Can a Factory and Office Staff Coexist on the Same Premises? Exploring the Possibilities

Can shops and commercial establishments (only the office staff) and a factory (where the manufacturing process takes place) exist on the same premises? If yes, how can they be distinguished? If no, why can't they coexist?

Regards,
Mahesh
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There is nothing wrong with it because a factory may have its office situated in the same premises where the factory is located or within the boundary of the factory. In such a case, the office will also come under the purview of the Factories Act. At the same time, if the office is outside the boundary of the factory, the office shall have separate registration, and that will fall under the State's Shops and Commercial Establishments Act.

If the shop functioning within the factory premises does not have a separate business, then no separate registration under the Shops Act is required. However, the person or persons working therein will be considered as workmen of the factory, and all statutory rights enjoyed by the factory workers will be applicable to the workers of the shop as well. Therefore, if the shop is to be treated as a separate entity, it should function outside.

Regards,
Madhu.T.K

Yes, it is possible that a Factory License and a Shop & Est License can be obtained on the same premises. We obtained our factory license for the Ground Floor by approving the layout of the Ground Floor and also obtained a Shop & Est license for the First Floor. During the license acquisition process, we discussed this with the factory inspector, and he confirmed that both licenses can be obtained on the same premises.

Regards,
Ashok More

That's great to hear, Ashok! I would really appreciate it if you or anyone else in the forum could shed more light on the reasoning given to justify the fact that both the factory and office can coexist on the same premises within the same organization. I have a similar assignment at hand.

Regards,
Mahesh

I would like to add that if there is a separate building where different operations are carried out and these operations are not connected or related to the plant operations process, the PE has to obtain a license under the Shops and Establishments Act for such operations in addition to the Factory license, even if the building is within the boundary wall of the PE premises.

Regards

Yes, it can be, because under Factory Management, provision shops, cloth shops, vegetable shops, gas dealerships, petrol bunks, etc., will be operating under the roof of the factory management. In such cases, Shops & Establishment Licenses are mandatory. A factory operates in accordance with the Factories and Shops & Other Establishments Act. Both have separate entities.

Regards,
D. Gurumurthy LL. HR & IR Consultant Hyderabad.

Guys, thanks for the thoughtful insights! Just got to know that the provision for SCE and Factory in the same premise can very well be made! Hence, I would like to share this information with you.

Drawing Submissions

1. Drawings submitted to the inspector of factories should exclude the office to be shown as shops and commercial establishments on the premises. Subsequent inspections by the authority to the premises would, therefore, be restricted to the drawings submitted for the factory and for the SCE (basic drawing) with respect to the applicable compliance part, respectively.

Separate Registrations

2. Separate registrations need to be obtained from the competent authority for SCE and Factories, specifying clearly the premises.

Separate Entrances

3. Separate entrances for both SCE and Factories must be ensured mandatorily.

The benefit of performing the above act would result in avoiding certain welfare measures to be provided under the factories act. However, as a gesture of goodwill and good practices, one may still choose to extend statutory or non-statutory facilities to workers. Hence, benefits for PE would be more in the form of discretion, not as compulsion!

May follow if anyone wishes. Any thoughts on this are welcome!

Regards,
Mahesh