Factories (Amendment) Act, 2015

Factories (Maharashtra) Amendment Act (“Amendment Act”) has come into force on 2nd December, 2015 after receiving the assent of the President. The Amendment Act shall specifically be applicable to the State of Maharashtra. The amended provisions shall be in consonance with the Factories Act, 1948 (“Principal Act”) and shall only replace the relevant provisions as and to the extent mentioned in the Amendment Act.

Principal Act focuses on the regulation of labour employed in factories in India. The main purpose is to provide protection to the workers from being exploited by the employers. The Amendment Act is introduced in a bid to encourage growth of only small-scale and medium industries.

Key highlights of the Amendment Act

  1. Amendment Act has revised the definition of factory under Section 2(m)[1] of the Principal Act by increasing threshold of the number of workers employed in any manufacturing unit without electricity from 20 to 40 and those units operating with power the limit employee from 10 to 20 workers. Additionally, the state government is may now stipulate the threshold for applicability under this Amendment Act, so long as such minimum does not exceed 40 workers or 20 workers as the case may be. Further, the cap of employees to be employed in the unit operating with power has been increased from 10 workers to 20 workers.  Further, Section 85[2] of the Principal Act has also been amended to give effect to this change in definition. The effect of increase in the applicability threshold is that the smaller industries are now excluded from the provisions of the Principal Act which mandates that every unit with more than 20 workers in premises with power supply and 40 workers in premises without power shall have safety guidelines and proper working conditions.
  2. Written permission from the Chief Inspector in consonance with the opinion of the State Government for exemption from any conditions for adult workers working in the factory as specified in Section 65(2)[3] of the Principal Act has been waived off and the rules for working of an adult shall on such terms and conditions shall be as may be prescribed.
  3. The Amendment Act has increased the maximum legal overtime to 115 hours from the present 75 hours for workers in small-scale industrial units as specified in Section 65(3)[4] of the Principal Act.
  4. The Principal Act did not permit women employees to work except between 6.00am to 7.00pm in industrial units under section 66(1)[5]. The Amendment Act has allowed women employees to work during 7.00 pm and 6.00 am in any factory under adequate safety and securities measure. The Amendment Act has paved the way for women to work night shifts, provided however, mandatory safeguards for security are followed i.e. with regards to occupational safety and health, equal opportunity for women workers, adequate protection of their dignity, honour and transportation from the factory premises to the nearest point of their residence.[6]
  5. If the workman works for 90 continuous days than that workman shall be eligible for annual leave with wages. Prior to the amendment, a workman had to work for 240 continuous days to avail the benefit of paid leaves as stated in Section 79[7] of the Principal Act.
  6. A new provision i.e. Section 92(A) and Schedule IV dealing with general penalty for offences and list of compoundable offences respectively. The officer not below the rank of Deputy Chief Inspector of factories shall be permitted to institute prosecution for any offences as specified in Schedule IV of the Amendment Act. The penalty imposed for these offences shall not extend the fine amount prescribed under Section 92[8] of the Principal Act. Section 92 has detailed out the amount of fine for various circumstances. The amount of fine should not exceed INR 1,00,000/- (Rupees One Lacs Only) for general offences but for a repeated offender the limit of the fine may be extended to 1,000/- (Rupees One Thousand) each day until  the time such contravention persists. Further if the cognizance of offence results in serious bodily injury or death of a workman than the amount of fine shall not exceed INR 25,000/- (Rupees Twenty Five Thousand) and 5,000/- (Rupees Five Thousand Only) respectively. Once the proceedings have been compounded against the offender for an offence, the offender shall not be prosecuted again for the same offence. The cognizance of any offence shall not be taken up by any court unless given in writing by the Chief Inspector. Prior to the amendment, the Inspector was to sanction in writing for any offence to be taken up by the court under Section 105[9] of the Principal Act.

Encapsulated below is a snapshot of the amended provisions:

Section of the Act Original Section Amendment
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 (35 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 IFor computing the number of workers for the purposes of this clause all the workers in 6[different groups and relays in a day shall be taken into account;

Explanation IIFor 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.

Increased the number of workers employed in any manufacturing unit without electricity from 20 to 40 and those units operating with power the number of employee can be increased from 10 to 20 workers.

 

State Government is also entitled to prescribe the number of workers to be employed in the factory subject to the maximum cap of 40 and 20 employees respectively.

Section 65(2) The State Government or, subject to the control of the State Government, the Chief Inspector, may by written order exempt, on such conditions as it or he may deem expedient, any or all of the adult workers, in any factory or group or class or description of factories from any or all of the provisions of sections 51, 52, 54 and 56 on the ground that the exemption is required to enable the factory or factories to deal with an exceptional press of work. No written permission from the Chief Inspector in consonance with the opinion of the State Government is required. This requirement has been replaced by general connotation “on such terms and conditions as may be prescribed”.

 

The rules for exemption have not been notified and shall come into effect once it is notified by the government.

Section 65 (3) Any exemption granted under sub-section (2) shall be subject to the following conditions, namely:- (i) the total number 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 workman 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. Increased the overtime limit of 115 hours from the present 75 hours for workers in small-scale industrial units.
Section 66(1) of the Principal Act: Further restrictions on employment of women  (1) The provisions of this Chapter shall, in their application to women in factories, be supplemented by the following further restrictions, namely:- (a) no exemption from the provisions of section 54 may be granted in respect of any woman;

(b) no woman shall be required or allowed to work in any factory except between the hours of 6 a.m. and 7 p.m.  Provided that the State Government may, by notification in the Official Gazette in respect of any factory or group or class or description of factories, vary the limits laid down in clause (b), but so that no such variation shall authorise the employment of any woman between the hours of 10 p.m. and 5 a.m.;

(c) there shall be no change of shifts except after a weekly holiday or any other holiday.

