Are We Covered Under the Factory Act? Seeking Advice on Licensing Requirements

Sir, please help me. I am working with a company where 15 people are employed. We use power, but the electric meter is in the landlord's name, and we only pay the building rent. In the same premises, there is another shed with a different name where a factory is operating, which is covered under the Factory Act. Sir, please tell me if we are also covered under the Factory Act. If we are covered, do we need a separate factory license or not?

Hitesh Kaushik

Dear Hitesh,

You should be covered under the Factories Act, and you should obtain a separate license. Power does not only mean electric power; if you have any other source of power like a generator, that is also power. So, it is immaterial whose name power connection is there.

Thanks,
J. S. Malik

Dear Hitesh,

The first and foremost criterion for the applicability of the Factories Act is if the establishment carries out any operation which falls under the "manufacturing process" as defined under the Factories Act.

If it falls under the manufacturing process and is carried out by 10 or more workers with power OR 20 or more workers without power, then it is defined as a factory, provided it does not fall within the establishments which have been excluded in its proviso.

The source of power is not a defining criterion, so it is immaterial under whose name the Electric Meter is present.

Regards,

SC

It seems that you are involved in a manufacturing process and are using machines powered by electricity for manufacturing. Therefore, you automatically fall under the category of factories with at least 15 employees. According to the law, if you are engaged in manufacturing with a power of 1/4 hp and have 10 employees, you fall under the purview of factories. Furthermore, whether you have your own power meter or are borrowing power from somewhere else, you need to obtain a separate license of your own.

Regards,
Soundar.