What is a factory?

Write detail about

approval, licensing and registration of
factories under factories act, 1948
Section 2(m) in The Factories Act, 1948

(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, railway
running shed or a hotel, restaurant or eating place].
[Explanation [I].—for computing the number of workers for the purposes of
this clause all the workers in [different groups and relays] in a day shall be taken
into account;]
[Explanation II.—For 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;]
Section: 6

Approval, licensing and registration of factories under Factories Act, 1948.

(1) The State Government may make rules—

(a) requiring, for the purposes of this Act, the submission of plans of any class or
description of factories to the Chief Inspector or the State Government;
(aa) requiring, the 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 or extension of any factory or class or description of
factories;
(b) requiring for the purpose of considering applications for such permission the
submission of plans and specifications;
(c) Prescribing the nature of such plans and specifications and by whom they shall
be certified;
(d) requiring the registration and licensing of factories or any class or description
of factories, and prescribing the fees payable for such registration and licensing
and for the renewal of licenses;
(e) requiring that no license shall be granted or renewed unless the notice
specified in section 7 has been given.
(2) If on an application for permission referred to in clause (aa) of sub-section (1)
accompanied by the plans and specifications required by the rules made under
clause (b ) of that sub-section, sent to the State Government or Chief Inspector by
registered post, no order is communicated to the applicant within three months
from the date on which it is so sent, the permission applied for in the said
application shall be deemed to have been granted.
(3) Where a State Government or a Chief Inspector refuses to grant permission to
the site, construction or extension of a factory or to the registration and licensing
of a factory, the applicant may within thirty days of the date of such refusal appeal
to the Central Government if the decision appealed from was of the State
Government and to the State Government in any other case.
Explanation : A factory shall not be deemed to be extended within the meaning of
this section by reason only of the replacement of any plant or machinery, or within
such limits as may be prescribed, of the addition of any plant or machinery if such
replacement or addition does not reduce the minimum clear space required for
safe working around the plant or machinery or adversely affect the environmental
conditions from the evolution or emission of steam, heat or dust or fumes injurious
to health.
Define the industrial dispute.
Describe the provision related to
strike, lock out, and lay off and
retrenchment.
According to the Industrial Disputes Act, 1947, Section 2(k),
“Industrial disputes mean any dispute or difference between employers and
employers, or between employers and workmen or between workmen and
workmen, which is connected with the employment or non-employment or terms
of employment or with the conditions of labour of any person.”
Industrial disputes, mean disputes relating to existing industry. It must be a real
dispute and the person regarding whom the dispute is raised and the parties to a
dispute must have a direct or substantial interest.

Industrial disputes are a part of organizational life and arise out of various
economic or non-economic causes. The economic causes relate to compensation
such as wages, bonus, allowances, conditions of work, working hours, leave,
holidays without pay, unjust layoffs, and retrenchments. The non-economic factors
include victimization of workers, ill-treatment by staff members, sympathetic
strikes, political factors, indiscipline, etc.
Trade unions and other forums generally bargain for higher wages and allowances
to meet the rising cost of living and to increase their standards of living. Differences
of opinion in these issues lead to disputes. Retrenchment and layoffs also continue
to be important factors that give rise to industrial disputes. Indiscipline, unruliness,
disorderliness, disruptive behaviour, aggression, hostility, violence, etc., jeopardize
the normal working in any type of organization. Industrial disputes also revolve
around the number of leaves and working hours though they have not been so
important causes.
.
1. Strikes:
Strikes are the off-shoot of more fundamental maladjustments, injustice, and
economic disturbances. According to Peterson, “Strike is a temporary cessation of
work by a group of employees in order to express their grievances or to enforce a
demand concerning changes in work conditions”.
According to Section 2(q) of the Industrial Dispute Act, 1947, “Strike is a cessation
of work by a body of persons employed in any industry acting on combination, or a
concerted refusal under a common understanding of a number of persons who are
or have been employed to continue to work or to accept employment”.
2. Lockout:
According to Industrial Disputes Act, 1947, lockout means closing of a place of
business of employment or the suspension of work or refusal by an employer to
continue to employ any number of persons employed by him. Thus, lockout means
refusal of employer to give work to workmen with the intention of arm-twisting
them to accept the will of the player or to force workers to withdraw their
demands.
Following acts do not amount to lockout:
i. Termination of employee by retrenchment.
ii. Termination of more than one person at a time.
iii. Prohibiting an employee from working.
iv. Declaration of lockout on the ground that workers have refrained from attending
work.

Prohibition of Strikes and Lockouts:

