APPROVAL, LICENSING, AND REGISTRATION OF FACTORIES

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This article is written by Amrita Parida of 5^th Semester of University Law College, Utkal University, an intern under Legal Vidhiya

ABSTRACT:

The paper concerns with the brief yet in depth understanding of section 6 of Factories Act 1948 which relates to the approval of the necessary building plans, licencing of the manufacturing activities, and registration of factory.

Keywords: Factories Act 1948, Registration of factories, Factory License, Labour Legislation

INTRODUCTION:

The Factories Act is a significant labour based legislation incorporated in the year of 1948 with the purpose in view of providing an effective enactment for the proper regulation of registration of factories and working conditions of the workers employed in those registered factories. It as well ensures that numerous issues concerning the people employed at workplaces like their health; security and safety; leave period of factory workers; their efficiency etc. is fairly governed and looked into. Further, it sets out provisions relating to women employees and their concerned issues like paid leave, women safety at workplace, fair treatment and opportunity etc. Every factory owner is required under the Factories Act of 1948 to secure approval for building designs prior to opening of their factory. The factory license serves as a document of authorization issued by the appropriate regulatory bodies for carrying out manufacturing operations. In India it is the Department of Factories and Boilers that grant such licenses. Each factory owner is required to secure the labour and employment department’s prior approval before beginning the factory registering process. The process of registering and renewing of the license is important for ensuring that the safety and health of the workers are not compromised and is rather safeguarded as per the given provisions of the Factories Act. The Factories Act has been amended several times in order to adapt well to the changing landscape relating to labour conditions and increased technological advancement. Some Provisional measures undertaken by the Factories Act 1948 are-

It regulates the use of dangerous machinery, and it lays down safety measures for the handling of hazardous substances.
It sets standards for working hours, rest intervals, and overtime.
It addresses the employment of women and young persons, including restrictions on night shifts and overtime.
It mandates proper ventilation, lighting, and sanitation facilities in factories.
It also covers annual leave with wages, employment of children, and penalties for contravention of its provisions.

APPLICABILITY:

Applicability of the Act: The Factories Act of 1948 governs all manufacturing operations and establishments that fall under the description of “factory” as stated in Sec.2(m) of the said Act, and it is applicable throughout the nation, including Jammu and Kashmir. Pursuant to Section 116, the Act also applies to the factories owned either by the central government or the state government.
Applicability of the Factory License: Under the Factories Act of 1948 mandatory registration of factory is necessary to set up a factory in India. Factory registration is required for any premises where ten or more workers are employed, and power is used for manufacturing processes. For factories using no power, the threshold is twenty or more workers.

APPROVAL, LICENSING AND REGISTRATION OF FACTORIES:

Section 6 and 7 of the Factories Act, 1948 delves into the provisional aspect concerning the approval, licensing and registration of the factories. Sec.6 provides that the State Government may make rules requiring for the purposes of the Act previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated and for the construction of any factory, the submission of plans and specifications and registration and licensing of factories as has been rightly pointed out in the case of Indian Railway Construction Co. vs Lal Mohd. and ors.[1]

APPLICATION FOR REGISTRATION:

To initiate the registration process, the occupier or owner of the factory needs to obtain the prescribed application form which are usually available on the official website of the State’s Labour Department or can be obtained in person from the local Factory Inspectorate. Following this the form contents is required to be duly filled properly. The application form typically includes sections where you need to provide various details about the factory and its operations. Following is a simple brief regarding the required information:

Name and Address of the Factory: This includes the full legal name of the factory and its complete address, including details like street address, city or district, and pin code.
Name and Address of the Occupier: The occupier refers to the person or entity responsible for the overall management and operation of the factory. Their complete name and contact address should be enclosed with no ambiguity to any of the details.
Nature of Manufacturing Process: The type of manufacturing or industrial process that is to be carried out in the factory is required to be described well. This would help the authorities to understand the nature of the work and the potential risks involved.
Number of Workers Employed: Specification of the correct number total workers currently employed in the factory is important. Further, it should also be ensured that this count complies with the threshold for registration based on the use of power.
Details of Machinery and Equipment: All the machinery and equipment that are to be used in the manufacturing process are also required to be properly enclosed. The information such as the number, type, and capacity of machines are required to be included.
Factory Layout and Plans: Some states may require one to submit a layout plan of the factory, showing the arrangement of various sections, machinery, and safety measures and hence it should be prepared well to submit. This plan should be prepared by a qualified engineer or architect in compliance with concerned laws and regulations.
Ownership and Legal Status: Mentioning of the fact that whether the factory is owned by an individual, partnership, company, or any other legal entity is crucial. Hence, complete details relating to the legal status of the factory should be provided.

The application form is required to be accompanied with certain necessary documents, which may include:

Proof of ownership or occupancy of the factory premises.
Any approvals or permissions required by local authorities.
Documents related to the safety measures and facilities provided for workers, as required by the Factories Act.

Further, the application form must as well be accompanied along with registration fee as specified by the state authorities. Once the application form is completed and all required documents are attached, the application is submitted. This can usually be done in person or by mail, as per the state’s guideline. After submission, the Factory Inspector may schedule an inspection to verify compliance with safety and health standards. If the inspection is successful and all requirements are met, then a factory license is issued, allowing the factory to operate within the specified conditions.

VALIDITY OF FACTORY LICENSE:

The validity of the issued factory license may be in effect from 1 year to utmost of 5 years depending on the enacted rule regarding it by the respective state. Hence, the validity is subject to variation depending on the state in which the factory is set up. However, renewal of license before the expiration of the validity of license is essential for the continued functioning of the factory or manufacturing operations.

