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BUSINESS LAWS
SYMBIOSIS INSTITUTE OF
BUSINESS MANAGEMENTPune
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BUSINESS LAWS
Prof. Bala
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Session 10
The Factories Act 1948
Presentation on 20.1.201011.45 to 13.00 Hr.
Marketing A X-201
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BUSINESS LAWS
Agenda
1 Recap
The Transfer of Property Act 1882
2 Days discussion on
The Factories Act 1948
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Importance of the ActPrimarily object of:
protecting workers employed in factories
against industrial and occupational hazards.
to impose upon the owner / occupier certainobligations
to protect the workers and to secure for them
employment in conditions conducive to theirhealth and safety and the workingconditions
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Importance of the ActPost Bhopal tragedy
(Union Carbide case)
special chapter (IVA)has been added making
disclosures mandatory
for hazardous processes.
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Historyof labour enactments
Evolution of labour rights
- UK where it all started then moved to
- Other countries
From Master-Servant to
Employer-Workmen
From rules of status to
Law of contract
Post second World War to early 1970s thereforms momentum geared up and refinements /fine tunings were done on an ongoing basis
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The first labour law?
1349 England Statute ofLabourers
Placed restrictionson wage increases
Criminalized actionstaken by workersfordemanding wage increases
(organizing, agitations, refusing to work,
etc)
This was a period of labour shortage inEngland in the aftermath of the plague
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The important labour laws
The Factories Act, 1948
The Industrial Employment (Standing Order) Act, 1946
The Trade Union Act, 1926
The Industrial Disputes Act, 1947
The Payment of Wages Act, 1936
The Payment of Bonus Act, 1965
Shops and Establishment Acts of various states;
The Contract Labour (Regulation and Abolition) Act, 1970;
The Workmens Compensation Act, 1923;
The Employees Provident Funds and Miscellaneous ProvisionsAct, 1952;
The Employees State Insurance Act, 1948;
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History ofFactory Act in India
In India the first Factories Act was passed in 1881.
This Act was basically designed to protect children
and to provide few measures for health and safety ofthe workers. This law was applicable to only those
factories, which employed 100 or more workers. In
1891 another factories Act was passed which
extended to the factories employing 50 or more
workers.
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The
Factories Act 194
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It is a central Act
Monitored by States with suitable
ruled made by each of the state Basically the Act ensures the safety,health and working environmentconditions of the workers coupled
with Their rights wages /bonus/retiral
benefits etc.
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THE FACTORIES ACT,1948
The Act consists of 11 chapters with 120 sections and 3
schedules and following deals on SHE
Chapter Coverage
III Health
IV Safety
Iva Related to Hazardous Processes
V Welfare
VI Working hrs-adultsIX Special provisions relating to -
- Dangerous operations and
-Notifications
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SchedulesFirst schedule
- List of Factories involving Hazardous processes
(29)
Second schedule
- Permissible levels of certain chemical
substances in work environment.
Third schedule- List of modifiable diseases.
(29 categories)
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Factory definition
Factory is defined in Section 2(m) of the Act. It meansany premises including the precincts thereof-
Whereon ten or more workers are working, or wereworking on any day of the preceding twelve months, andin any part of which a manufacturing process is being
carried on with the aid of power, or is ordinarily so carriedon; or Whereon twenty or more workers are working, or were
working on any day of the preceding twelve months, andin any part of which a manufacturing process is beingcarried on without the aid of power, or is ordinarily socarried on;
But does not include a mine subject to the operation of theMines Act,1952 or a mobile unit belonging to the Armedforces of the Union, a railway running shed or a hotel,restaurant or eating place.
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FactoryFactory is:-
- as a place
- where manufacturing process iscarried out
- using 10 workers using electrical power or
- 20 workers without power.
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What are envisaged in the Factories Act,
1948
Appointment of Safety officer if > 1000workers
At least one first aid box with prescribedcontents for every 150 workers underresponsible person
Ambulance room to be provided if >500workers
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What are envisaged in the FactoriesAct, 1948
Minimum standard of lighting, ventilation,health, safety and welfare of workers andprecautions to be taken in cases of hazardous
processes Factories employing over 30 women to provide
crche for their children
If employing more than 150 workers shelters,rest rooms and lunch rooms to be provided
If more than 250 workers, a canteen
Appointment of welfare officer if >500 workers
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Manufacturing processManufacturing process also includes
- petrol pumps,
- retail workshops,- handicraft industries etc.
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Where the factory act does not
apply Factories working with the aid of power
wherein less than 10 persons areemployed;
F
actories working without the aid of powerwherein less than 20 persons areemployed;
Seasonal factories engaged exclusively inany of the following activities viz. Cotton
ginning, cotton or jute pressing,decortication of groundnuts, themanufacture of coffee, indigo, lac, rubber,sugar (including gur) or tea
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F
ollowing are held factories Salt works
A shed for ginning and pressing of cotton
A Bidi making shed A Railway Workshop
Composing work for Letter Press Printing
Saw Mills
Place for preparation of foodstuff andother eatables
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Occupier of the factory Under the Act the occupier is responsible for
all compliances and
in the case of an incorporated company theDirector on the board of the company must bedesignated for the purpose of an occupier.(Historical Judgment in J K Industries LtdLimited etc., Vs The Chief Inspector ofFactories & Boilers and others etc. 1996by Supreme Court)
Failing which all directors could become liable.
