Navigating Construction and Safety Regulations for Factory Colony Work: Seeking Guidance on Legal Norms and Compensation Policies

Construction of Additional Family Quarters

Respected seniors,

This is Ramu, working as DM-HR in the manufacturing sector. My queries are:

1. We have company quarters for employees' accommodation near the factory. Now we are planning to construct additional family quarters in the same colony through a contract agency. What are the statutory norms applicable for construction work? The colony area is not within the scope of the factory as per approved drawings. The work order will be issued from the company to the contract agency for construction work. Is a Contract Labour License applicable for the contract agency? What are the statutory norms applicable? Kindly advise me.

Accident Reporting and Compensation in Colony Area

2. Normally, colony maintenance works are carried out by factory workmen like electricians, plumbers, carpenters, and other housekeeping staff. If any accidents happen in the colony area while carrying out the maintenance works, can we mention in the accident report that the exact place of the accident is the "colony area" since it is not within the factory premises? Can we get any compensation benefits from the Employees' Compensation Policy for such cases? Kindly advise me.

Regards, Ramu

1. Act will be applicable like BOCW, Contract Labour, accidental insurance such as the Employee Insurance Act (formerly WC), etc.

2. Persons involved in colony maintenance can mention their exact working place as the colony. They will certainly receive compensation. For them, gemba (working place) is the colony.

1. The contractor has to comply with labor laws like BOCW Act, BOCW Cess Act, PF, ESI (if ESI notified Area, or else EC Act), CLRA, etc.

2. An accident in the colony is not reportable under the Factories Act, so accident reporting is not needed.

Dear Ramu, Your second query answers your first one partly to the extent that the area of the company quarters is not within the area earmarked for the existing factory, including the precincts and premises thereof. However, since your company is a body corporate or a firm as per its constitution and the construction of quarters is a "Building or Other Construction Work" as defined under Section 2(1)(d) of the BOCW Act, 1996, it becomes an "establishment" under Section 2(1)(j) of the Act. Therefore, you have to follow the provisions of the Act.

In addition to this, as the company is entrusting the entire construction work of its quarters to a contractor, it is covered under the provisions of the CLRA Act, 1970, and the other allied laws applicable to the contractor's establishment as mentioned by our fellow members. Since the particular group of factory workers is also engaged in the maintenance and conservancy activities of the quarters, their work area extends beyond the factory boundary. Therefore, ensure special coverage under the EC Insurance Policy for such activities.

Kindly let me know if you have any further questions or need additional clarification.

Best regards, [Your Name]

Contractor Registration and Licensing Requirements

Contractors will need registration under the BOCW Act and will also need a license under the Contract Labour Act as they will engage more than 20 workers for sure. The BOCW Act has certain provisions that are required to be complied with. The first and foremost is the registration of all the site workers. Please study the act or engage someone who knows the compliance requirements under the Act.

Accident Liability and Compensation

Should such an accident happen, it will be "arising out of and during the course of employment." As such, the employer will be liable to pay compensation if the employees are not covered under ESI. Please maintain in-out time at both the colony and factory for such employees. While leaving the factory, such employees should be issued an authorized gate pass. Yes, such employees will be eligible to receive compensation under the insurance policy.

Respected seniors,

Can we insist that the contractor obtains a labor license under the CLRA Act for the construction work in the colony quarters since it is not part of the premises of the factory?

Ramu

Dear Ramu,

The CLRA Act applies to establishments other than factories as well. Therefore, the contractor working in the Township also needs a labor license.

Thank you.

Dear Ramu, the residential colony is not a part of the factory; hence, the residential area/township does not fall under the Factory Act. Now, your management wants to construct some residential houses in the existing colony area. The new work, i.e., the construction of company quarters, will fall under the B&OCW & B&OCW Cess Act. If the company is entrusting the construction work to a contractor/contractors, it is covered under the provisions of the CLRA Act, 1970, and other laws in force will be applicable to the contractor's establishment. Maintenance work is different from construction. If the area is not under the coverage of ESI, then a WC Policy/GPA Policy for workmen should be taken for those engaged in construction.