FACTORY

“Factory” ;{Section 2(m)}

Factory means any premises including the precincts thereof-
(i) whereon ten or more workers are working, or were working on any day of the preceding twelve
months, and in any part of which a manufacturing process is being carried on with the aid of power, or
is ordinarily so carried on, or
(ii) Whereon twenty or more workers are working, or were working on any day of the preceding
twelve months, and in any part of which a manufacturing process is being carried on without the aid
of power, or is ordinarily so carried on,-
The definition of factory specifically excludes from its purview a mine subject to the operation of the
Mines Act, 1952 or a mobile unit belonging to the armed forces of the Union, a railway running shed
or a hotel, restaurant or eating place.
Explanation I : For computing the number of workers for the purposes of this clause all the workers
in different groups and relays in a day shall be taken into account;
Explanation II: For the purposes of this clause, the mere fact that an Electronic Data Processing Unit
or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a
factory if no manufacturing process is being carried on in such premises or part thereof;
Meaning of words “premises and precincts”
The word “premises” is a generic term meaning open land or land with building or building alone.
The term ‘precincts’ is usually understood as a space enclosed by walls. Expression ‘premises’
including precincts does not necessarily mean that the premises must always have precincts. It merely
shows that there may be some premises with precincts and some premises without precincts. The
word ‘including is not a term’ restricting the meaning of the word ‘premises’, but is a term which
enlarges its scope.
Manufacturing process is being carried on or ordinarily so carried on: The word ordinarily came
up for interpretation in the case of Employers Association of Northern India v.Secretary for Labour
U.P. Govt. The question was whether a sugar factory ceases to be a factory when no manufacturing
process is carried on during the off-season. It was observed that the word ‘ordinarily’ used in the
definition of factory cannot be interpreted in the sense in which it is used in common parlance. It must
be interpreted with reference to the intention and purposes of the Act. Therefore, seasonal factories or
factories carrying on intermittent manufacturing process, do not cease to be factories within the
meaning of the Act.
Ten or twenty workers
The third essential content of ‘factory’ is that ten or more workers are employed in the premises using
power and twenty or more workers are employed in the premises not using power.
Where seven workers were employed in a premises where the process of converting paddy into rice
by mechanical power was carried on and in the same premises, three persons were temporarily
employed for repairs of part of the machinery which had gone out of order but the manufacturing was
going on, it was held that since three temporary persons were workers, consequently there were ten
workers working in the ‘premises’ and the premises is a factory (AIR 1959, AII. 794).
According to explanation to Section 2(m), all the workers in different relays in a day shall be taken
into account while computing the number of workers