Mr.kumar
The significance of the "premises and precincts" principle cannot be negated altogether since it is a part of the definition of factory itself under Factories Act with some exceptions as explained by you.For example, in the instant query itself, if the head office is loacted outside the premises of factory and precincts of the factory, it is debatable whether such administrative office will still be part of the factory and is covered by the Factories Act.
B.Saikumar
HR &Labour Law Advisor
Mumbai
From India, Mumbai
1897The significance of the "premises and precincts" principle cannot be negated altogether since it is a part of the definition of factory itself under Factories Act with some exceptions as explained by you.For example, in the instant query itself, if the head office is loacted outside the premises of factory and precincts of the factory, it is debatable whether such administrative office will still be part of the factory and is covered by the Factories Act.
B.Saikumar
HR &Labour Law Advisor
Mumbai
From India, Mumbai
Dear friends,
This is a basic concept so long as the entity is one & the same there cannot be two diff. laws applicable just because they are located in different places and they are of diff. categories. They covered by a common wage agreement, SO, PF, ESI etc. The attached write up/ref. may help. There are also so many ref. on this issue.
kumar.s.
From India, Bangalore
This is a basic concept so long as the entity is one & the same there cannot be two diff. laws applicable just because they are located in different places and they are of diff. categories. They covered by a common wage agreement, SO, PF, ESI etc. The attached write up/ref. may help. There are also so many ref. on this issue.
kumar.s.
From India, Bangalore
Ms.Sikha
I have experienced the same!!!! we have factory at ground floor and administrative office situated at first floor ,consulting of advocate i took shops &commercial establishment registration to administration floor, now inspector of factories objected that even though administration office in the same premises it has to cover only in the factories act. please kindly go through the definition of "factory"
I hope this gives you enough scope to act accordingly
Thanks
Naresh.Gadde
Andhar Pradesh
From India, Hyderabad
I have experienced the same!!!! we have factory at ground floor and administrative office situated at first floor ,consulting of advocate i took shops &commercial establishment registration to administration floor, now inspector of factories objected that even though administration office in the same premises it has to cover only in the factories act. please kindly go through the definition of "factory"
I hope this gives you enough scope to act accordingly
Thanks
Naresh.Gadde
Andhar Pradesh
From India, Hyderabad
Dear member
It is interesting to note that the query posed by Ms Shikha Joshi generated a lively discussion on the contentitious issue whether Factories Act or Shops Act is applicable to the head office which administers the affairs of the factory. I appreciate the opinion of Mr.Kumar. S and the attachment provided by him containing some decisions on factory which is really informative. However I would like to offer a different legal perception to this issue.
I observe that the decisions contained in the attachment on factory arose under the Employees’ State Insurance Act 1948 but not under the Factories Act. Though the definition of factory under ESI Act, is similar to that in the Factories Act but it is not pari materia (on par with) with the definition under Factories Act since both Acts have different objects.
The object of Factories Act is to regulate the working conditions of the factory workers by initiating measures to protect the workers against ill-health, hazards and perils of working in a factory. Thus the definition of factory needs to be understood not only with reference to the definition of manufacturing process under Sec.2(k) but also with reference to the definition of ‘worker’ under Sec.2(l) of the Factories Act which defines a worker as a person involved in manufacturing process or cleaning of machines or any work incidental or connected with manufacturing process.
Thus the Factories Act does not want to cover an employee who is doing a clerical job or administrative work in a cosy well ventilated head office sitting under a fan or air conditioner and does not face flames or fire, fumes or feeble light and who is not likely to be exposed to ill health or hazard or accident whether the office is located in the same premises or compound or at different premises.
Thus in the case of Inspector of Labour V. General Manager ILTD, 1982 II LLN 174 (APHC), it was held that a clerical establishment located in a separate wing in the same compound was held as not factory.
In Commonwealth Trust India Ltd V. Labour Commissioner 2009 II LLJ 494(Ker HC), it was held that a head office which runs a factory is not an industrial establishment and hence to be covered by the Shops and Establishments Act.
However where the work of some personnel may not be directly connected with manufacturing process but incidental to manufacturing process as in the case of Time Keepers who need to supervise the workers, they may fall within the ambit of ‘worker’ under Factories Act.
It is also permitted under law to have two sets of service conditions for two different classes of employees.
On the other hand the object of ESI Act is to extend financial and medical help to an employee once he is truck by such ill health, hazard or accident in discharge of his duties. The ESI Act does not refer to the beneficiaries under the Act as ‘workers ‘ but refers to them as ‘employees’ so as to rope in not only the employees working in the manufacturing process but also those working in head offices within the definition of employee and factory by applying principles of ‘unity of function’ or ‘nexus with the manufacturing process’ etc. Therefore the definition of factory under ESI Act is wider than that under Factories Act.
It is an established principle of law that unless an expression used in one Act is on par with that in another Act, it’s meaning under one Act cannot be imported into another Act since each Act is a self contained code to serve different purpose and thus the words and expressions need to be understood within the four corners of the said Act only. Thus An administrative Office looking after the affairs of a factory can be termed as part of factory under ESI but need not necessarily to be so under the Factories Act .Thus the issue is vexatious and cannot be dealt with on grounds of administrative convenience but only on grounds of legal prudence.
