Can We List More Workers on Our Labor License Than Our Factory Capacity Allows?

Hi, I am working in a chemical company as an Executive in HR & Admin. We have a total staff of around 150 employees, including workers. Our factory license allows for a capacity of 250 employees.

In this scenario, can we issue Form V to contractors for a workforce exceeding the factory capacity, for example, 300 workers, even if we consistently maintain the workforce below the 250 limit? Can we list 300 as the workforce strength on the company's labor license, even if we never exceed the 250 limit on any given day?

The factory license is for 250 workers. How can you engage 300 workers through contractors when the total number of employees would become 450, including the on-roll workers?

Factory License Parameters

The factory license is issued with reference to two parameters: the number of workers and the power installed, right? When the number of workers given in the license is 250, it is expected that the factory will be using power required for working by 250 workers. When the number of workers increases, the power will also increase to a certain extent. It cannot be argued that your contract workers will not utilize power or that capacity utilization would not increase. Certainly, if the additional manpower is put in another unit or a unit owned by the contractor himself, there is no issue. Otherwise, if the additional manpower from the contractor is put in the same factory where the number of employees would exceed 250, then it will be a problem.

In addition, please remember that workmen on weekly off and on leave are also counted by the labor inspector in the number of workers employed.

Dear Madhu T.K.,

Please clarify your line. If there is another factory named XYZ Company, and it is your next unit, with your last unit named ABC Company having a license for 250, and XYZ having a license for 200, while XYZ has employed 100 employees, can you consider employing the 100 workers from ABC Company at the XYZ Company premises?

You mean there are two factories, XYZ and ABC, and both have a license to employ 200 and 250 workers, respectively. If ABC is employing workers in XYZ and getting things done from the premises of XYZ, there is no issue with regard to the Factories Act because XYZ has a license to engage 200 workers. As long as health, safety, and welfare measures are complied with in XYZ, they can do the work of any other company. There is no need to investigate whether these workers are working for another company, ABC, or not. The Factory inspector is concerned only with the safety, welfare, and health of workers in the respective company. For whom they work is immaterial.