When Does the Factory Act Kick In: At Plan Submission or Manufacturing Start?

Sirs,

I would like to know whether the Factory Act becomes applicable from the day the drawings/plans are submitted to the Factory Inspectorate office or from the day the manufacturing activity is started. Secondly, if the manufacturing activity is not started and the other conditions, i.e., the use of power (DG Sets) and engagement of more than 20 employees, will the Factory Act become applicable.

I request all seniors to share their views on this as this is urgent.

Regards, Anand Gaur

Dear Anand,

The premises you occupy will not become a factory unless you start the manufacturing process therein. Sending building plans for approval and using power for purposes other than the manufacturing process will not make any difference. Section 7 of the Factories Act imposes an obligation on the occupier of the factory to send a notice to the Chief Inspector of Factories 15 days before you intend to start the manufacturing process. This is called obtaining a factory license. Before that, the provisions of the act are not applicable. Feel free to ask if the issue is not clear.

Regards,
Anil Kaushik
Chief Editor, HR Magazine
Smriti Sadan, 28, Raghu Marg, Alwar-301001 (Raj) INDIA
Mobile: 09829133699

Dear Mr. A. Kaushik,

The details provided by you are very valid and helpful. Could you also inform whether just by establishing a small chemical testing laboratory in your business premises for conducting tests on the chemical products being procured and sold by a firm for their trading business amounts to running a factory on the business premises? We are being harassed by the Government Department in Mumbai for not having a factory license for our firm. Please help.

I too wish for clarification on the above query. We have a chemical lab for testing and analysis purposes in Navi Mumbai and have obtained a Shops and Establishment certificate. Do we need a Factory license?

Definition of Manufacturing Process

The term "manufacturing process" refers to 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.
- 5[(ii) Pumping oil, water, sewage, or any other substance; or]
- (iii) Generating, transforming, or transmitting power; or
- 6[(iv) Composing types for printing, printing by letterpress, lithography, photogravure, or other similar processes, or bookbinding;] 7[or]
- (v) Constructing, reconstructing, repairing, refitting, finishing, or breaking up ships or vessels; 7[or]

This is the definition of a manufacturing process as per the Factories Act. Please refer to the second point, point (i), which mentions "otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery, or disposal." In this context, the treatment of chemicals falls under this category, so it is considered a factory, and you need to obtain a factory license.

Regards