Law Notes

BUSINESS LAWS AND ETHICS
Syllabus Structure:
The syllabus in this paper comprises the following topics and study weightage:
Module No. Module Description Weight

Section A: Commercial Laws 30%
1 Introduction to Law and Legal System in India 5%
2 Indian Contracts Act, 1872 10%
3 Sale of Goods Act, 1930 5%
4 Negotiable Instruments Act, 1881 5%
5 Indian Partnership Act, 1932
5%
6 Limited Liability Partnership Act, 2008
Section B: Industrial Laws 15%
7 Factories Act, 1948
8 Payment of Gratuity Act, 1972
10%
9 Employees Provident Fund and Miscellaneous Provisions Act, 1952
10 Employees State Insurance Act, 1948
11 The Code on Wages, 2019 5%
Section C: Corporate Laws 40%
12 Companies Act, 2013 40%
Section D: Business Ethics 15%
13 Business Ethics and Emotional Intelligence 15%
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THE FIRST SCHEDULE
[See section 23(4)]
PROVISIONS REGARDING MATTERS RELATING TO MUTUAL RIGHTS AND DUTIES OF PARTNERS AND
LIMITED LIABILITY PARTNERSHIP AND ITS PARTNERS APPLICABLE IN THE ABSENCE OF ANY AGREEMENT
ON SUCH MATTERS
MUTUAL RIGHTS & DUTIES

1. The mutual rights and duties of the partners and the mutual rights and duties of the limited liability
partnership and its partners shall be determined, subject to the terms of any limited liability partnership
agreement or in the absence of any such agreement on any matter, by the provisions in this Schedule.
First look at the LLP Agreement, if that is silent, come back to the First Schedule
2. All the partners of a limited liability partnership are entitled to share equally in the capital, profits
and losses of the limited liability partnership.
Equal Sharing in Capital Profits & Losses
3. The limited liability partnership shall indemnify each partner in respect of payments made and
personal liabilities incurred by him—
(a) in the ordinary and proper conduct of the business of the limited liability partnership; or
(b) in or about anything necessarily done for the preservation of the business or property of the
limited liability partnership.
LLP shall pay to Partner for payments made on behalf of LLP and for any liabilities
incurred during business.
4. Every partner shall indemnify the limited liability partnership for any loss caused to it by his fraud
in the conduct of the business of the limited liability partnership.
Partner shall compensate to LLP for any loss committed due to fraud.
5. Every partner may take part in the management of the limited liability partnership.
Every partner has management rights.
6. No partner shall be entitled to remuneration for acting in the business or management of the limited
liability partnership.
No remuneration to any partner for LLP work.
7. No person may be introduced as a partner without the consent of all the existing partners.
Admission of new partner needs 100% consent
8. Any matter or issue relating to the limited liability partnership shall be decided by a resolution
passed by a majority in number of the partners, and for this purpose, each partner shall have one vote.
However, no change may be made in the nature of business of the limited liability partnership without the
consent of all the partners.
Normal Decisions: Majority Vote
Change in Business: 100% Vote
9. Every limited liability partnership shall ensure that decisions taken by it are recorded in the minutes
within thirty days of taking such decisions and are kept and maintained at the registered office of the
Minutes to created in 30 days for all meetings and decisions and to be maintained at Registered
Office.
10. Each partner shall render true accounts and full information of all things affecting the limited
liability partnership to any partner or his legal representatives.
Each partner to account for all money in and out.
11. If a partner, without the consent of the limited liability partnership, carries on any business
of the same nature as and competing with the limited liability partnership, he must account for and pay
over to the limited liability partnership all profits made by him in that business.
Personal profits from competing business are to be handed over to LLP
12. Every partner shall account to the limited liability partnership for any benefit derived by him
without the consent of the limited liability partnership from any transaction concerning the limited
liability partnership, or from any use by him of the property, name or any business connection of the
Personal profits by using LLP name and resources are to be handed over to LLP
13.No majority of the partners can expel any partner unless a power to do so has been conferred by
express agreement between the partners.
Majority can not expel any partner without delegated power by all partners.
14.All disputes between the partners arising out of the limited liability partnership agreement which
cannot be resolved in terms of such agreement shall be referred for arbitration as per the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996).
Disputes to be settled by Arbitration
THE SECOND SCHEDULE
(See section 55)
CONVERSION FROM FIRM INTO LIMITED LIABILITY
PARTNERSHIP
1. Interpretation.—In this Schedule, unless the context otherwise requires,—

