Umakanthan53
Labour Law & Hr Consultant
Loginmiraclelogistics
Asso.prof.(commerce & Management)
Kritarth Consulting
Posh Programs; Hr Management Consultants
+1 Other

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We are a private company having factory for manufacturing process and the manufactured product delivered to vendor from factory itself and we have as corporate office as well, regarding the applicability of factory act or shop & establishment act which act we should follow, as there are lot of confusion while considering the leave policy, working hours etc.
Please suggest on this matter

Hi Dhiren,
If your factory and Corp.office are located at different places then you have to follow -
for Factory, the Factories Act and for Corp.office - Shops & Commercial Estt.Act is applicable. Otherwise, if the Corp.office is located within the periphery of factory then you have to abide by the Factories Act for both.

Industrial Undertaing /Establishments where Manufacturing activities take place/are carried out are Covered by Factories Act 1948 and the Amendements thereto Whereas
Commercial Establishments where Non-ManufacturingActivites arecarried on are Covered by Shops & Esta Act and te applicable State Rules.
Your Industrial Esta definitely would already have a Factory License before the Manufacturing Commenced.
Kritarth Team
13 Dec 18

Dear friend,
The purpose of any law, in general, is ensurement of equity to all covered by it. All labor laws, irrespective of their classifications, ensure equitable dispensation of fair treatment to both the partners of production i.e., the employer and the employee. However, this treatment can not be uniform for all activities undertaken by the establishments. So, the basic classification of labor laws commences from establishment orientation and that's how the establishment-specific labor laws like the Factories Act,1948, Shops and Establishments Acts, the Plantations Labor Act,1953 etc., with distinct and different conditions of service of the employees depending on the predominant nature of activities to be performed in the particular establishment. If you indulge yourself into a deep thinking into this, all your confusions would certainly evaporate.
The place your manufacturing activity is carried on including its premises is a factory and the employees required to work there are covered by the provisions of the Factories Act,1948. The procurement of raw materials and their storage there, the delivery or despatch of finished products from there, the upkeep of documents related to the activities carried on there are only incidental to the predominant activity of manufacture.
The corporate office is the centre from where the entire affairs of the company are planned, organized and controlled. Therefore, it would be an establishment under the State Shops and Establishments Act if it falls within the geographical area of application of the Act.
Therefore, the conditions of service of the employees in such different types of establishments belonging to the same Corporate entity would vary according the establishment-specific labor law applicable to them. You have to devise your leave policy etc., accordingly only. In case if your management is interested in uniformity in such matters, they must be prepared to grant some concessions based on the more beneficial one.

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