Amendment Bill proposes to revise factory definition

Aug 14 2014, 01:22 IST
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SummaryMore than half the factories across India may be exempt from the restrictive provisions that apply to them under the current legislative framework, with the Factories Amendment Bill 2014 proposing to revise the definition of a factory by effectively doubling the threshold of the number of workers employed in such a unit.

More than half the factories across India may be exempt from the restrictive provisions that apply to them under the current legislative framework, with the Factories Amendment Bill 2014 proposing to revise the definition of a factory by effectively doubling the threshold of the number of workers employed in such a unit.

The move is expected to ease the labour law burden on the majority of factories by freeing them from complying with provisions of the Act that relate to safety, working conditions and welfare of employees as well as filing compliance reports.

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The original Act defines a factory based on the number of workers. Units where manufacturing is carried on throu-gh power must at present employ 10 workers or more in a year to be called a factory whereas units that do not use power must employ 20 workers in the last 12 months to be defined as a factory. Under the amendment, this criteria is sought to be doubled to 20 wor-kers and 40 workers, respectively, and state governments empowered to prescribe the number of workers up to this limit that a unit must employ to be defined as a factory.

Data from Annual Survey of Industries reveals that about 1 lakh or 58% of the 1,75,710 factories reported to be operating in the country in 2011-12 employed up to 30 workers. While 63,568 units employed between 0-14 workers, another 18,763 factories employed between 15 to 19 workers and 20,541 units had 20 to 29 workers on payrolls. This is backed by the labour ministry's own data based on returns submitted by factories under Factories Act, 1948.

Trade unions and experts have opposed the amendment, arguing that it could lead to greater violations by factories. “There has to be more discussion with the labour ministry. In effect, these factories will be out of the purview of the government and working conditions will not be regulated,” said AK Padmanabhan, president CITU. Michael Dias, secretary, Employers' Association of Delhi and a member of the Council of Indian Employers, concurred with him.

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