(a) "firm" means a firm as defined in section 4 of the Indian Partnership Act, 1932 (9 of 1932);
(b) "convert", in relation to a firm converting into a limited liability partnership, means a transfer
of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the
firm to the limited liability partnership in accordance with this Schedule.
Conversion = Transfer of property, assets, interests, rights, privileges, liabilities, obligations
and the undertaking
2. Conversion from firm into limited liability partnership.—(1) A firm may convert into a limited
liability partnership by complying with the requirements as to the conversion set out in this Schedule.
(2) Upon such conversion, the partners of the firm shall be bound by the provisions of this Schedule
that are applicable to them.
Conversion is a voluntary activity
3. Eligibility for conversion.—A firm may apply to convert into a limited liability partnership in
accordance with this Schedule if and only if the partners of the limited liability partnership into which the
firm is to be converted, comprise, all the partners of the firm and no one else.
Consent of 100% partners needed for conversion
Partners of LLP should be from Partners of Firm Only, No new person.
4. Statements to be filed.—A firm may apply to convert into a limited liability partnership by filing
with the Registrar—
(a) a statement by all of its partners in such form and manner and accompanied by such fee as the
Central Government may prescribe, containing the following particulars, namely:—
(i) the name and registration number, if applicable, of the firm; and
(ii) the date on which the firm was registered under the Indian Partnership Act, 1932 (9 of
1932) or under any other law, if applicable, and
(b) incorporation document and statement referred to in section 11.
Required Documents:
Statement by all partners + Old Registration Certificate + Incorporation Documents
5. Registration of conversion.—On receiving the documents referred to in paragraph 4, the Registrar
shall subject to the provisions of this Act, register the documents and issue a certificate of registration in
such form as the Registrar may determine stating that the limited liability partnership is, on and from the
date specified in the certificate, registered under this Act:
Provided that the limited liability partnership shall, within fifteen days of the date of registration,
inform, the concerned Registrar of Firms with which it was registered under the provisions of the Indian
Partnership Act, 1932 (9 of 1932) about the conversion and of the particulars of the limited liability
partnership in such form and manner as the Central Government may prescribe.
Apply to RoC + RoC Approval + LLP to inform Previous registrar in 15 days from COI
6. Registrar may refuse to register.—(1) Nothing in this Schedule shall be construed as to require
the Registrar to register any limited liability partnership if he is not satisfied with the particulars or other
information furnished under the provisions of this Act:
Provided that an appeal may be made before the Tribunal in case of refusal of registration by the
Registrar.
1
(2) The Registrar may, in any particular case, require the documents referred to in paragraph 4 to be
verified in such manner, as he considers fit.
RoC may refuse conversion + Appeal to NCLT possible
7. Effect of registration.—On and from the date of registration specified in the certificate of
registration issued under paragraph 5,—
(a) there shall be a limited liability partnership by the name specified in the certificate of
registration registered under this Act;
(b) all tangible (movable and immovable) property as well as intangible property vested in the
firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of
the undertaking of the firm shall be transferred to and shall vest in the limited liability partnership
without further assurance, act or deed; and
(c) the firm shall be deemed to be dissolved and if earlier registered under the Indian Partnership
Act, 1932 (9 of 1932) removed from the records maintained under that Act.
From the date of COI, LLP becomes a body corporate, will acquire Previous Partnership
and Old firm will be deemed to be dissolved.
8. Registration in relation to property.—If any property to which sub-paragraph (b) of paragraph 7
applies is registered with any authority, the limited liability partnership shall, as soon as practicable after
the date of registration, take all necessary steps as required by the relevant authority to notify the authority
of the conversion and of the particulars of the limited liability partnership in such medium and form as the
authority may specify.
Property registration to be transferred in LLP name asap
9. Pending proceedings.—All proceedings by or against the firm which are pending in any Court or
Tribunal or before any authority on the date of registration may be continued, completed and enforced by
or against the limited liability partnership.
Pending Proceedings at any court, tribunal, authority shall continue.
10. Continuance of conviction, ruling, order or judgment.—Any conviction, ruling, order or
