Unit 5 — Exam Guide

1. Introduction

The Factories Act, 1948 is the primary legislation governing the health, safety, and welfare of workers in factories. Chapters III (Health), IV (Safety), and V (Welfare) contain detailed provisions to protect factory workers.

2. Health Provisions — Sections 11 to 20

S.11 — Cleanliness

• Every factory must be kept clean and free from effluvia
• Walls, floors, and staircases must be cleaned regularly
• Painting or varnishing at least once every 5 years

S.12 — Disposal of Wastes and Effluents

• Effective arrangements for waste disposal
• No accumulation of waste in the factory

S.13 — Ventilation and Temperature

• Adequate ventilation by circulation of fresh air
• Reasonable temperature for comfort of workers

S.14 — Dust and Fume

• Effective measures to prevent inhalation of dust and fumes
• Exhaust appliances near the point of origin

S.15 — Artificial Humidification

• State government may prescribe standards
• Water used must be purified

S.16 — Overcrowding

• Minimum 14.2 cubic metres of space per worker
• State government may exempt for special reasons

S.17 — Lighting

• Sufficient and suitable natural or artificial lighting
• Prevention of glare and shadow formation

S.18 — Drinking Water

• Sufficient supply of wholesome drinking water
• Cooled drinking water if 250+ workers
• Must be marked ‘Drinking Water’

S.19 — Latrines and Urinals

• Sufficient number, separate for males and females
• Adequately lighted, ventilated, and maintained

S.20 — Spittoons

• Sufficient number of spittoons
• Penalty for spitting elsewhere

3. Safety Provisions — Sections 21 to 41

S.21 — Fencing of Machinery

• Every moving part, flywheel, and dangerous part must be securely fenced
• Fencing must be constantly maintained

S.22 — Work on or Near Machinery in Motion

• Only trained adult male workers can work on moving machinery
• Must wear tight-fitting clothing

S.23 — Employment of Young Persons on Dangerous Machines

• Young persons cannot work on dangerous machines unless trained and supervised

S.24-26 — Additional Safety

• S.24: Power to cut off power supply in emergency
• S.25: Self-acting machines — minimum clearance space
• S.26: Casing of new machinery

S.32-33 — Floors, Stairs, Pits

• S.32: Floors, stairs, and passages must be of sound construction
• S.33: Pits, sumps, and openings must be securely covered or fenced

S.38 — Fire Safety

• Every factory must have adequate fire exits
• Fire extinguishing equipment must be maintained
• Workers must be trained in fire drill

S.40B — Safety Officers

• Factories with 1,000 or more workers must appoint Safety Officers
• Duties include monitoring compliance with safety provisions

4. Welfare Provisions — Sections 42 to 50

S.42 — Washing Facilities

• Adequate and suitable washing facilities
• Separate for male and female workers

S.43 — Facilities for Storing and Drying Clothing

• Suitable places for keeping and drying clothes not worn during working hours

S.44 — Facilities for Sitting

• Suitable seating arrangements for workers obliged to work standing

S.45 — First Aid Appliances

• First aid box with prescribed contents — 1 per 150 workers
• Ambulance room if 500+ workers
• Trained first-aid person during all working hours

S.46 — Canteens

• Mandatory where 250+ workers are employed
• Managed by a canteen committee

S.47 — Shelters, Rest Rooms, and Lunch Rooms

• Mandatory where 150+ workers are employed
• Adequate in size, ventilated, and clean

S.48 — Creches

• Mandatory where 30+ women workers are employed
• For children below 6 years of age
• Must have adequate accommodation, trained attendant, and free milk/meals

S.49 — Welfare Officers

• Factories with 500+ workers must appoint Welfare Officers
• Duties prescribed by the State Government

1. Introduction

The Payment of Wages Act, 1936 regulates the payment of wages to certain classes of employed persons and prevents unauthorised deductions. Section 7 deals with permissible deductions from wages.

2. General Rule — Section 7(1)

Section 7(1) provides that no deduction shall be made from wages except those authorised under the Act. Any deduction not authorised is illegal.

3. Authorised Deductions — Section 7(2)

The following deductions are permitted:

(a) Fines

• For acts and omissions specified in a notice displayed in the factory
• Total fines in any wage period shall not exceed 3% of wages
• No fine on a person below 15 years of age
• Fine must be imposed within specified time

(b) Deduction for Absence

• For absence from duty
• Deduction proportionate to the period of absence
• If 10 or more persons absent together, deduction can be for 8 days instead of actual absence

(c) Deduction for Damage or Loss

• For damage to or loss of goods entrusted to the employed person
• Show cause notice must be given before deduction
• Worker must be given opportunity to explain

