Are Building and Construction Workers Acts Applicable to Factories Act Projects? Seeking Clarity on Legal Confusion in Gurgaon

Dear Friends,

Are B&OCW (RE&CS) Act 1996 and Building and Other Construction Workers Welfare Cess Act also applicable to the building and construction work that is covered under the Factories Act 1948?

As per Sec. 2(d) of the Act, it clearly provides that it does not include building and other construction work to which the provisions of the Factories Act 1948 apply.

However, in Gurgaon, the officials of the Factories department are insisting on depositing the cess for such types of constructions before considering the application for an occupancy certificate.

1. Have any new notifications or amendments been issued to cover the premises that are presently covered under the Factories Act?

2. Can a state override the provisions of a Central Act?

Please suggest.

Regards,
Sanjiv Sharma
9810121619

Dear,

Please ask them for the demand in writing. In case you contend that the Factories Act application provides for an exemption, you can obtain a stay from the High Court by filing a Writ. Oral demands are of no avail and may only serve to instill fear in the industry.

With kind regards,

V. Sounder Rajan
Chennai – 600001
Off: 044-42620864, 044-65874684

Dear friends,

The building being constructed will not turn into a factory unless one of the ingredients of the Factories Act, 1948, i.e., the 'manufacturing process' within the meaning of section 2(k) of the Act is present. Hence, you would appreciate that the Factories Act, 1948, will come into play only when some manufacturing process starts in the building.

The parliament, in its wisdom, has not applied the BOCW Act to the factories as the Factories Act, 1948, contains provisions regarding health, safety, welfare, and working hours of the workers, and the same provisions are also incorporated in the Act and Rules under BOCW. The provisions might clash.

For these reasons, the BOCW Act would be applicable to a building being erected which has not yet turned into a factory. Hence, the Labour Authorities are justified in asking cess under the BOCW Welfare Cess Act.

Best wishes,

Jpratap

Dear Jpratap,

This means that all the construction activities of the factory building will be covered under the cess provisions, as approval of the factory premises will only be received from the factory department after its completion. In our case, we have made some construction for the expansion of the existing storage warehouse and admin block; for the same, the drawings were already approved by CIF, Chandigarh. To my understanding, if the drawings and final completion are being certified by the Factories Dept. under the Factories Act, then the provisions of cess and the subjected act shall not apply. In such a case, what is the meaning and relevance of the exemption of any building and other construction work to which the provisions of the Factories Act 1948 apply? Which type of construction does the B&OCW (RE&CS) Act 1996 in Sec. 2(d) of the Act refer to, which is exempt?

Regards, Sanjiv Sharma

Dear Sanjeev,

Again, the logic is the same. Please read the definition of 'factory' given in section 2(m) of the Factories Act, 1948.

Section 6 of the Factories Act deals with approval, licensing, and registration of the factories. Under section 6(1)(e), no license can be granted to you unless you give notice as specified in section 7. Please also read the Explanation to section 6(3) of the Act. According to section 7, the occupier has to give notice of at least fifteen days before he begins to occupy or use the premises as a factory.

Hence, unless you start the manufacturing process, it cannot be a factory.

Secondly, while erecting a building, you may have employed about 20 workers, but you may be running a factory with 100 or more workers. The situation can be vice-versa. The factory fee depends on the power load being used and the number of workers employed in a factory and not in the construction of the same.

Best wishes,
Jpratap

If the project is of greenfield nature, the BOCW Act is applicable. For the expansion of an existing factory, the Factory Act is applicable, as this act takes care of the interests of the workmen. Hence, the BOCW Act is not applicable in this case.

Dear Bhuvan,

I couldn't understand what you want to convey. Please make it more clear.

jpratap

"Building or other construction work" means the construction, alteration, repairs, maintenance, or demolition of or in relation to buildings, streets, roads, railways, tramways, airfields, irrigation, drainage, embankments, and navigation works, flood control works (including stormwater drainage works), generation, transmission, and distribution of power, waterworks (including channels for the distribution of water), oil and gas installations, electric lines, wireless, radio, television, telephone, telegraph, and overseas communications, dams, canals, reservoirs, watercourses, tunnels, bridges, viaducts, aqueducts, pipelines, towers, cooling towers, transmission towers, and such other work as may be specified in this regard by the appropriate Government through notification. However, it does not include any building or construction work to which the provisions of the Factory Act, 1948 (63 of 1948), or the Mines Act, 1952 (35 of 1952), apply.

If the Factory Act is already in force, the BOCW Act is not applicable. Conversely, if the construction of a new factory is underway without obtaining the necessary factory license, the BOCW Act applies.

Please provide me the copy or gist of the Madhya Pradesh High Court's judgment on the Building and Other Construction Workers Act. The citation is 2010 LLR MP HC 165.