judgment of any Court, Tribunal or other authority in favour of or against the firm may be enforced by or
against the limited liability partnership.
Any order for or against old firm will continue with LLP
11. Existing agreements.—Every agreement to which the firm was a party immediately before the
date of registration, whether or not of such nature that the rights and liabilities thereunder could be
assigned, shall have effect as from that date as if—
(a) the limited liability partnership were a party to such an agreement instead of the firm; and
(b) for any reference to the firm, there were substituted in respect of anything to be done on or
after the date of registration a reference to the limited liability partnership.
All existing agreements in the name of old firm will continue in the name of LLP
12. Existing contracts, etc.—All deeds, contracts, schemes, bonds, agreements, applications,
instruments and arrangements subsisting immediately before the date of registration relating to the firm or
to which the firm is a party, shall continue in force on and after that date as if they relate to the limited
liability partnership and shall be enforceable by or against the limited liability partnership as if the limited
liability partnership were named therein or were a party thereto instead of the firm.
All existing contracts in the name of old firm will continue in the name of LLP
13. Continuance of employment.—Every contract of employment to which paragraph 11 or
paragraph 12 applies shall continue to be in force on or after the date of registration as if the limited
liability partnership were the employer thereunder instead of the firm.
All existing EMPLOYMENT contracts in the name of old firm will continue in the name of LLP
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14. Existing appointment, authority or power.—(1) Every appointment of the firm in any role or
capacity which is in force immediately before the date of registration shall take effect and operate from
that date as if the limited liability partnership were appointed.
(2) Any authority or power conferred on the firm which is in force immediately before the date of
registration shall take effect and operate from that date as if it were conferred on the limited liability
partnership.
All existing appointment, authority and powers will continue in the name of LLP
15. Application of paragraphs 7 to 14.—The provisions of paragraphs 7 to 14 (both inclusive) shall
apply to any approval, permit or licence issued to the firm under any other Act which is in force
immediately before the date of registration of the limited liability partnership, subject to the provisions of
such other Act under which such approval, permit or licence has been issued.
Approval, Permit or Licence granted to Old firm shall continue in the name of LLP
16. Partner liable for liabilities and obligations of firm before conversion.—(1) Notwithstanding
anything in paragraphs 7 to 14 (both inclusive), every partner of a firm that has converted into a limited
liability partnership shall continue to be personally liable (jointly and severally with the limited liability
partnership) for the liabilities and obligations of the firm which were incurred prior to the conversion or
which arose from any contract entered into prior to the conversion.
(2) If any such partner discharges any liability or obligation referred to in sub-paragraph (1), he shall
be entitled (subject to any agreement with the limited liability partnership to the contrary) to be fully
indemnified by the limited liability partnership in respect of such liability or obligation.
Personal and mutual liability for everything done before conversion will continue.
17. Notice of conversion in correspondence.— (1) The limited liability partnership shall ensure that
for a period of twelve months commencing not later than fourteen days after the date of registration, every
official correspondence of the limited liability partnership bears the following:
(a) a statement that it was, as from the date of registration, converted from a firm into a limited
liability partnership; and
(b) the name and registration number, if applicable, of the firm from which it was converted.
(2) Any limited liability partnership which contravenes the provisions of sub-paragraph (1) shall be
punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh
rupees and with a further fine which shall not be less than fifty rupees but which may extend to five
hundred rupees for every day after the first day after which the default continues.
Within 14 days from conversion, LLP shall display the facts of conversion in all documents,
communication, display for next 12 months.
Else, Penalty is as follows:
Minimum Fine: Rs. 10,000 Maximum Fine: Rs. 1,00,000
Further Fine if the original fine remains unpaid:
Minimum Fine: Rs. 50 per day Maximum Fine: Rs. 500 per day.
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THE THIRD
SCHEDULE
(See section 56)
CONVERSION FROM PRIVATE COMPANY INTO LIMITED LIABILITY
PARTNERSHIP
1. Interpretation.—In this Schedule, unless the context otherwise requires,—

