FACULTY OF LAW

JAMIA MILLIA ISLAMIA

COURT MANAGEMENT
LEGISLATIVE BRIEF
THE FACTORIES ACT (AMENDMENT) BILL, 2016

SUBMITTED TO:- Dr. FAIZANUR RAHMAN

SUBMITTED BY:- AMAAN AHMED
SEM:-10TH SEC- A

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 ACKNOWLEDGEMENT

It is my greatest pleasure to be able to present this project of Court

Management. I found it very interesting to work on this project. I would
like to thank Dr. Faizanur Rahman, Assistant Professor, Faculty of law,
Jamia Millia Islamia University and Subject teacher for providing me
with such an interesting project topic, for his unmatched efforts in
making learning an enjoyable process, for his immense sincerity for the
benefit of his students and for his constant unconditional support and
guidance.
I would also like to thank my librarian for helping me in gathering data
for the project. Above all, I would like to thank my parents and friends
who extended all possible moral and motivational support for me. I
hope the project is up to the mark and is worthy of appreciation.

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 THE FACTORIES ACT (AMENDMENT) BILL, 2016
STATEMENT OF OBJECT
The Factories (Amendment) Bill, 2016 was introduced in Lok Sabha on August
10, 2016 by the Minister for Labour and Employment, Mr. Bandaru Dattatreya.
The Bill amends the Factories Act, 1948. The Act regulates the safety, health and
welfare of factory workers. The Bill amends provisions related to overtime hours
of work.
REASONS
 Ease of doing business
 Removing redundant provisions and incorporating new provisions in line
with current demands and conditions of factories and technology.1

1
http://www.insightsonindia.com/2016/10/08/rajya-sabha-tv-law-land-factories-amendment-bill-2016/
(Accessed on 30th of March, 2018 at 12.35 A.M)

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KEY HIGHLIGHTS OF THE BILL

Power to make rules on various matters (Amendment of Section 2): The Act
as it stands today permits only the state government to prescribe rules on a range
of matters, including double employment, details of adult workers to be included
in the factory’s register, conditions related to exemptions to certain workers, etc.
The Bill gives such rule making powers to the central government as well.
Powers to make rules for exemptions to workers (Amendment of Section 64):
Under the Act, the state government may make rules to (i) define persons who
hold management or confidential positions; and (ii) exempt certain types of adult
workers (e.g. those engaged for urgent repairs) from fixed working hours, periods
of rest, etc. The Bill gives such rule making powers to both, the central and state
governments.
Limitation of application of Rules for exemptions to workers (Amendment
of Sub-section 5 of Section 64): Under the Act, such rules will not apply for
more than five years. The Bill of 2016 modifies this provision to state that the
five-year limitation will not apply to rules made after the enactment of this Bill.
Overtime hours of work in a quarter (Amendment of subsection 4 in clause
iv of Section 64): The Act permits the state government to make rules related to
the regulation of overtime hours of work in some specific condition up to 50 hours
for a quarter. The specific conditions include urgent repairs, preparatory or
complementary work which must necessarily be carried on outside the limits laid
down for the general working of the factory, work which is necessarily so
intermittent that intervals during which they do not work while on duty, any work
which for technical reasons must be carried on continuously, making or supplying
articles of prime necessity which must be made or supplied every day, a
manufacturing process which cannot be carried on except during fixed seasons, a
manufacturing process, which cannot be carried on except at times dependent on
the irregular action of natural forces, work engaged in engine-rooms of boiler-
houses or in attending to power-plant or transmission machinery, engaged in the
loading or unloading of railway wagons or lorries or trucks and in any work,
which is notified by the State Government in the Official Gazette as a work of
national importance.
However, the total number of hours of overtime must not exceed 50 hours for a
quarter. The Bill raises this limit from 50 hours to 100 hours. Rules in this regard
may be prescribed by the central government as well.

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Overtime hours if the factory has higher workload (Amendment of Section
65): The Act enables the state government to permit adult workers in a factory to
work overtime hours if the factory has an exceptional workload. Further, the total
number of hours of overtime work in a quarter must not exceed 75. The Bill
permits the central or state government to raise this limit to 115 hours in a quarter.
Overtime in public interest (Amendment of Section 65, inserted after sub
section 3 and before the Explanation): The Bill introduces a provision, which
permits the central or state government to extend the 115-hour limit to 125 hours.
It may do so because of public interest.
State Government will have the power to double Employment threshold
limits for factories: In a fresh proposal circulated on 14th February, 2017, the
labour ministry has stated that state government will have the power to double
employment threshold limits from 10 workers to 20 workers in units using power
for manufacturing and from 20 workers to 40 workers in units that do not use
power for manufacturing, except in factories with “hazardous processes”.
Moreover, according to the fresh amendment, state governments could decide the
employment threshold for a unit to be considered a factory under the Factories
Act by simply issuing a notification to this regard.