B.Saikumar
HR &Labour Law Advisor
Mumbai
From India, Mumbai
It is interesting to note that the query posed by Ms Shikha Joshi generated a lively discussion on the contentitious issue whether Factories Act or Shops Act is applicable to the head office which administers the affairs of the factory. I appreciate the opinion of Mr.Kumar. S and the attachment provided by him containing some decisions on factory which is really informative. However I would like to offer a different legal perception to this issue.
I observe that the decisions contained in the attachment on factory arose under the Employees’ State Insurance Act 1948 but not under the Factories Act. Though the definition of factory under ESI Act, is similar to that in the Factories Act but it is not pari materia (on par with) with the definition under Factories Act since both Acts have different objects.
The object of Factories Act is to regulate the working conditions of the factory workers by initiating measures to protect the workers against ill-health, hazards and perils of working in a factory. Thus the definition of factory needs to be understood not only with reference to the definition of manufacturing process under Sec.2(k) but also with reference to the definition of ‘worker’ under Sec.2(l) of the Factories Act which defines a worker as a person involved in manufacturing process or cleaning of machines or any work incidental or connected with manufacturing process.
Thus the Factories Act does not want to cover an employee who is doing a clerical job or administrative work in a cosy well ventilated head office sitting under a fan or air conditioner and does not face flames or fire, fumes or feeble light and who is not likely to be exposed to ill health or hazard or accident whether the office is located in the same premises or compound or at different premises.
Thus in the case of Inspector of Labour V. General Manager ILTD, 1982 II LLN 174 (APHC), it was held that a clerical establishment located in a separate wing in the same compound was held as not factory.
In Commonwealth Trust India Ltd V. Labour Commissioner 2009 II LLJ 494(Ker HC), it was held that a head office which runs a factory is not an industrial establishment and hence to be covered by the Shops and Establishments Act.
However where the work of some personnel may not be directly connected with manufacturing process but incidental to manufacturing process as in the case of Time Keepers who need to supervise the workers, they may fall within the ambit of ‘worker’ under Factories Act.
It is also permitted under law to have two sets of service conditions for two different classes of employees.
On the other hand the object of ESI Act is to extend financial and medical help to an employee once he is truck by such ill health, hazard or accident in discharge of his duties. The ESI Act does not refer to the beneficiaries under the Act as ‘workers ‘ but refers to them as ‘employees’ so as to rope in not only the employees working in the manufacturing process but also those working in head offices within the definition of employee and factory by applying principles of ‘unity of function’ or ‘nexus with the manufacturing process’ etc. Therefore the definition of factory under ESI Act is wider than that under Factories Act.
It is an established principle of law that unless an expression used in one Act is on par with that in another Act, it’s meaning under one Act cannot be imported into another Act since each Act is a self contained code to serve different purpose and thus the words and expressions need to be understood within the four corners of the said Act only. Thus An administrative Office looking after the affairs of a factory can be termed as part of factory under ESI but need not necessarily to be so under the Factories Act .Thus the issue is vexatious and cannot be dealt with on grounds of administrative convenience but only on grounds of legal prudence.
B.Saikumar
HR &Labour Law Advisor
Mumbai
From India, Mumbai
Dear friends,
Please also go thro' the SC. judgment on the "Precincts" under the Factory Act itself as discussed in the attachment. Its all depends on as to how we intend to take the interpretations made in these judgments. Like this there are so many judgments by various High Courts and by S.C. Of course these judgments not only on the Factory Act matters but also linked to PF/ESI and other acts as well. Some viewers may try to consider the judgment as very old and not relevant to the references made. Nevertheless it would be in the best interest of the persons concerned not to interpret the law to narrower reading.
kumar.s.
From India, Bangalore
Please also go thro' the SC. judgment on the "Precincts" under the Factory Act itself as discussed in the attachment. Its all depends on as to how we intend to take the interpretations made in these judgments. Like this there are so many judgments by various High Courts and by S.C. Of course these judgments not only on the Factory Act matters but also linked to PF/ESI and other acts as well. Some viewers may try to consider the judgment as very old and not relevant to the references made. Nevertheless it would be in the best interest of the persons concerned not to interpret the law to narrower reading.
kumar.s.
From India, Bangalore
Dear all,
I am working with one automobile dealer, who is selling cars and providing services like repairing, denting, painting, washing, greasing. We also sale the spare parts, so it is called as 3S (Sales, spares & services). These activities are carried out in same precincts. We have 100 employees working in our organization.
We have a factory licenses also but I need a expert opinion from your side that whether the provisions of shops and establishment is applicable to us. We are selling the cars in that premises.
From India, Pune
I am working with one automobile dealer, who is selling cars and providing services like repairing, denting, painting, washing, greasing. We also sale the spare parts, so it is called as 3S (Sales, spares & services). These activities are carried out in same precincts. We have 100 employees working in our organization.
We have a factory licenses also but I need a expert opinion from your side that whether the provisions of shops and establishment is applicable to us. We are selling the cars in that premises.
From India, Pune
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Brief Kerla Shop & Establishment Act.pdf
FORM C- under Shop & Commercial Establishment-1 958.xls