(a) "company" means a private company as defined in clause (iii) of sub-section (1) of
section 3of the Companies Act, 1956 (1 of 1956);
(b) "convert", in relation to a private company converting into a limited liability partnership,
means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the
undertaking of the private company to the limited liability partnership in accordance with this
Schedule.
and the undertaking
2. Eligibility for conversion of private companies into limited liability partnership.—(1) A
company may convert into a limited liability partnership by complying with the requirements as to the
conversion set out in this Schedule.
(2) A company may apply to convert into a limited liability partnership in accordance with this
Schedule if and only if—
(a) there is no security interest in its assets subsisting or in force at the time of application; and
(b) the partners of the limited liability partnership to which it converts comprise all the
shareholders of the company and no one else.
(3) Upon such conversion, the company, its shareholders, the limited liability partnership into which
the company has converted and the partners of that limited liability partnership shall be bound by the
provisions of this Schedule that are applicable to them.
Consent of 100% shareholders needed for conversion
Partners of LLP should be from Shareholders of Company Only, No new person.
No security interest should be there.
3. Statements to be filed.—A company may apply to convert into a limited liability partnership by
filing with the Registrar—
(a) a statement by all its shareholders in such form and manner to be accompanied by such fees as
the Central Government may prescribe, containing the following particulars, namely:—
(i) the name and registration number of the company;
(ii) the date on which the company was incorporated; and
Required Documents:
Statement by all shareholders + Old Registration Certificate + Incorporation Document
shall, subject to the provisions of this Act and the rules made thereunder, register the documents and issue
a certificate of registration in such form as the Registrar may determine stating that the limited liability
partnership is, on and from the date specified in the certificate, registered under this Act:
inform the concerned Registrar of Companies with which it was registered under the provisions of the
Companies Act, 1956 (1 of 1956) about the conversion and of the particulars of the limited liability
1
Registrar.
registration issued under paragraph 4—
(b) all tangible (movable or immovable) and intangible property vested in the company, all assets,
interests, rights, privileges, liabilities, obligations relating to the company and the whole of the
undertaking of the company shall be transferred to and shall vest in the limited liability partnership
(c) the company shall be deemed to be dissolved and removed from the records of the Registrar
of Companies.
From the date of COI, LLP becomes a body corporate, will acquire Previous Company and
Company will be deemed to be dissolved.
7. Registration in relation to property.—If any property to which clause (b) of paragraph 6 applies
is registered with any authority, the limited liability partnership shall, as soon as practicable, after the date
of registration, take all necessary steps as required by the relevant authority to notify the authority of the
conversion and of the particulars of the limited liability partnership in such form and manner as the
authority may determine.
8. Pending proceedings.—All proceedings by or against the company which are pending before any
Court, Tribunal or other authority on the date of registration may be continued, completed and enforced
by or against the limited liability partnership.
judgment of any Court, Tribunal or other authority in favour of or against the company may be enforced
Any order for or against old company will continue with LLP
10.Existing agreements. —Every agreement to which the company was a party immediately before
the date of registration, whether or not of such nature that the rights and liabilities thereunder could be
(a) the limited liability partnership were a party to such an agreement instead of the company; and
(b) for any reference to the company, there were substituted in respect of anything to be done on
or after the date of registration a reference to the limited liability partnership.
All existing agreements in the name of old company will continue in the name of LLP
instruments and arrangements subsisting immediately before the date of registration relating to the
company or to which the company is a party shall continue in force on and after that date as if they relate
2
to the limited liability partnership and shall be enforceable by or against the limited liability partnership as
if the limited liability partnership were named therein or were a party thereto instead of the company.
All existing contracts in the name of old company will continue in the name of LLP
paragraph 11 applies shall continue in force on or after the date of registration as if the limited liability
partnership were the employer thereunder instead of the company.
All existing EMPLOYMENT contracts in the name of old company will continue in the name of LLP
13. Existing appointment, authority or power.—(1) Every appointment of the company in any role
or capacity which is in force immediately before the date of registration shall take effect and operate from
(2) Any authority or power conferred on the company which is in force immediately before the date
of registration shall take effect and operate from that date as if it were conferred on the limited liability
partnership.
apply to any approval, permit or licence issued to the company under any other Act which is in force
Approval, Permit or Licence granted to Old company shall continue in the name of LLP
15. Notice of conversion in correspondence.—(1) The limited liability partnership shall ensure that
official correspondence of the limited liability partnership bears the following, namely:—
(a) a statement that it was, as from the date of registration, converted from a company into a
limited liability partnership; and
(b) the name and registration number of the company from which it was converted.
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THE FOURTH SCHEDULE
(See section 57)
CONVERSION FROM UNLISTED PUBLIC COMPANY INTO LIMITED LIABILITY
PARTNERSHIP
1. Interpretation.— (1) In this Schedule, unless the context otherwise requires,—

