Are Warehouses Considered Factories? Seeking Clarity on Labor Practices and Safety Regulations

Hello All, I am trying to understand the labor practices in warehouses. As a part of IT, I need to know whether warehouses are considered under the Factories Act or not.

Factories Act Definition

The Factories Act states: "Factory" means any premises including the precincts thereof: a) 10 or more with the aid of power, b) 20 or more without the aid of power, carries out manufacturing activity. According to the Act, manufacturing activity has been defined as follows:

Definition of Manufacturing Process

"Manufacturing Process" means any process of making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking-up, demolishing, or otherwise treating, or adopting any article or substance with a view to its use, sale, transport, delivery, or disposal, or pumping oil, water, or sewage or generating, transforming, or transmitting power, or composing types for printing, printing by letterpress, lithograph, photogravure, or other similar process or bookbinding or constructing, reconstructing, repairing, refitting, finishing, or breaking up ships or vessels.

So my question is: "Does a warehouse come under the factory as per the definition above?" The purpose of a warehouse is to just store and dispatch the stored materials with a view of sale. I hope a warehouse doesn't come under the Factories Act. Please clarify my doubt.

If it's not covered, then is the HSW aspect, i.e., health, safety, and welfare, not a mandate then? Or does any other special act apply to it?

Also, please share some of the best practices followed in the industry for the contract laborers, please...

The answer to your question depends on various aspects. If the warehouse or BSR is located within the precincts of your factory, you cannot escape from the provisions of the FA. It is very much considered a part of the factory.

If the warehouse or BSR is located outside the precincts of your factory, it is not classified as a factory under the FA but rather as a shop as defined under the S&E Act. The provisions of the S&E Act, including those related to health, safety, and welfare, are applicable to such a warehouse or BSR.

However, if it is established that in such a warehouse or BSR (which is located outside the precincts of the factory) there is a manufacturing activity carried out with 10 or 20 persons, such as packing, wrapping, etc., then the provisions of the FA will be applicable.

The answer to your question depends on various aspects. If the warehouse or BSR is located within the precincts of your factory, you cannot escape from the provisions of the Factory Act (FA). It is very much considered a part of the factory.

On the other hand, if the warehouse or BSR is situated outside the precincts of your factory, it is not classified as a factory under the FA but rather as a shop as defined under the Shops and Establishments Act (S&E Act). The provisions of the S&E Act, including those related to health, safety, and welfare, are applicable to such warehouses or BSRs.

However, if it is established that in such a warehouse or BSR (located outside the factory premises), manufacturing activities are carried out with 10 to 20 persons, such as packing or wrapping, the provisions of the Factory Act will be applicable.

Please let me know if you need further clarification or information on this matter.

Thank you.

Agreed, warehouses not situated within the precinct of factory premises are not covered by the Factories Act; instead, they are covered by the S&E Act of that particular state. I have registrations for a few warehouses under the Shop Act of Haryana and UP.