Can an Employee Be the Occupier Under the Factories Act? Seeking Recent Case Laws for Clarity

Dear All,

Can anybody come up with the latest Supreme Court case law under the Factories Act regarding the Occupier? I have a situation on hand: My company is engaged in a project, and we are in the process of registering our factory. We intend to designate our Head of the unit (an employee of the company) as the occupier, whereas the act specifies that only the director can be the occupier.

Could somebody provide information on the most recent case laws concerning whether an employee can be appointed as an occupier of the factory? If so, under which case law? There is a case from 1982, but I would prefer a more recent one for reference.

Regards,
Anand

Dear all,

Addendum to the above question: Can anybody tell me, "Whether a non-resident Director of a company staying outside India and who is a foreign national can be the Occupier of a factory in India"? It would be great if it can be substantiated with relevant documents.

Regards,
Subrata

Dear Subrata,

In my view, one of the directors of the company should be the occupier. A director not staying in India should not be the occupier of the factory. Suppose there is a major accident in the factory and the occupier is staying abroad, then how can the occupier be arrested for any irregularity? Let others give their suggestions.

Thanks,
JS Malik

Dear all,

I believe that if the occupier is foreign, the Manager of the Factory will be responsible for all the issues in the Factory. In most MNCs, the Director/Occupier will be abroad while the Manager will be held accountable.

Regards,
Sudharshan

Dear All,

As per my understanding, for a Pvt company, there should be two directors and for a public company, there should be three directors. However, there is no rule that there should be a resident director. In case there is no resident director, the directors can appoint another employee who will be responsible for compliance and in cases of emergency.

A director can be of three types:

1. Alternate Director: In case a director is out of India for a certain period of time, the directors can appoint another person as an alternate director who will be in charge of the company or the operations. In this case, the shareholders' approval is not required.

2. Additional Director: In this case, provided there is a requirement, the board of directors through an AGM can appoint an additional director post the shareholders' approval.

3. Director: A director can be appointed through an AGM post the approval of the shareholders.

In cases 2 & 3, Form 32 has to be submitted to ROC informing the inclusions within a month.

In all three cases, the appointee can be an employee of the company, holding another office such as a Manager, AVP, VP, AGM, GM, etc., provided he/she is not a minor. The appointee can also be an outsider who is not relevant to the company, provided they are not insolvent.

Thanks and Regards,
Siva

Dear All,

Under the Factories Act, only a director can be the occupier who has ultimate control over the affairs of the factory, and no one else can be appointed as an occupier even if the Board passes a resolution to that effect (in the case of a company only). In the particular query where the foreign director can be appointed as an occupier, the reply to the said query depends on whether that particular director has the ultimate control over the affairs of the factory. If yes, he can be nominated by the Board as an occupier.

Regards,