(a) "company" means an unlisted public company;
(b) "convert", in relation to a company converting into a limited liability partnership, means a
transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking
of the company to the limited liability partnership in accordance with the provisions of this Schedule;
and the undertaking
2. Conversion of company into a limited liability partnership.—(1) A company may convert into a
limited liability partnership by complying with the requirements as to the conversion set out in this
Schedule.
(2) Upon such conversion, the company, its shareholders, the limited liability partnership into which
the company has converted and the partners of that limited liability partnership shall be bound by the
provisions of this Schedule that are applicable to them.
3. Eligibility for conversion.—A company may apply to convert into a limited liability partnership
in accordance with the provisions of this Schedule if and only if—
(a) there is no security interest in its assets subsisting or in force at the time of application; and
(b) the partners of the limited liability partnership to which it converts comprise all the
shareholders of the company and no one else.
Consent of 100% shareholders needed for conversion
Partners of LLP should be from Shareholders of Company Only, No new person.
No security interest should be there.
4. Statements to be filed.—A company may apply to convert into a limited liability partnership by
filing with the Registrar—
(a) a statement by all its shareholders in such form and manner to be accompanied by such fee as the
Central Government may prescribe containing the following particulars, namely:—
(i) the name and registration number of the company;
(ii) the date on which the company was incorporated; and
Required Documents:
Statement by all shareholders + Old Registration Certificate + Incorporation Document
shall, subject to the provisions of this Act, and the rules made thereunder, register the documents and
issue a certificate of registration in such form as the Registrar may determine stating that the limited
liability partnership is, on and from the date specified in the certificate, registered under this Act:
inform the concerned Registrar of Companies with which it was registered under the provisions of the
Companies Act, 1956 (1 of 1956) about the conversion and of the particulars of the limited liability
1
Registrar.
registration issued under paragraph 5—
(b) all tangible (movable or immovable) and intangible property vested in the company, all assets,
interests, rights, privileges, liabilities, obligations relating to the company and the whole of the
undertaking of the company shall be transferred to and shall vest in the limited liability partnership
(c) the company shall be deemed to be dissolved and removed from the records of the Registrar
of Companies.
From the date of COI, LLP becomes a body corporate, will acquire Previous Company and
Company will be deemed to be dissolved.
8. Registration in relation to property.—If any property to which clause (b) of paragraph 7 applies
is registered with any authority, the limited liability partnership shall, as soon as practicable, after the date
of registration, take all necessary steps as required by the relevant authority to notify the authority of the
conversion and of the particulars of the limited liability partnership in such form and manner as the
authority may determine.
9. Pending proceedings.—All proceedings by or against the company which are pending in any
Court or Tribunal or before an authority on the date of registration may be continued, completed and
enforced by or against the limited liability partnership.
judgment of any Court, Tribunal or other authority in favour of or against the company may be enforced
Any order for or against old company will continue with LLP
11. Existing agreements.—Every agreement to which the company was a party immediately before
the date of registration, whether or not of such nature that the rights and liabilities thereunder could be
(a) the limited liability partnership were a party to such an agreement instead of the company; and
(b) for any reference to the company, there were substituted in respect of anything to be done on
or after the date of registration a reference to the limited liability partnership.
All existing agreements in the name of old company will continue in the name of LLP
instruments and arrangements subsisting immediately before the date of registration relating to the
company or to which the company is a party shall continue in force on and after that date as if they relate
to the limited liability partnership and shall be enforceable by or against the limited liability partnership as
if the limited liability partnership were named therein or were a party thereto instead of the company.
All existing contracts in the name of old company will continue in the name of LLP
2
paragraph 12 applies shall continue in force on or after the date of registration as if the limited liability
partnership were the employer thereunder instead of the company.
All existing EMPLOYMENT contracts in the name of old company will continue in the name
of LLP
14. Existing appointment, authority or power.—(1) Every appointment of the company in any role
or capacity which is in force immediately before the date of registration shall take effect and operate from
(2) Any authority or power conferred on the company which is in force immediately before the date
of registration shall take effect and operate from that date as if it were conferred on the limited liability
partnership.
apply to any approval, permit or licence issued to the company under any other Act which is in force
Approval, Permit or Licence granted to Old company shall continue in the name of LLP
16. Notice of conversion in correspondence.—(1) The limited liability partnership shall ensure that
official correspondence of the limited liability partnership bears the following, namely:—
(a) a statement that it was, as from the date of registration, converted from a company into a
limited liability partnership; and
(b) the name and registration number of the company from which it was converted.
3
FACTORIES ACT, 1948 for CMA INTER LAW | CA Raghav Goel
FACTORIES ACT, 1948 w.e.f. 1.4.1949
CONCEPT 1. MEANING OF FACTORY Section 2(m)
“Factory” means any premises including the precincts thereof—
(i) whereon 10 or more workers are (ii) whereon 20 or more workers are
working, or were working on any day of the working, or were working on any day of the
preceding 12 months, and in any part of preceding 12 months, and in any part of
which a manufacturing process is being which a manufacturing process is being
carried on with the aid of power, or is carried on without the aid of power, or is
ordinarily so carried on, or ordinarily so carried on, —
but does not include
A mine A mobile unit Railway A hotel A restaurant Eating place.