Permits women employees to work during 7.00 pm and 6.00 am in any factory under adequate safety and security measures.

 

The Principal and Amendment Act are silent on the safety measures to be provided to women employees but as per the report of National Commission for Women safety measures shall include occupational safety and health, equal opportunity for women workers, adequate protection of their dignity, honour and transportation from the factory premises to the nearest point of their residence.

Section 79 of the Principal ActAnnual leave with wages  (1) Every workman 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.

Explanation 1For the purpose of this sub-section- (a) any days of lay-off, by agreement or contract or as permissible under the standing orders; (b) in the case of a female workman, maternity leave for any number of days not exceeding twelve weeks; and (c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the workman has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.

Explanation 2The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

The continuous working days for a workman has been reduced from 240 days to 90 days for availing annual leave with wages.
Section 92 of the Principal Act: General penalty for offences Save as otherwise expressly provided in this Act and subject to the provisions of section 93, if in, or in respect of any factory there is any contravention of any of the provisions of this Act or of any rule made thereunder or of any order in writing given thereunder, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both and if the contravention is continued after conviction, with a further fine which may extend to one thousand rupees for each day on which the contravention is so continued. Provided that where contravention of any of the provisions of Chapter IV or any rule made thereunder or under section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.

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

New provision, Section 92(A) and Schedule IV has been inserted, which deals with general penalty for offences and list of compoundable offences respectively.

 

Deputy Chief Inspector of factories shall be permitted to institute prosecution for any offences as specified in Schedule IV and the penalty for the specified offences shall not extend the fine amount prescribed under Section 92 of the Act.

Section 105 of the Principal Act: Cognizance of offences  (1) No Court shall take cognizance of any offence under this Act except on complaint by, or with the previous sanction in writing of, an Inspector. (2) No Court below that of a Presidency Magistrate or of a Magistrate or of the first class to try any offence punishable under this Act. For the cognizance of any offence, Chief Inspector shall give sanction in writing and not the Inspector.

A copy of the notification of the Amendment Act can be accessed at http://bombayhighcourt.nic.in/libweb/acts/Stateact/2015acts/2015.40.pdf

– Rupal Shah

[1] Section 2(m) of the Principal Act: “factory” means any premises including the precincts thereof-

  • 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 does not include a mine subject to the operation of the Mines Act, 1952 (35 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 IFor computing the number of workers for the purposes of this clause all the workers in 6[different groups and relays in a day shall be taken into account;

Explanation IIFor 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.];

[2]Section 85 of the Principal Act: Power to apply the Act to certain premises.- (1) The State Government may by notification in the Official Gazette, 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 that- (i) the number of persons employed therein is less than ten, if working with the aid of power and less than twenty if working without the aid of power, or (ii) the persons working therein are not employed by the owner thereof but are working with the permission of, or under agreement with, such owner: Provided that the manufacturing process is not being carried on by the owner only with the aid of his family.

[3]Section 65(2) of the Principal Act: The State Government or, subject to the control of the State Government, the Chief Inspector, may by written order exempt, on such conditions as it or he may deem expedient, any or all of the adult workers, in any factory or group or class or description of factories from any or all of the provisions of sections 51, 52, 54 and 56 on the ground that the exemption is required to enable the factory or factories to deal with an exceptional press of work.

[4]Section 65 (3): Any exemption granted under sub-section (2) shall be subject to the following conditions, namely:- (i) the total number 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 workman 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.

ExplanationIn this sub-section “quarter” has the same meaning as in sub-section (4) of section 64.

[5]Section 66(1) of the Principal Act: Further restrictions on employment of women.- (1) The provisions of this Chapter shall, in their application to women in factories, be supplemented by the following further restrictions, namely:- (a) no exemption from the provisions of section 54 may be granted in respect of any woman;

(b) no woman shall be required or allowed to work in any factory except between the hours of 6 a.m. and 7 p.m.  Provided that the State Government may, by notification in the Official Gazette in respect of any factory or group or class or description of factories, vary the limits laid down in clause (b), but so that no such variation shall authorise the employment of any woman between the hours of 10 p.m. and 5 a.m.;

(c) there shall be no change of shifts except after a weekly holiday or any other holiday.

[6] http://ncw.nic.in/pdfreports/night%20shift%20for%20women.pdf

[7]Section 79 of the Principal ActAnnual leave with wages.- (1) Every workman 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.

Explanation 1For the purpose of this sub-section- (a) any days of lay-off, by agreement or contract or as permissible under the standing orders; (b) in the case of a female workman, maternity leave for any number of days not exceeding twelve weeks; and (c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the workman has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.

Explanation 2The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

[8]Section 92 of the Principal Act: General penalty for offences.- Save as otherwise expressly provided in this Act and subject to the provisions of section 93, if in, or in respect of any factory there is any contravention of any of the provisions of this Act or of any rule made thereunder or of any order in writing given thereunder, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to two years or with fine which may extend to one lakh rupees or with both and if the contravention is continued after conviction, with a further fine which may extend to one thousand rupees for each day on which the contravention is so continued. Provided that where contravention of any of the provisions of Chapter IV or any rule made thereunder or under section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than twenty-five thousand rupees in the case of an accident causing death, and five thousand rupees in the case of an accident causing serious bodily injury.

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

[9]Section 105 of the Principal Act: Cognizance of offences.- (1) No Court shall take cognizance of any offence under this Act except on complaint by, or with the previous sanction in writing of, an Inspector. (2) No Court below that of a Presidency Magistrate or of a Magistrate or of the first class try any offence punishable under this Act.

 

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