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Highlights of the Act of 1948
Came into force on the 1st day of April,1949
It was extended later to Dadra & Nagar Haveli,Pondicherry in 1963, to Goa in 1965 and to the Stateof Jammu & Kashmir in 1970.
Amended in 1949, 1950, 1954, 1956, 1976 and 1989. In Bhikusa Yamasa Kshatriya (P) Ltd. v UOI, the court
observed that the Act has been enacted primarily withthe object of protecting workers employed in factoriesagainst industrial and occupational hazards. For that
purpose, it seeks to impose upon the owner or theoccupier certain obligations to protect the workersand to secure for them employment in conditionsconducive to their health and safety.
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Important sections Registration &Renewal of
Factories
To be granted by Chief Inspector ofFactories on submission of prescribedform, fee and plan.
Only Director be appointed asOccupier of a factory (JK Tyresjudgment by Supreme Court)
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Important sections relating to
health Employerto ensure health of
workerspertaining to
Section 12 -Cleanliness Disposal ofwastes and effluents
Section 13 -Ventilation & temperaturedust and fume
Section 14 -Overcrowding Artificialhumidification Lighting
Section 18 Drinking water Spittoons.
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Important sections relating to
safety Section 21 - Fencing of machinery
Section 22 - Work on near machineryin motion.
Section 23 - Employment prohibitionof young persons on
dangerous
machines. Section 24 - Striking gear and
devices for cutting offpower.
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Important sections relating to
safety Section 26 - Casing of new
machinery.
Section 27 - Prohibition ofemployment of womenand children nearcotton-openers.
Section 28 - Hoists and lifts.
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Important sections relating to
working conditions / welfare Section 42 - Washing facilities
Section 43 - Facilities for storing and dryingclothing
Section 44 - Facilities for sitting Section 45 - First-aid appliances
one first aid box not lessthan one for every 150
workers- Canteens when there are 250
or more workers.
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Important sections relating to
working conditions / welfare Section 47 - Shelters, rest rooms
and lunch rooms whenthere are 150 or more
workers. Section 48 - Crches when there are
30 or more women workers.
Section 49 - Welfare office whenthere are 500 or moreworkers.
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Important sections relating to
working hours / wages Section 51 - Weekly hours not more than 48
Section 54 - Daily hours, not more than 9 hours.
Section 55 - Intervals for rest at least hour on
working for 5 hours. Section 56 - Spread over not more than 10 hours. -
Section 58 - Overlapping shifts prohibited.
Section 59 - Extra wages for overtime double than
normal rate of wages Section 60 Restrictions on employment of women
before 6AM and beyond 7 PM.
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Sections relating to Leav
eSection 79 - Annual Leave with
Wages
A worker having worked for 240 days@ one day for every 20 days and for achild one day for working of 15 days.
Accumulation of leave for 30 days.
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Offences and Penalties
4.
5
Offence
For contravention ofthe Act / Rules
On continuation ofcontravention
On contravention of
Chat IV to safety &dangerous operations.
PenaltyFor contraventionImprisonment 2 years
Rs. 1000 per day
Rs.5000 seriousinjury and not less
than Rs.25000 in caseof death
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Offences and Penalties
6
7
Offence
SubsequentContravention of
some provisions
ObstructingInspectors
Penalty
Imprisonment upto3 years or fine and
not less thanRs.10, 000 whichmay extend to Rs.2lacs
Imprisonment upto6 months or fineupto Rs.10, 000 orboth
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Offences and Penalties
8
Offence
Wrongful disclosingresult pertaining to
results of analysis.
Penalty
Imprisonment upto6 months or fine
upto Rs.10, 000 orboth.
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Off
ences
and Penalti
es
9
Offence
For contravention of theprovisions of Sec. 41B,
41C and 41H pertainingto compulsory disclosureof information byoccupier, specific
responsibility of occupieror right of workers towork imminent danger.
Penalty
Imprisonmentupto 7 years with
fine upto 2 lacs &on Continuationfine @ Rs.5000per day Imprison-
-ment of 10 yearsfor continuesoffence
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Factories Act / Shops &establishment Act
The working hours, leave , weekly days off
and wages are similar to Shop and
Establishment Act Employers are required to follow stringent
licensing and safety measures.
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EMERGING TRENDS IN LABOURLAWS
There is a change in the mind-set of the courts and itis being seen that the courts are interpreting lawsmore liberally that is providing the employer moreflexibility now-a-days
Several amendments are on the anvil which will givethe freedom to the employers by not being required tomake an employee permanent, even if the employeehas completed 240 days.
Labour laws in the Special Economic Zone (SEZ) are
to be amended substantially with amendment in theContract Labour (Regulation and Abolition) Act, 1970which will allow the employers to follow a hire and firepolicy under certain conditions.
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In summary
It is a Social Welfare Legislation
Meant to take care of the employees
Safety
- Health,
- Welfare and Working Environment
- Working Hours
- Annual Leave with Wages and specialconditions of employment of women and
young persons
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Machineriestosettle disputes
1 Works Committees2 Conciliation
(conciliation officer/board of conciliation)
3 Arbitration (Voluntary)4 Labour Court5 Industrial Tribunal and6 National Tribunal
Relevant Sections 2A Sec 9A Sec 10 Sec 12(3) & Sec 18(1)
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WHEN WE MEETNEXTTIME
Next Session on
WEDNESDAY
3 FEBRUARY 2010
TOPICS
The Industrial Disputes Act1947
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THANK YOU