belonging to running shed
the armed
forces of the
Union
Counting Rule:
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.
Electronic Data Processing or Computer unit not a Factory
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.
State Amendments: Certain State Governments have increased limit of 10 workers to 20

workers and limit of 20 workers to 40 workers.
CONCEPT 2. MEANING OF MANUFACTURING PROCESS 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 (iii) generating, transforming, or
substance; or transmitting power; or
Page 1 of 23
(iv) composing types for printing, printing by (v) constructing, reconstructing, repairing,
letter press, lithography, photogravure or refitting, finishing or breaking up ships or
other similar process or book binding; 3 or vessels; or
(vi) preserving or storing any article in cold storage;
CONCEPT 3. MEANING OF OCCUPIER Section 2(n)
“Occupier” of a factory means the person who has ultimate control over the affairs of the
factory,
Provided that—
(i) in the case of a firm or (ii) in the case of a company, (iii) in the case of a factory
other association of owned or controlled by the
individuals, any one of the directors Government,
Any one of the individual the person or persons

partners or members appointed to manage the
affairs
Provided further that in the case of a ship which is being repaired, or on which maintenance
work is being carried out, in a dry dock which is available for hire,—
(1) the owner of the dock shall be deemed (2) the owner of the ship or his agent or
to be the occupier master or other officer-in-charge of the ship
CONCEPT 4. MEANING OF WORKER Section 2(l = el)
✓ “Worker” means a person employed,

✓ directly or by or through any agency (including a contractor)
✓ with or without the knowledge of the principal employer,
✓ whether for remuneration or not,
✓ in any manufacturing process, or
✓ in cleaning any part of the machinery or premises used for a manufacturing process,
or
✓ in any other kind of work incidental to, or connected with, the manufacturing process,
✓ but does not include any member of the armed forces of the Union
CONCEPT 5. MULTIPLE UNITS AND MULTIPLE FACTORIES
✓ The State Government may,

✓ After giving an opportunity of being heard,
✓ on its own or on an application made in this behalf by an occupier,
✓ direct that different departments or branches of a factory
Page 2 of 23
✓ shall be treated as separate factories or

✓ that two or more factories of the occupier shall be treated as a single factory
CONCEPT 6. APPROVAL LICENSING AND REGISTRATION OF FACTORIES
The State Government may make rules for the following purposes:
The submission of The permission in The submission of The registration and

plans of factories to writing of the State plans and licensing of factories
the Chief Inspector Government or the specifications
or the State Chief Inspector to be
Government obtained for the site
on which the factory
is to be situated and
for the construction
or extension of any
factory;
If on an application for permission no order is communicated within 3 months from the date
on which it is so sent, the permission applied for in the said application shall be deemed to
have been granted.
Appeal against refusal can be filed in 30 days to Central Government against State
Government and to State Government in any other case.
CONCEPT 7. NOTICE BY OCCUPIER
15 Days Advance Notice at the time of start containing following particulars:
1. The occupier shall, at least 15 days before he begins to occupy or use any premises as
a factory, send to the Chief Inspector a written notice containing—
2. the name and situation of the factory;
3. the name and address of the occupier;
4. the name and address of the owner of the premises or building including the precincts
5. the address to which communications relating to the factory may be sent;
6. the nature of the manufacturing process to be carried on during the next 12 months
7. the total rated horse power installed or to be installed in the factory,
8. the name of the manager of the factory
9. the number of workers likely to be employed in the factory;
10. such other particulars as may be prescribed.
30 Days advance Notice in case of Non working factory becomes working
A factory engaged in a manufacturing process which is ordinarily carried on for less than
180working days in the year resumes working, the occupier shall send a written notice to the
Chief Inspector at least 30 days before the date of the commencement of work.
Page 3 of 23
7 days’ notice in case of New Manager