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AUTHORITIES CONCERNED

The Factories Act extends to whole of India and is applicable to all 'factories',
government as well as private. It applies to all factories employing more than 10
people who are working with the aid of power or factories employing 20 people
who are working without the aid of power. The act covers all workers employed
in the factory premises directly or indirectly through an agency.

The respective State/UTs, who frame the rules, are responsible for the
enforcement of Act. State/UTs work through the office of Chief Inspector of
factories under the labour department.2
APPROVAL, LICENSING AND REGISTRATION OF FACTORIES
Under Factories Act 1948, the procedure for licensing and registration is given
under various sections. Its procedure is as following:-
(1) Section 6
Section 6 empowers the State Government to make rules with regard to licensing
and registration of factories under the Act on following matters:
1. submission of plans of any class or description of factories to the Chief
Inspector or the State Government;
2. Obtaining previous permission of the State Government or the Chief
Inspector, for the site on which factory is to be situated and for construction
or extension of any factory or class or description of factories. However,
replacement or addition of any plant or machinery within prescribed limits,
shall not amount to extension of the factory, if it does not reduce the
minimum safe working space or adversely affect the environmental
conditions which is injurious to health;
3. considering applications for permission for the submission of plans and
specifications;
4. nature of plans and specifications and the authority certifying them;
5. registration and licensing of factories;
6. fees payable for registration and licensing and for the renewal of licences;

2
https://www.careerride.com/view/what-is-the-coverage-area-of-factories-act-1948-which-authority-is-
responsible-for-rules-formations-and-enforcement-of-those-rules-6464.aspx (Accessed on 30th March at
11.17 P.M)

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 7. Licence not to be granted or renewed unless notice specified under Section
7 has been given.
(2) Automatic approval
If an application is made for the approval of site for construction or extension of
the factory and required plans and specifications have been submitted by
registered post to the State Government or the Chief Inspector and if no reply is
received within three months from the date on which it is sent the application
stands automatically approved [Section 6(2)]. Where the rules require the
licensing authority to issue a licence on satisfaction of all
legal requirements/record reasons for refusal. Licence could not be refused only
on a direction from Government. (S. Kunju v. Kerala)3.

(3) Appeal against refusal to grant permission

If the State Government or Chief Inspector do not grant permission to the site,
construction or extension of a factory, or to the registration and licensing of a
factory, the applicant may within 30 days of the date of such refusal appeal to:
(i) the Central Government against the order of the State Government;
(ii) the State Government against the order of any other authority.
Notice by Occupier
Section 7 imposes an obligation on the occupier of a factory to send a written
notice, containing prescribed particulars, to the Chief Inspector at least 15 days
before an occupier begins to occupy or use a premises as a factory and at least 30
days before the date of resumption of work in case of seasonal factories, i.e.
factories working for less than 180 days in a year.
Contents of notice
A notice must contain following particulars:
 The name and situation of the factory.
 The name and address of the occupier.
 The name and address of the owner of the premises or building (including
the precincts, etc., thereof referred to in Section 93).
 The address at which communication relating to the factory should be sent.

3
(1985) 2 LLJ 106.

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  The nature of manufacturing process to be carried on in the factory during
next 12 months.
 The total rated horse power installed or to be installed in the factory which
shall not include the rated horse power of any separate standby plant.
 The name of the Manager of the factory for the purpose of this Act.
 The number of workers likely to be employed in the factory.
 Such other particulars as may be prescribed.
Notice where new manager is appointed whenever a new manager is appointed,
the occupier shall send to the Inspector a written notice and to the Chief
Inspector a copy thereof, within seven days from the date on which such person
takes over charge.4
The present Bill, however, gives many authorities of the State government to the
Central government as well as enshrined above.

4
https://www.legalbites.in/law-notes-labour-law-registration-and-licensing-as-under-factories-act-1948/
(Accessed on 30th March at 11.30 P.M).

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STATUS OF THE BILL
The Bill is currently pending before the Rajya Sabha.5

REMARK
An analysis of the Factories Act (Amendment) Bill suggests that the provisions
mentioned in the Bill are far removed from the reason for which the original Act
came into existence. By amending the Act, the Government is actually altering
the uniqueness of the Act which is the protection of the workers in the country.
Increasing overtime could raise earnings for some workers but it would come at
the cost of health and standard of living of the workers. Moreover, increasing
overtime is not even a sign of industrial development as it will not necessarily
add to the productivity of the factory (diminishing returns to scale appears in
production after a point in time) in fact, it rarely leaves either companies or their
employees better off. In this context, the government should take into
consideration the criticism and feedback from trade unions, the labour community
and civil society and as a first step it should look at giving more benefits to daily
wagers and action need to be taken against companies that do not pay the
stipulated wages for working overtime.

5
http://www.prsindia.org/billtrack/the-factories-amendment-bill-2016-4368/ (Accessed on 30th of March,
2018 at 12.21 A.M).

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