Employees are prohibited from striking according to the section 22 of Industrial
Disputes Act, 1947. Employees, who are working in a public utility service, cannot
go on a strike without giving a notice of strike within the six weeks before striking.
They cannot go on strike either within fourteen days of providing the strike notice
or before the expiry of the date of strike specified in any such notice.
The same rule applies to the employers. Employers who are carrying on a public
utility service cannot lockout any of their employees without giving them a prior
notice within six weeks before the lockout or within the fourteen days of giving
such a notice. Moreover, the notice of strike or lockout is to be given in a prescribed
manner showing the number of persons involved in the strike/lockout.
A notice should be issued on the day on which the lockout is declared just to
intimate the appropriate authorities about the lockout. The employer is supposed
to report the number of notices of strikes received by him to the appropriate
government or the authority prescribed by the government within the five days of
receiving such notices.
Illegal Strikes and Lockouts:
A strike or a lockout is illegal if it is declared in noncompliance with the section 22
of Industrial Disputes Act 1947, that is, if the notice period is not served or if the
strike is held within the fourteen days of issuing the notice of strike. If a strike or
lockout has already taken place and is being referred to a Board, the continuance
of such a strike or lockout is not illegal provided it is in compliance with the
provisions of Act. Moreover, a lockout declared in consequence of an illegal strike
or a strike declared in consequence of an illegal lockout shall not be deemed to be
illegal.
Penalty for Illegal Strikes and Lockouts:
A workman who is involved in an illegal strike can be penalized with imprisonment
for a term extendable to a month or with a fine or fifty rupees or both. In similar
way, an employer who initiates and continues a lockout is punishable with
imprisonment extendable to a month or with a fine of one thousand rupees or
both.
According to Section 25 of Industrial Disputes Act 1947, no person should provide
any sort of financial aid to any illegal strike or lockout. Any person who knowingly
provides such a help in support of any illegal strike or lockout is punishable with
imprisonment for a term which may extend to six months, or with fine which may
extend to one thousand rupees, or with both.

3. Lay-Off
To start off, let us look at how the act defines the concept of Lay-off. The term ‘lay-
off’ has been defined as the failure, refusal or inability of an employer on account
of the shortage of coal, power or raw materials or the accumulation of stocks or
the breakdown of machinery or natural calamity or for any other unconnected
reason to give employment to a workman whose name is borne on the muster rolls
of his industrial establishment and who has not been retrenched.

Essentially, a lay-off is a condition where the employers are constrained to deny

work to their workforce owing to conditions that bring forth a temporary inability
to keep their business going. The said case scenario can happen only in a continuing
establishment.

Essentials: The conditions where Lay-off could be brought into play are:

• There has to be a failure, refusal or inability of an employer

• This failure, refusal or inability should be an offshoot of the shortage of coal,
power or raw materials or the accumulation of stocks or the breakdown of
machinery or natural calamity or for any other unconnected reason
• The names of the laid-off workers should necessarily feature on the muster
rolls of the establishment
• The said workers should not have been retrenched

Special Provisions:

The employer cannot, without prior permission from the appropriate government,
lay-off an employee featuring on the muster rolls of the establishment A copy of
the said application has to be given to the concerned workmen as well. If the lay-
off happened where the workmen (other than badli workmen or casual workmen)
of an industrial establishment, being a mine, owing to reasons of fire, flood or
excess of inflammable gas or explosion, the employer, in relation to such
establishment, shall, within a period of thirty days from the date of commencement
of such lay-off, apply in the prescribed manner, to the appropriate Government or
the specified authority for permission to continue the lay-off. The said application
will be considered and a reasonable opportunity to be heard shall be given to the
employer as well as the workmen. After considering the same, the appropriate
government may or may not grant the employer to close down. Even here, if the
government does not respond within sixty days from application, the permission
will be deemed to have been granted. There are provisions for review of the said
decision by the authority
suo-moto or in response to an application.
Compensation for Laid-Off period: A workman who is laid-off is entitled to
compensation equivalent to 50 percent of the total basic wages and dearness
allowance for the period of lay-off. The said compensation can be availed only if
the employee has done a continuous service of at least one year; this will be
detailed in an upcoming section of this article. Along with this, the muster rolls of
the establishment should bear the worker’s name to avail of the compensation.
A badli or casual worker cannot avail of such compensation. Refusal to accept
alternative employment, absence from the establishment, strike or deliberate
slowing down of production could be grounds that would entail disentitlement to
such compensation.
If such Lay-off exceeds 45 days, the employer can either keep paying such lay-off
compensation or retrench the workers. Nonetheless, retrenchment should
necessarily be applied abiding by the procedure set out by the statute; this will be
described in detail in the upcoming section which deals with retrenchment.

4. Retrenchment

The Act defines “Retrenchment” as the termination by the employer of the services
of a workman for any reason whatsoever, otherwise than as a punishment inflicted
by way of disciplinary action, but doesn't include-

(a) Voluntary retirement of the workman; or

(b) Retirement of the workman on reaching the age of superannuation if the

contract of employment between the employer and the workman concerned
contains a stipulation in that behalf; or

Termination of the service of the workman as a result of the on-renewal of the

contract of employment between the employer and the workman concerned on its
expiry or of such contract being terminated under a stipulation in that behalf
contained therein; or
(c) Termination of the service of a workman on the ground of continued ill-health;

Here, the key ingredient is the termination of a workman from service, by the
employer. This does not mean the employer can retrench a worker as a punishment
by way of disciplinary action. Further, this scenario strictly does not include the
above-mentioned conditions contemplated under the subsection.

Special Provisions:

It is pertinent to note that a worker who has served for at least a year of continuous
service cannot be retrenched unless served a notice three months in advance and
prior permission from the appropriate government. The said application has to be
submitted by the employer along with the reasons for such retrenchment. The said
application will be taken into consideration and scrutinized through an inquiry.
They shall provide an opportunity to be heard for both sides and may decide on the
outcome of the application for reasons recorded in writing. If there’s no reply from
the appropriate government for a period of sixty days from the date of application,
the permission shall be deemed to have been granted. Further, it is to be noted
that the said decision could be reviewed by the said appropriate government suo-
moto or on application from any of the sides.