Dear all, I need guidance. We are having a manufacturing plant at Vadodara and we have obtained a Factory license and all compliance followed as per factory act.
Just opposite of the existing factory we have taken warehouse property on rental. Please guide if the rental property comes under the shop and establishment act or not?
Expecting the earliest reply on this.

From India, Ahmedabad
Labour Law & Hr Consultant
Partner - Risk Management
Principal Consultant | Director
Management Consultancy
Nagarkar Vinayak L
Hr And Employee Relations Consultant

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Dear Suraj,

Any place/space falling outside the approved plan of the factory will not form part of the premises and precincts earmarked for the purpose of registration under the Factories Act,1948. In such a situation, the establishment-specific law applicable to that place depends on the nature of activity carried on there only. Particularly when the building/place just across the same street or opposite to the existing factory premises is used as a warehouse on rent would be covered by the State Shops and Establishments Act only if the area is one falling under the same Act.

From India, Salem

Dear Suraj,

If the warehouse is not situated adjacent to the factory , then the said warehouse will come under the Shops and Establishment Act and you need to take the registration under the said Act.

From India, Chennai

The storage facility is a part of the manufacturing activity undertaken, the Section 2 (k) of the Factories Act 1948 defines Manufacturing Process as under:
(k) “manufacturing process” means any process for—
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal,
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage;
So packing the goods or keeping goods for its sale or disposal would come within the manufacturing process.
The warehouse is opposite the factory, so it is appurtenant to the factory building. Furthermore, there will be regular crisscrossing of workmen between the factory and warehouse every now and then. So it is to be mentioned as a part of the factory and the Factory License shall be amended to include it, if it is already not done so. For practical reasons, it is advisable to avoid registering it under Shop & Establishment Act

From India, Mumbai
Dear members, Appreciate you all for replying at the earliest. But I am a little bit confused, since I got two different views.
From India, Ahmedabad

You can make the storage facility to be a part of the factory in case you have not done so as it comes within the fold of the manufacturing process as per Factories Act 1948.
From India, Mumbai

Dear Rathod,

You need not get confused by Mr.KK!HR's answer and that of mine. In fact both are the same but couched differently. A warehouse, godown or similar storage facility belonging to a registered factory but situated beyond its approved periphery would normally come under the Shops and Establishments Act only. But, if any activity analogous to manufacturing process like mixing of different components, packing etc is carried on there itself with 10 or more employees with the aid of power or with 20 or more employees without the aid of power, then it would be a factory falling under the Factories Act,1948 only.

From India, Salem
Nagarkar Vinayak L

Dear Colleague,

In my view, you have option but no compulsion to show the warehouse premises as a part of the Factory. But it would be advantageous to do so if your factory operations are in shifts and you want warehouse also to work in shifts as well as intend to have uniformity in service conditions between factory and warehouse workers. If your decision is in faviour of this, you need to amend your plans by including it and get it approved from the Factory Inspectorate.

If not, cover it under the State Shops and Establishment Act/Rules. You need to cover it under any one of the two Acts.


Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

Mr. Rathod,

I think you want to have the warehouse as a part of the same factory license.
That is allowed. Under Gujarat Factory Rules, you can make a request to include a premise in the same factory license that is not physically connected to the main factory. You will need to go through the Factory rules to find the exact provision.

In fact, there is no restriction on the distance between the 2 plots, though the Chief Inspector is unlikely to allow inclusion of a place that is actually far away.

The advantages are :
1. You do not need to maintain separate registers for those working in the warehouse
2. The Leave rules would be the same (Shop Act has more leaves)
3. Separate license, returns, etc is not required.
4. You can move workers from the factory to the warehouse and vice versa as needed. You can not do that if they are under separate license because you need to then have them as employees of 2 separate establishments and it will mess up your payroll.
5. Any contract worker can also move between the 2 premises without causing any problem

From India, Mumbai

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