FACTORIES ACT, 1948

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OBJECTIVES OF FACTORIES ACT, 1948
 An Act to consolidate and amend the law regulating labour in factories.
 The Act also protects workers from various industrial and occupational hazards.
 Heath: According to the Act, all factories must be kept clean, and all essential safeguards must be taken to
safeguard the health of workers. The factory must have a sufficient drainage system, adequate lighting, ventilation,
temperature, etc. There must be clean water supplies. Separate restrooms and urinals must be built in convenient
locations for males and females. These must be freely accessible to employees and kept clean. (sections 11-20,
Chapter III)
 Safety: The Act requires that machines be properly fenced; that no young adults work on any dangerous machines
in enclosed places, and also that appropriate manholes be provided so that employees may escape in an
emergency. (sections 21-41, Chapter IV)
 Welfare: The Act specifies that appropriate and suitable washing facilities for workers must be provided and
maintained in every factory. There must be storage and drying facilities, as well as sitting areas, first-aid
equipment, shelters, restrooms and lunch rooms. (sections 42-50, Chapter V)
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IMPORTANT DEFINITIONS

 Section 2(k) “manufacturing process” means any process for—

(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing,
or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal;
or
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book
binding; or
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or
(vi) preserving or storing any article in cold storage;]

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IMPORTANT DEFINITIONS

 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.

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STATE OF BOMBAY V ARDESHIR HORMOSJI BHIWANDIWALA
(1956) II LLJ 26 BOM
 Issue: Whether the Salt Works come within the definition of the word “factory” under S. 2(m) the Act.
 The answer to this question depends on the meaning of the word ‘premises’ in the definition of the word ‘factory’
and on the determination whether what is done at this Salt Works in connection with the conversion of sea water
into crystals of salt comes within the definition of the expression manufacturing process' in S. 2(k) of the Act.
 The Court observed:
 “The word ‘premises’ is a generic term meaning open land or land with buildings or buildings alone. Expression
‘premises including precincts’ does not necessarily mean that the premises must always have precincts. Even
buildings need not have any precincts. The word including is not a term restricting the meaning of the word
‘premises’ but is a term which enlarges its scope. The use of the expression therefore does not indicate that the
word ‘premises’ must be restricted to mean building and be not taken to cover open land as well. An occupier is to
comply with such provisions of the Act which apply to the factory he is working. Hence such salt works would
come within the meaning of the word 'premises' used in the definition in S. 2(m)”.

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CONTINUED...
 The Court further evaluated the factual situation of the salt works in order to find out Whether the salt works
would fall within the ambit of the definition of manufacturing process provided in S. 2(k) of the Act so that the
Court can reach the conclusion that the salt works may be covered within the scope of S. 2(m) of the Act.
 Accordingly, the Court observed that the sea water in the sea never becomes salt merely on account of the
play of the sun's rays on it. Labourers are employed for,
i. admitting sea water to the reservoirs by working sluice sales, sometimes at night also, or the pump; it tilling
crystallizing beds; it watching the density of brine in the crystallizing beds; (in seeing that the density does not
exceed vertain limits and that salts other than sodium chloride (common salt) are not formed;
ii. scraping and collecting salt crystals;
iii. grading the salt crystals by sieving and
iv. putting salt into gunny bags.
 It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water. The
processes carried out in the Salt Works and described above, come within the definition of manufacturing process6
in S. 2(k) inasmuch as salt can be said to have been manufactured from sea water by the process of treatment and
adaptation of sea water into salt. In view of the above discussion, the Court held that Salt Works do come within
V.P. GOPALA RAO V. PUBLIC PROSECUTOR, ANDHRA PRADESH,
AIR 1970 SC 66

