The Factories Act, 1948 is one of the earliest welfare legislations aimed to secure health, safety, welfare, proper working hours and other benefits to the workers of the factory. The law requires several compliances on the part of the owner and occupier of the factory and imposes stringent liability on them in the event of contravention of the provisions of the law.
Applicability of the Factories Act, 1948 is contingent upon the definition of factory. Factory is defined under the Act to mean any premises where 10 or more workers are working and a manufacturing process is carried out with the aid of power and where 20 or more workers are working and a manufacturing process is carried out without the aid of power.
Due to widespread economic impact of COVID-19 pandemic, several state governments in India have brought out amendments in the Factories Act, 1948. The amendments propose to increase the threshold of workers in the definition of factory for the applicability of the Act. The amendments have been effected by way of an Ordinance by respective State Governments of Assam on 30th June, 2020, Bihar on 2nd July, Gujarat on 2nd July, Himachal Pradesh on 9th July, Haryana on 20th July and Karnataka on 31st July, 2020. The amendments raise the threshold from existing 10 workers to 20 workers, for factories operating with the aid of power and from existing 20 workers to 40 workers for factories operating without the aid of power, for the applicability of the Act.
The amendments are expected to ease burden of compliance as factories which do not meet the threshold of workers under the Ordinance of the respective State would no longer be required to get themselves registered. This will also encourage setting up of new factories and increase productivity, making up for the loss of time and opportunity.