Whenever a new manager is appointed, the occupier shall send to the Inspector notice and
to the Chief Inspector a copy thereof within 7 days from the date on which such person takes
over charge.
CONCEPT 8. GENERAL DUTIES OF OCCUPIER
(1) Every occupier shall ensure, the health, safety and welfare of all workers while they are
at work in the factory
(2) the matters to which such duty extends, shall include—
(a) the provision (b) the (c) the (d) the (e) the
and arrangements provisions of maintenance of provision,
maintenance of in the factory such all places of maintenance or
plant and for ensuring information, work in the monitoring of
systems of work safety and instruction, factory in a such working
in the factory absence of risks training and condition that is environment in
that are safe to health in supervision as safe and the factory for
and without connection with are necessary to without risks to the workers
risks to health: the use, ensure the health that is safe,
handling, health and without risks to
storage and safety of all health and
transport of workers at adequate as
articles and work: regards
substances; facilities and
arrangements
for their
welfare at
work.
(3) Every occupier shall prepare, and revise, a written statement of his general policy with
respect to the health and safety of the workers at work and to bring it to the notice of all the
workers.
CONCEPT 9. INSPECTORS
1. The State Government may appoint Inspectors and may assign to them such local limits
as it may think fit.
2. The State Government may appoint Chief Inspector who shall, in addition to the powers
conferred on a Chief Inspector under this Act, exercise the powers of an Inspector
throughout the State.
3. The State Government may, appoint as many Additional Chief Inspectors, Joint Chief
Inspectors and Deputy Chief Inspectors and as many other officers as it thinks fit.
4. No person shall be appointed who is or becomes directly or indirectly interested in a
factory or in any process or business carried on therein.
5. Every District Magistrate shall be an Inspector for his district.
Page 4 of 23
6. Every Chief Inspector, Additional Chief Inspector, Joint Chief Inspector, Deputy Chief
Inspector and every other officer appointed under this section shall be public servant.
CONCEPT 10. POWERS OF INSPECTORS
1. Enter, any place which is used, or which he has reason to believe is used, as a factory.
2. Make examination of the premises, plant, machinery, article, or substance.
3. Inquire into any accident or dangerous occurrence, whether resulting in bodily injury,
disability or not, and take on the spot or otherwise statements of any person which he
may consider necessary for such inquiry.
4. Require the production of any prescribed register or any other document.
5. Seize, or take copies of, any register, record or other document or any portion thereof as
he may consider necessary in respect of any offence.
6. Direct the occupier that any premises or any part thereof, or anything lying therein, shall
be left undisturbed for so long as is necessary.
7. Take measurements and photographs and make such recordings as he considers
necessary.
8. Taking with him any necessary instrument or equipment.
9. In case of any dangerous article or substance found in any premises, direct it to be
dismantled or test it or detain it for so long as is necessary.
10. Exercise such other powers as may be prescribed.
CONCEPT 11. CERTIFYING SURGEONS
1. The State Government may appoint qualified medical practitioners to be certifying

surgeons.
2. A certifying surgeon may, with the approval of the State Government, authorise any
qualified medical practitioner to exercise any of his powers under this Act.
3. No person shall be appointed or continue to exercise such powers, who is or becomes the
occupier of a factory or is or becomes directly or indirectly interested therein.
4. The certifying surgeon shall carry out such duties as may be prescribed in connection
with—
(a) the examination and certification of young persons.
(b) the examination of person engaged in factories in such dangerous occupations.
(c) the exercising of such medical supervision as may be prescribed for any factory or class or
description of factories where—
(i) cases of illness have (ii) there is a likelihood of (iii) young persons are, or
occurred. injury to the health of are about to be, employed in
workers employed in that any work which is likely to
manufacturing process; cause injury to their health.
Certificates of (1) It shall be issued by Certifying surgeon.

