Navigating Statutory Compliance for New Plant Construction: What Do You Need to Know?

Statutory Compliances for New Plant Setup During Construction

Will you please guide me on the statutory compliances required for setting up a new plant during construction?

1. Is a Factory License required during the construction of the plant?
2. Should PF & ESIC registration of the company be applied for before the completion of the plant? If not, when should it be applied?
3. Initially, contract employees of the civil contractor are working on the site, and they are covered under PF, ESIC, etc. These employees supervise the subcontractors related to masons, civil workers, electricians, carpenters, etc. The employees working under these subcontractors are skilled but not formally educated. Their attendance is irregular, and as they change often, these subcontractors pay them on a daily basis and do not maintain other statutory records. Now, the question arises: Is it compulsory under the law to cover these subcontractor employees under PF, ESIC, etc.?
4. Which Acts will be applicable during the construction of the plant?

I look forward to your suggestions on the above, which will not only help me but also be useful to others on CiteHR in facing similar situations.

Thanks,
Arun

I take this opportunity to reply to your queries point by point:

Factory License Requirement During Construction

Factory License is not required during the construction of the plant. According to Rule 5 of MFR 1963, the occupier/manager of the factory, coming within the scope of the FA after its commencement, shall submit an application for registration of the factory accompanied by an application for the grant of a license.

PF & ESIC Registration Timing

PF & ESI registrations are not granted to any particular place or site but are granted to the entity of the company. When you have more than 20 employees overall, including site contract laborers, the PF & ESI Acts are applicable to your company, and you are liable to register your company under these Acts and comply accordingly.

Coverage of Subcontractor Employees Under PF & ESIC

PF is mandatory when you employ any person, even for a single day, directly or indirectly, through contract, subcontract, or sub-subcontract. Please read the judgment of the Mumbai High Court Nagpur Bench of Builders Association of India. However, you can take benefit by excluding employees within the parameters of the law. You can take shelter of a circular by ESIC HQ bearing number Construction 4/99 dated 14.06.1999 to exclude the construction workers who are migrants and casuals from the ESI Scheme.

Applicable Acts During Construction

CLRA, POW, MW, HRA, ER, POB, POG, PF, ESI, MLW, PT, EC, ID, IE(SO), and many more. But the prominent enactment applicable to the construction site is the BOCW Act.

Regards.

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Regards