(d) Other Authorised Deductions

1. Deduction for house accommodation supplied by the employer
2. Deduction for amenities and services supplied by the employer
3. Recovery of advances or overpayment of wages
4. Recovery of loans from any fund maintained by the employer
5. Deduction of income tax
6. Deduction by order of court
7. Deduction for provident fund contributions
8. Deduction for ESI contributions
9. Deduction for cooperative society subscriptions
10. Deduction for insurance premium
11. Deduction for trade union membership subscription (with written authorisation)

4. Maximum Limit

• Total deductions in any wage period shall not exceed 50% of wages
• If cooperative society deductions are included, maximum is 75% of wages
• These limits protect workers from excessive deductions

5. Penalties — Section 20

• Making unauthorised deductions: fine up to Rs. 7,500 (first offence)
• Repeat offence: imprisonment up to 6 months or fine up to Rs. 22,500 or both

1. Concept of Minimum Wages

A Minimum Wage is the lowest amount that an employer is required to pay a worker for the work performed during a given period. It acts as a floor level below which no employer can pay. Paying below minimum wage is a criminal offence.

2. Components of Minimum Wages — Section 4

Section 4 provides that minimum wages may be fixed as:

• Basic rate + cost of living allowance (DA)
• Basic rate + value of concessions in kind (housing, food, etc.)
• All-inclusive rate covering basic + DA + concessions

3. Method 1 — Committee Method (Section 5(1)(a))

Used for first-time fixation of minimum wages:

1. Government appoints committees and sub-committees to investigate wages
2. Committees have representatives of employers, employees, and independent persons
3. Committees investigate conditions and recommend minimum rates
4. Government considers the recommendations
5. Government fixes the minimum rate by notification

4. Method 2 — Notification Method (Section 5(1)(b))

Used for revision of minimum wages:

1. Government publishes proposals in the Official Gazette
2. Allows 2 months for representations from interested persons
3. Government considers all representations
4. Government fixes or revises the minimum wage by notification

5. Review and Revision — Section 3(1)(b)

• Minimum wages must be reviewed at intervals not exceeding 5 years
• Government may revise rates at any time using either method
• Advisory Board assists in coordination

6. Advisory Board — Section 7

• Constituted by the appropriate government
• Equal number of representatives of employers and employees
• Also includes independent members
• Advises the government on fixation and revision of minimum wages

7. Working Hours — Section 13

• Maximum 9 hours per day
• Adequate rest intervals
• 1 day rest per week
• Overtime at double the ordinary rate

8. Penalty — Section 22

• Paying below minimum wage: imprisonment up to 6 months or fine up to Rs. 500 or both
• Repeat offence: imprisonment up to 1 year

9. Case Law

U. Unichoyi v. State of Kerala — The Supreme Court upheld the power of the State to fix minimum wages even if the industry cannot afford it. The employer who cannot pay minimum wage has no right to engage workers.

1. Definition — Section 2(m)

Section 2(m) defines Factory as any premises (including the precincts thereof):

• Where 10 or more workers are working with the aid of power, or
• Where 20 or more workers are working without the aid of power,
• and in any part of which a manufacturing process is being carried on.

2. Manufacturing Process — Section 2(k)

Section 2(k) defines Manufacturing Process to include 7 categories:

1. Making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating any article
2. Adapting any article or substance for use, sale, transport, delivery, or disposal
3. Pumping oil, water, sewage, or any other substance
4. Generating, transforming, or transmitting power
5. Composing types for printing, printing by letterpress, lithography, photogravure, or other similar process, or bookbinding
6. Constructing, reconstructing, repairing, refitting, finishing, or breaking up of ships or vessels
7. Preserving or storing any article in cold storage

3. Key Elements

(a) Premises

• Includes land, building, and precincts (surrounding area)
• The whole area within the factory boundary is covered

(b) Power

• Electrical energy or mechanical energy
• If power is used: threshold is 10 workers
• If no power: threshold is 20 workers

(c) Worker — Section 2(l)

• Person employed directly or through agency
• Must be employed in the manufacturing process
• Includes any part of the manufacturing process

4. Related Definitions

• Occupier (S.2(n)) — Person who has ultimate control over the affairs of the factory
• Manager (S.2(l)) — Person responsible for supervision and control

5. Seasonal Factory

• A factory that works only for a part of the year (e.g., sugar mills)
• Special provisions for seasonal factories regarding working hours, leave, etc.

6. Hazardous Process — Section 2(cb)

• Any process that may cause harm to workers’ health through handling of hazardous substances
• Introduced after the Bhopal Gas Tragedy (1984)
• Special safety provisions for factories using hazardous processes
• Site Appraisal Committee, workers’ participation in safety management

7. Case Laws

Ardeshir H. Bhiwandiwala v. State of Bombay — A beedi-rolling establishment where 20+ workers were employed without power was held to be a ‘factory’ under the Act.

Nagpur Electric Light v. Regional Director — The definition of manufacturing process is wide enough to include generation of electricity.