Ans. The statutory rate of contribution will be 10% for wage months- May, 2020, June, 2020 and July, 2020.

 

Q 5. Who are eligible for the reduced rate of contributions?

Ans. It is applicable to all class of establishments covered under the EPF & MP Act, 1952, except the establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Govt. or State Govt.

The reduced rate is also not applicable to establishments eligible for PMGKY benefits, since the entire employees EPF contributions (12% of wages) and employers’ EPF & EPS contribution (12% of wages), totalling 24% of the monthly wages is being contributed by the Central Govt.

 

Q6. Are exempted establishments eligible for reduced rate of contribution?

Ans. Yes. The reduced rate is applicable to exempted establishments also.

 

Q 7: How does the reduced rate of contributions help the employees and employer?

Ans: As a result of reduction in statutory rate of contributions from 12% to 10%, the employee shall have a higher take home pay due to reduction in deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2% of wages of his employees. If Rs.10000/- is monthly EPF wages, only Rs.1000/- instead of Rs.1200/- is deducted from employee’s wages and employer pays Rs.1000/- instead of Rs.1200/- towards EPF contributions.

 

Q 8: I get salary under Cost to Company (CTC) model, will the reduced rate of contributions from 12% to 10% still benefit me?

Ans: In Cost to Company (CTC) model, if Rs.10000/- is monthly EPF wages, in CTC Model the employee gets Rs.200/- more directly from employer as employer’s EPF/EPS contribution is reduced and Rs.200/- less is deducted from his/her wages.

 

Q 9. Is the 10% rate of contribution applicable to establishments which get registered with EPFO during wage months May, 2020, June 2020 and July, 2020?

Ans. Yes. Establishments covered during wage months of May-July, 2020 will be eligible for reduced rate for eligible remaining period from date of coverage.

 

Q 10. What will be rate of contribution for administrative charges and insurance?

Ans. There is no change in the EPF administrative charges (0.5% of EPF wages subject to minimum prescribed) and EDLI contributions (0.5% of wages) both payable by employers.

 

Q 11. How is benefit availed? One has to pay at full rate and claim reimbursement later or direct payment at reduced rate can be made.

Ans: Establishment has to remit dues at reduced rate through the Electronic-Challan cum Return (ECR) itself.

 

Q 12. Can the employer or employee pay at higher rate or the contribution rate of 10% is mandatory?

Ans: The reduced rate of contribution (10%) is minimum rate of contribution during period of the package. The employer, employee or both can contribute at higher rate also.

 

Q 13. How the reduced rate of contribution will impact amount of pension in longer run?

Ans: The EPS contributions 8.33% of wages (subject to ceiling of Rs.15000/-) is diverted from employer’s share of EPF contributions. The reduced rate of EPF contributions to 10% will not reduce the pension contributions or benefits.

 

Q. 14. My establishment will not be able to remit dues timely during the scheme period. Is it still eligible for reduced rate of contribution?

Ans. Yes, the rate of contributions is 10% for the three wage months- May, 2020, June, 2020 and July, 2020 irrespective of date of payment.

 

Q. 15. Is the option to contribute at reduced rate available to establishments availing PMRPY benefits?

Ans. Yes. The establishment availing PMRPY benefits can remit contribution at reduced rate.

 

Q. 16. The rate of contribution for my establishment is 10% as it is engaged in manufacturing of gaur gum. Will the rate of contribution be further reduced for my establishment?

Ans. The establishments, which were already entitled to reduced rate of contribution (10%) through the SO 320 (E) dated 09.04.1997 are not eligible for any further reduction in rate of contribution.