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Everything you need to know about Factory Compliance

Everything you need to know about Factory Compliance

A brief history of the Factories Act:

In India, the use of machineries in cotton industries in the second half of the 19th Century paved the way for high production and set the pace of development of more factories.

Major Moore, Chief Inspector, Bombay Cotton Department, first raised a question about the provisions of the legislation to regulate the working conditions in Factories. Hence the first Factories Act was enacted in the year 1881, which focused on the prohibition of children below 7 years, and certain amendments were brought in 1891 in the Indian Factories Act. Later in 1911. Post World War I, the Factories Act of 1911 was amended to include provisions regarding working hours, minimum age, and night work of women and children. Then in 1934, based on the recommendation of the Royal Labour’s Commission on inspection and applicability to factories employing 20 or more with power, The Factories Act, 1934 was enacted to replace all earlier versions. Finally, after so many amendments carried out after 1934, the Factories Act of 1948 was passed by the constituent assembly on August 28, 1948, and it came into force on April 1, 1949. This act has also been amended later from time to time appropriately. The Bhopal Gas tragedy triggers the government to introduce a separate chapter on hazardous processes in the 1987 amendment. The Factories Act ensures adequate safety measures and working conditions are maintained and also promotes the health and welfare of the labours working in Factories. In the years 2019 and 2020, the most significant changes were announced for a short period of time through ordinances and amendments in Factories Act by a few states like Gujarat, Rajasthan, Haryana, UP, and Himachal to rejuvenate the affected economy due to Covid-19 lockdown. A few notable changes are like working hours changed from 8 hours to 12 hours in a day and from 48 hours to 72 hours in a week with applicable overtime wages which led to some social consequences and agitation amongst workers in those states. Few states withdrew such notification and few challenged it in court, now that notification got expired and is no more in practice. Now the Central government introduced a Labour Code which amalgamates the existing 29 Central Acts into 4 codes. The occupational safety, health, and working conditions code, 2020 repealed 13 central Acts including the Factories Act, 1948 which regulates the occupational safety, health, and working conditions of employees.

 

Why Factory Compliance Audit is necessary?

 An Audit is an examination required in any business operation to

  • improve a company’s internal controls and system.
  • identify the weaknesses in the operations and allow the company to rectify them.
  • identify potential non-compliance in factories.
  • ensure adequate safety measures and working conditions are maintained
  • promote the health and welfare of the labours working in factories.
  • ensure compliance in all statutory aspects to avoid penal consequences under various Acts.

Who are all regulated under Factories Act, 1948

  • Factory engaging 10 or more workers on any day of the preceding 12 months to carry out manufacturing activity with aid of power
  • Factory engaging 20 or more workers to carry out manufacturing activity without the aid of power
  • New Factories yet to commence manufacturing activity
  • Existing Factories extending their manufacturing activity.

Compliance Activities under this Act 

  • obtaining a fresh license
  • renewing or amending the existing license
  • sending appropriate notices
  • filing periodical returns
  • maintaining various registers
  • disclosure & display of information to various stakeholders
  • statutory payment remittance
  • facilitating the Inspector at the time of Inspection, etc.

Liability in case of Non-Compliance with this Act 

 Any contravention of the Factories Act invites penal consequences for the Occupier & the Manager like:

  • Under Section 92 of the Act, any contravention with the provisions of the Act and Rule invites a fine of up to Rs. 2 lakhs and imprisonment of up to 2 years.
  • If the breach continues then each day Rs. 10,000 till the breach continued.
  • For any accident causing death or serious bodily injury, the fine shall be not less than Rs. 25,000 in case of death and Rs. 5000 in case of an accident causing serious bodily injury under Section 94 of the Act.
  • Under Section 93, if the industrial premises are leased to various occupiers for use as separate factories then the owner of the premise is held responsible for maintaining certain services like proper maintenance of drainage, water supply, electricity, lighting, approach to main roads, etc.
  • To engage any person as a worker in factory premises that person needs to be certified to do a particular job, if the certificate of fitness is false, he will be punished with imprisonment of 2 months and may be liable to pay a fine of at least Rs. 10,000.

Why you need Aparajitha 

Regulatory compliance is a statutory obligation and the employer needs to comply without fail. It requires enormous clerical activity, a proper monitoring system and needs to be carried out within a stipulated time period to avoid penal consequences. In this case, it is always better to hire the best compliance management firm to cater to your entire Factory Compliance Requirements.

We, Aparajitha take care of your end-to-end Regulatory Compliance from registration to filling annual return to authority, maintenance of various registers, and liaison with authorities.

We have a Pan India presence and a team of 1500+ Compliance Experts to advise you on the changes that need to be effected immediately and update any observations with pragmatic solutions.

 

Compliance Knowledge Hub

Aparajitha Corporate Services Pvt. Ltd

 

For Enquiries, write to us at marketing@aparajitha.com

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