 Whether the company's premises at Eluru constitutes a factory Under S. 2(m). The point in issue is: Whether any
manufacturing process was being carried on therein under S. 2(k).
 In a company's premises at E, sun-cured tobacco leaves bought from the growers were subjected to the processes
of moistening, stripping and packing. The stalks were stripped from the leaves. The Thukku (wholly spoilt) and
Pagu (partly spoilt) leaves were separated.
 The leaves were tied up in bundles and stored in the premises. From time to time, they were packed in gunny bags
and exported to the company's factory at B where they were used for manufacturing cigarettes. More than 20
persons were working on the premises regularly every day under the supervision of the management.
 (The manufacturing processes as defined in S. 2(k)(i) were carried on in the premises.
 The moistening was an adaptation of the tobacco leaves. The stalks were stripped by breaking them up. The leaves
were packed by bundling them up and putting them into gunny bags.
 The breaking up, the adaptation and the packing of the tobacco leaves were done with a view to their use and
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transport. All these processes are manufacturing processes within S. 2(k)(i).
LAL MOHAMMAD V. INDIAN RAILWAY CONSTRUCTION CO. LTD.,
AIR 1999 SC 355- CONSTRUCTION OF RAILWAY LINES
 While railway lines are being constructed on a given site, no article or substance is being made or repaired,
maintained, finished, etc. Raw materials like railway sleepers, bolts and loose railway rails when bought by the
construction company from the open market and brought on site are articles visible to the eyes and are movable
articles. These articles are adapted for their use. Their use is for ultimately laying down a railway line. In that
process, sleepers, bolts and rails would get used up. If that happens, the definition of manufacturing process'
dealing with adaptations of these articles for use would squarely get attracted.
 It is true that the ultimate product of this exercise or process is the bringing into existence a railway track which is
embedded in the earth, which cannot be sold, transported, delivered or disposed of like a movable property.
However, as the definition is worded, it cannot be said of necessity that any end product which results after
adapting any raw-material, article or substance "with a view to its use" must necessarily result into a movable final
product or a commodity. For the definition of manufacturing process' under S. 2(k), end product may be goods or
otherwise. It is not necessary that the end product must be marketable. Even accepting that the final product,
namely construction of railway line embedded in earth is not the subject-matter of sale, transfer, delivery or
disposal, still the raw-materials which are adapted for their use with a view to constructing railway line which is
the final product could be said to have fallen within the sweep of the definition of the term manufacturing process8
as found in S. 2(k) of the Factories Act.
SECTION 21: FENCING OF MACHINERY
(1) In every factory the following, namely:—
(i) every moving part of a prime mover and every flywheel connected to a prime mover, whether the prime mover or
flywheel is in the engine house or not;
(ii) the headrace and tailrace of every water-wheel and water turbine:
(iii) any part of a stock-bar which projects beyond the head stock of a lathe; and
(iv) unless they are in such position or of such construction as to be safe to every person employed in the factory as
they would be if they were securely fenced, the following, namely:—
(a) every part of an electric generator, a motor or rotary converter;
(b) every part of transmission machinery; and
(c) every dangerous part of any other machinery;
shall be securely fenced by safeguards of substantial construction which shall be constantly maintained and kept in
position while the parts of machinery the are fencing are in motion or in use. 9
STATE OF GUJRAT V. JETHALAL CHELABHAI PATEL, AIR 1964 SC
779
 Background: While greasing the spur gear wheel of an oil mill, one of the hands of a workman got caught and
had to be amputated. It appeared that at the time of the accident the cover of the spur gear wheel was not there.
The respondent, who is the manager of the mill was prosecuted under s. 92 of the Factories Act for having failed
to comply with s. 21(1)(iv)(c) of the Act. The workman said that the cover had been removed by the respondent
for repairs, while the case of the respondent was that the workman had himself removed it. The trial Judge was
unable to accept either version and he acquitted the respondent observing that he could not be held liable if the
cover was removed by someone, without his consent or knowledge. On appeal, the High Court affirmed the
acquittal.
 Held: The mere fact that someone else had removed the safeguard without the knowledge, consent or connivance
of the occupier or manager does not provide a defence to him. When the statute says that it will be his duty to keep
a guard in position while the machine is working and when it appears that he has not done so, it will be for him to
establish that notwithstanding this he was not liable.
 Even where the occupier or manager could establish that somebody else had removed the fence, he has further to
prove that he exercised due diligence to see that the fence, which under the Act was his duty to see was kept in
position all along, had not been removed. 10
SECTION 46: CANTEENS