NOTICE TO CHIEF INSPECTOR:

It is to be noted that a notice in writing to the Chief Inspector at least fifteen days before one intends to occupy or utilize any space as a factory needs to be furnished. Within a period of thirty days, the occupant of any establishment that becomes subject to the Act for the very first time must submit a notice in writing to the chief inspector and such notice must include the information stated in Sec.7(1).

EMPOLYING OF NEW MANAGER:

The Sec.7 as well delineates that within seven days of the newly recruited manager assuming the control of the factory, the factory’s administration is required to appropriately inform the principal auditor about such recruitment. Further, when no person has been assigned as the manager or when the assigned manager fails to oversee the factory then any individual functioning as the manager, or in the event of no such individual functioning as the manager, the one who occupies the functioning of factory, will be considered to act as the manager of factory for the reason of this legislation.

In the case of Mohd. Ismail Khizer Hussain & Co. vs The State Of Madras And Anr[2], it has been held that ‘where a factory had been in existence and no previous permission for the site or the construction of the factory was required, this section does not enable the appropriate authority to demand that the owner of the factory should obtain the approval of the appropriate authority for the site of the plans of the factory buildings.’

RENEWAL OF LICENSE:

The renewal of a factory license under the Factories Act, 1948 is a necessary process to ensure continued compliance with the law. It’s essential for factory owners to be proactive in renewing their factory license to ensure compliance with the Factories Act and to avoid any legal complications. The renewal application should be submitted before the current license expires to avoid any disruptions in factory operations. However, the specific requirements and processes for renewal may vary from state to state.

To renew obtain the prescribed renewal application form is required to be obtained. The renewal application form usually requires updating information about the factory’s status and operations. While the specific requirements may vary by state, here are some common elements you might need to provide:

Current status of the factory, including any changes in ownership or management.
Updated details on the manufacturing process and machinery used.
Current number of workers employed.
Any modifications or improvements made to the factory’s layout, safety measures, or facilities.
A declaration of continued compliance with the Factories Act and relevant state regulations.

Further, the applicant may require the following necessary documents:

Proof of payment of the renewal fee, which varies by state.
Updated factory layout plans, if any changes have been made.
Any documents or certificates related to safety measures and facilities.
Photo-copy of the Original Factory License.

Upon receipt of the application, the relevant officer reviews it for accuracy. Following a thorough examination of the application, if the documents are deemed accurate, it proceeds to the approval stage under the jurisdiction of the competent authority. In cases where corrections are necessary, the applicant is promptly notified and requested to resubmit the revised application within a specified timeframe. Upon receiving the corrected documents from the applicant, the application is filed for further evaluation by the Competent Authority. Following approval, the renewed license, which bears the signature of the Competent Authority, is dispatched to the applicant via postal mail, accompanied by a formal covering letter.

Failure to renew the factory license on time can result in penalties, including fines and legal action. It can also lead to the suspension of factory operations until the renewal is completed.

RESPONSIBILITIES OF THE OWNER OF FACTORY:

Sec.7A of the 1948 Act delineates the overarching responsibilities of the occupier in ensuring the well-being of workers in the factory. These duties encompass various aspects, which include:

Maintaining safe plant and work systems.
Ensuring safety in the handling, storage, and transport of materials.
Providing necessary information, training, and supervision for worker safety.
Keeping the workplace safe and accessible.
Creating a safe and conducive work environment for workers’ well-being.

In most cases, the owner must formulate and periodically update a written statement outlining their policies and procedures for worker health and safety. This statement should be communicated to all workers as prescribed by law, unless stated otherwise.

RESPONSIBILITIES WITH REGARDS TO ARTICLES AND SUBSTANCES USED:

Sec.7B set forth the responsibilities of individuals or entities in Subsection (1) who are involved in designing, manufacturing, importing, or supplying articles for use in factories. Their duties encompass:

requires that these articles must be designed and constructed to ensure the safety and health of workers when used correctly.
1. mandates the performance of necessary tests and examinations to uphold the safety standards mentioned in Clause (a).
1. necessitates the provision of comprehensive information regarding the article’s usage within a factory, its intended purpose, and the conditions required to maintain safety and worker health.

In situations where articles are designed or manufactured outside India, importer are obliged to ensure that they meet the same or higher safety standards as those adopted in India.

Subsection (2) permits individuals involved in designing or manufacturing such articles to conduct research aiming to identify and, to the extent reasonable, mitigate health or safety risks associated with the article’s design or use.
Subsection (3) clarifies that these obligations do not require the repetition of testing, examination, or research already carried out by others, as long as it’s reasonable to rely on the results.
Subsection (4) specifies that these responsibilities apply exclusively to actions within the scope of one’s business activities and control.
Subsection (5) provides relief to suppliers if articles are supplied based on a written undertaking by the user, depending on the terms of the undertaking.
Subsection (6) stipulates that an article is not considered to be used correctly if it’s used without taking into account any provided information or guidance on its usage from the entity responsible for its design, manufacturing, import, or supply.

CONCLUSION:

The Factories Act has played a very crucial role in improving working conditions and over-all well-being of the factory workers in India. It continues to play a very significant role in contributing towards making the country’s labour laws more complacent and effective. The approval, licensing, and registration of factories, as governed by labour laws like the Factories Act, 1948, are indispensable for ensuring worker safety and workplace compliance. These processes establish a legal framework for safe operations and accountability among factory owners. While complexities exist, they are vital for fostering secure and healthy working conditions. Diligent enforcement and adaptation to changing labour practices and technology are essential for their ongoing effectiveness. These mechanisms contribute to social and economic development by creating productive and secure work environments, balancing industrial progress with the protection of workers’ rights in an ever-evolving industrial landscape.

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