Navigating Holiday Declarations for Factories in Maharashtra: What Are the Legal Requirements?

Dear Members,
We are a manufacturing unit situated in Maharashtra. During one of the interactive sessions, a question cropped up to which I have no satisfactory answer except for saying that it is a common practice. It is a humble request to the forum to guide me on the same.

Query on Holiday Declarations under Factories Act

"Factories Act does not have any mention of any specific holidays unlike shops and establishments, and the National Holidays and Festival Act has not been adopted by the state of Maharashtra. Is it compulsory to declare holidays on Jan 26, May 1, August 15, and October 2? If yes, please provide the relevant act and rules for the same. If no, can we operate our units in Maharashtra on these days if we have not mentioned it as a holiday in our holiday list without any technical issues from the government authorities."

Regards,
Preetam Deshpande

Holiday Regulations in Maharashtra

Maharashtra does not have a Festival and National Holidays Act. However, it is a recognized practice that the three national holidays must be given. If you work on that day, workers must be paid overtime. You are required to provide the list of holidays at the start of the year. If you do not include these holidays, you will receive a notice from the factory inspector.

Regards,

Industrial Standing Orders and Holiday Compliance

Please check the industrial standing orders applicable to your factory. The Model Standing Orders (Central) provide for 8 holidays, of which 4 are compulsory national holidays: January 26, May 1, August 15, and October 2. Therefore, irrespective of whether your state has a Festival Holidays Act, you are required to give these days as holidays (unless you have modified the standing orders to exclude them).

It is only the Shops and Commercial Establishments Act that specifies January 26, May 1, August 15, and October 2 as paid holidays on which the establishment shall remain CLOSED. However, the act also permits work on these days if employees are paid overtime and also receive a compensatory paid holiday!

The Factories Act has NO such provisions, and therefore, technically, you can operate your manufacturing units on these days—the presumption being that all such manufacturing units are registered factories under the Factories Act. (Otherwise, of course, they will be covered under the Shops and Commercial Establishments Act, binding the employer to keep the workplace closed on these days).

However, being legally correct is one thing, and keeping employees' cultural aspirations in mind is another matter. In a multicultural, multi-religious society, one has to maintain a balance. In any case, most factories declare certain days as festival holidays/paid holidays either in consultation with the employees or their union, as the case may be!

The Negotiable Instruments Act has no application to factories.

Trust the matter is clear at the conceptual level also!

Regards,
Samvedan

October 2, 2013

Though the Factory Act does not have such a restriction, the Industrial Employment Standing Orders Act has provisions for holidays on those days. So, legally, you are not allowed to work on those days except by paying overtime for all the workers who attend. Those who do not work on that day will get their full payment.

Shops and Commercial Establishments Act

It is only the Shops and Commercial Establishments Act that specifies 26/1, 1/5, 15/8, and 2/10 as paid holidays on which the establishment shall remain CLOSED. However, the act also permits work on these days if employees are paid overtime and also a compensatory paid holiday! The Factories Act has NO such provisions and therefore technically, you can work your manufacturing units on these days—the presumption being that all such manufacturing units are registered factories under the Factories Act. (Else, of course, they will be covered under the Shops Act—binding the employer to keep the workplace closed on these days).

However, being legally correct is one thing, and keeping employees' cultural aspirations in mind is another matter. In a multicultural, multi-religious society, one has to keep the balance. In any case, most factories declare certain days as festival holidays/paid holidays either in consultation with the employees or their union as the case may be! The Negotiable Instruments Act has no application to factories. Trust the matter is clear at the conceptual level also!

Regards,
Samvedan
October 2, 2013

I am not questioning your addition, but could you please quote the provisions from the Industrial Employment (Standing Orders) Act 1946? I do not remember seeing any such provisions in "model standing orders" or the Maharashtra Rules! Are you by any chance referring to "certified" standing orders or to the "Central rules"? This is where a clarification is needed, please!

Regards,
Samvedan

Dear Saswata & Ashish,

Can you please provide the exact clause under the Model Standing Order (Central) or under Maharashtra Rules, as there is no mention of any specified holidays in the respective rules?

Under the Model Standing Order of Central rules, under Schedule I, Clause 5, it states: "Notices specifying (a) days to be observed by the establishment as holidays and (b) pay-days shall be posted on the notice board." There is no clause under model standing orders under Maharashtra Rules.

Further, if our list of holidays does not include these 4 days, how and under what rules and section can the authority question us? Request your guidance to find the appropriate clause.

Regards,
Preetam Deshpande

Dear Preetam,

Learned followers have rightly informed you that there are four National Holidays: January 26, May 1, August 15, and October 2. There is a provision for eight Paid Holidays. The remaining four are given as per the state. Most commonly, they are given for Holi, Dussehra, and Diwali (one each), and one depending upon the state. In Maharashtra, it is on Ganesh Chaturthi, and in some states, for Eid or Christmas, or two for Dussehra (West Bengal/Bihar/Jharkhand). You can fix up the holidays accordingly and circulate them in the first week of January every year.

Best wishes,

AK Jain
HR Personnel
NCL, CIL

Sorry for the late response. I was not in the office for a few days. This is what I got from the Central Model Standing Orders:

Festival Holidays and Leave

(a) There shall be seven paid festival holidays or as laid down in an agreement or an award in force. Out of these seven days, the Republic Day, Independence Day, and Mahatma Gandhi's Birthday shall be allowed without option, and the rest of the days shall be fixed by agreement or local custom. Whenever a workman has to work on any of these holidays, he shall, at his option, be entitled to either thrice the wages for the day or twice the wages for the day on which he works and, in addition, avail himself of a substituted holiday with wages on any other day or as laid down in an agreement or an award in force.

Additional Points on Leave and Holidays

Some additional points that would apply:

9. Leave:
- (1) Holidays with pay will be allowed as provided for in [Chapter VIII of the Factories Act, 1948], and other holidays in accordance with law, contract, custom, and usage.

Publication of Holidays and Pay-Days

5. Notices specifying (a) the days observed by the establishment as holidays, and (b) pay-days shall be pasted on the said notice-boards.

So, in the case of the original post, custom and usage specify that these days must be given as holidays. As I mentioned earlier, when you provide the list of holidays at the start of the year, the factory inspector will insist that these days be declared as holidays. If you do not agree, he will issue a notice asking the factory to include these holidays.