(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and
fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the
use of the workers.]
(2) Without prejudice to the generality of the foregoing power, such rules may provide for—
(a) the date by which such canteen shall be provided;
(b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen;
(c) the foodstuffs to be served therein and the charges which may be made therefor;
(d) the constitution of a managing committee for the canteen and representation of the workers in the management of
the canteen;
(dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of
foodstuffs and which shall be borne by the employer;
(e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules11
under clause (c).
PARIMAL CHANDRA RAHA V. LIFE INSURANCE CORPORATION
OF INDIA, AIR 1995 SC 1666
 Issues: (1) whether the appellants are or should be deemed to be the regular employees of the respondent-Corporation, and
if the answer is in the affirmative, (ii) what pay-scales and other service conditions should be made available to them.
 The facts on record show in unmistakable terms that canteen services have been provided to the employees of the
Corporation for a long time and it is the Corporation which has been, from time to time, taking steps to provide the said
services. The canteen committees, the co-operative society of the employees and the contractors have only been acting for
and on behalf of the Corporation as its agencies to provide the said services. The Corporation has been taking active
interest even in organizing the canteen committees.
 Further, it is the Corporation which has been appointing the contractors to run the canteens and entering into agreements
with them for the purpose. The terms of the contract further Show that they are in the nature of directions to the contractor
about the manner in which the canteen should be run and the canteen services should be rendered to the employees. Both
the appointment of the contractor and the tenure of the contract are as per the stipulations made by the Corporation in the
agreement. Even the prices of the items served, the place where they should be cooked, the hours during which and the
place where they should be served, are dictated by the Corporation. The Corporation has also reserved the right to modify
the terms of the contract unilaterally and the contractor has no say in the matter. Further, the record shows that almost all
the workers of the canteen like the appellants have been working in the canteen continuously for a long time whatever the
machines employed by the Corporation to supervise and control the working of the canteen. Although the supervising and
managing body of the canteen has changed hands from time to time, the workers have remained constant . This is apart 12

from the fact that the infrastructure for running the canteen, viz., the premises, furniture, electricity, water etc. is supplied
by the Corporation to the managing agency for running the canteen.
CONTINUED...
 Further, it cannot be disputed that the canteen service is essential for the efficient working of the employees and of
the offices of the Corporation. In fact, by controlling the hours during which the counter and floor service will be
made available to the employees by the canteen, the Corporation has also tried to avoid the waste of time which
would otherwise be the result if the employees have to go outside the offices in search of such services. The
service is available to all the employees in the premises of the office itself and continuously since the inception of
the Corporation. The employees of the Corporation have all along been making the complaints about the poor or
inadequate service rendered by the canteen to them, only to the Corporation and the Corporation has been taking
steps to remedy the defects in the canteen service.
 Further, whenever there was a temporary breakdown in the canteen service, on account of the agitation or of strike
by the canteen workers, it is the Corporation which has been taking active interest in getting the dispute resolved
and the canteen workers have also looked upon the Corporation as their real employer and joined it as a party to
the industrial dispute raised by them. In the circumstances, the Supreme Court is of the view that the canteen has
become a part of the establishment of the Corporation.
 The canteen committees, the co-operative society of the employees and the contractors engaged from time to time
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are in reality the agencies of the Corporation and are only a veil between the Corporation and the canteen workers.
Therefore, the Court held that the canteen workers are in fact the employees of the Corporation.
CONTINUED...
 The next question is as to what relief the appellants are entitled. As the appellants are deemed to have become the
employees of the Corporation, they should, therefore, be entitled to the minimum salary and the other benefits.
Taking into consideration the relevant facts and circumstances on record, the Court held that they should be
deemed to have become the regular employees of the Corporation from the date of the filing of the writ petition
before the High Court and should, therefore, be paid the arrears of salary and other monetary benefits, if any, from
the said date after adjusting the salary and monetary benefits that they may have received.
 The year of continuous service put in by them even prior to the aforesaid date as canteen workers should,
however, be taken into account for the purpose of calculating their retiral benefits.

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PRINCIPLES LAID DOWN:
 What emerges from the statute law, and the judicial decisions is as follows:

i. Where, as under the provision of the Factories Act, it is statutorily obligatory on the employer to provide and
maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the
workers employed in such canteen are the employees of the management.
ii. Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer
to provide a canteen, the canteen become a part of the establishment and the workers working in the canteen, the
employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to
provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the
establishment.
iii. The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by
or cast upon the employer either by an agreement or an award etc., it may be inferred from the circumstances,
and the provision of the canteen may be held to have be, come a part of the service conditions of the employee".
Whether the provision for canteen services has become a part of the of service conditions or not is it question of
fact to be determined on the facts and circumstances in each case. Where to provide canteen services has become15
a part of the service conditions of the employees, the canteen becomes a part of the establishment and the
workers in such canteen become the employees of the management.
CONTINUED...

iv. Whether a particular facility or service has become implicitly a part of the service conditions of the employees or
not, will depend, among others, on the nature of the service/facility, the contribution the service in question
makes to the efficiency of the employees and the establishment, whether the service is available as a matter of
right to all the employees in their capacity as employees and nothing more, the number of employees employed
in the establishment and the number of employees who avail of the service, the length of time for which the
service has been continuously available, the hours during which it is available, the nature and character of
management, the interest taken by the employer in providing, maintaining, supervising and controlling the
service, the contribution made by the management in the form of infrastructure and funds for making the service
available etc.

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