fitness (2) It shall be valid for 12 months.
(3) Fee payable for certificate shall be paid by Occupier.
Page 5 of 23
CONCEPT 12. HEALTH RELATED MEASURES
Cleanliness (a) accumulation of dirt and refuse shall be removed daily from the floors
and benches of workrooms and from staircases and passages
(b) the floor of every workroom shall be cleaned at least once in every
week
(c) effective means of drainage shall be provided and maintained;
(d) all inside walls and partitions, all ceilings or tops of rooms and all walls,
sides and tops of passages and staircases shall—
• where they are painted with non washable water-paint or
varnished, be repainted or re-varnished at least once in every
period of 5 years
• where they are painted with washable water-paint, be re-painted
with at least one coat of such paint at least once in every period of
3 years and washed at least once in every period of 6months;
• where they are painted or varnished or where they have smooth
impervious surfaces be cleaned at least once in every period of
fourteen months by such method as may be prescribed;
• in any other case, be kept white washed or colour washed, and the
whitewashing or colour washing shall be carried out at least once
in every period of fourteen months;
(e) all doors and window frames and other wooden or metallic framework
and shutters shall be kept painted or varnished at least once in every
period of 5 years;
Disposal of Effective arrangements for the treatment of wastes and effluents must be
wastes and in place.
effluents
Ventilation (a) Adequate ventilation by the circulation of fresh air.
and (b) Temperature to have reasonable conditions of comfort and prevent
temperature injury to health
Dust and (1) Effective measures shall be taken to prevent inhalation and
fume accumulation of dust and fume.
(2) Any exhaust appliance shall be applied as near as possible to the point
of origin of the dust, fume or other impurity.
(3) No stationary internal combustion engine shall be operated unless the
exhaust is conducted into the open air.
Artificial (1) Humidity to be maintained, if needed, it shall be artificially increased.
humidi- (2) Water used for the purpose shall be taken from a public supply, should
-fication be purified, if not already purified.
Overcrowding (1) No room in any factory shall be overcrowded.

(2) At least 14.2 cubic meters of space for every worker should be given.
(3) A notice specifying the maximum number of workers must be
displayed.
Page 6 of 23
Lighting (1) There shall be provided and maintained sufficient and suitable lighting,
natural or artificial, or both.
(2) All glazed windows and skylights shall be kept clean on both the inner
and outer surfaces.
(3) Effective provision shall be made for the prevention of glare, reflection,
Shadows.
Drinking (1) Effective arrangements shall be made to provide and maintain at
water suitable points conveniently situated for all workers, a sufficient supply
of wholesome drinking water.
(2) All such points shall be legibly marked “drinking water” in a language
understood by a majority of the workers.
(3) No such point shall be situated within 6 meters of any washing place,
urinal, latrine, spittoon, open drain.
(4) If more than 250 workers are ordinarily employed, cool drinking water
during hot weather shall be provided.
Latrines and (1) Sufficient latrine and urinal shall be provided, conveniently situated
urinals and accessible to workers at all times while they are at factory.
(2) Separate enclosed latrines and urinals shall be provided for male and
female workers;
(3) They shall be adequately lighted and ventilated.
(4) They shall be maintained in a clean and sanitary condition;
(5) Sweepers shall be employed.
(6) If more than 250 workers are ordinarily employed—
a. all latrine and urinal accommodation shall be of prescribed
sanitary types;
b. the floors and internal walls, up to a height of 90 centimeters, of
and the sanitary blocks shall be laid in glazed tiles to provide a
smooth polished surface;
c. they shall be thoroughly washed and cleaned at least once in
every 7 days with suitable detergents or disinfectants or with
both.
Spittoons (1) There shall be provided a sufficient number of spittoons in convenient
places and they shall be maintained in a clean and hygienic condition.
(2) No person shall spit within the premises of a factory except in the
spittoons
(3) Whoever spits elsewhere shall be punishable with fine not exceeding
5 rupees.
CONCEPT 13. WELFARE RELATED MEASURES
Washing (1) Adequate and suitable facilities for washing shall be provided.
facilities (2) Separate and adequately facilities shall be provided male and female.
(3) Such facilities shall be conveniently accessible and shall be kept clean.
Facilities for There must be suitable places for keeping clothing not worn during
storing and working hours and for the drying of wet clothing.
Page 7 of 23
drying
clothing
Facilities for Suitable arrangements for sitting shall be provided and maintained for all
sitting standing workers so that they may take rest whenever possible.
First-aid (1) There shall be provided and maintained to be readily accessible during
appliances all working hours first-aid boxes or cupboards equipped with the
prescribed contents,
(2) The number of such boxes or cupboards to be provided and
maintained shall not be less than 1 for every 150 workers
(3) Each first-aid box or cupboard shall be kept in the charge of a separate
responsible and qualified person and who shall always be readily
available.
(4) In every factory wherein more than 500 workers are ordinarily
employed there shall be provided and maintained an ambulance room.
Canteens Where more than 250 workers are ordinarily employed, a canteen shall be
provided.
Shelters, rest (1) Where more than 150 workers are ordinarily employed, adequate and
rooms and suitable shelters or rest rooms and a suitable lunch room, with
lunch rooms provision for drinking water, where workers can eat meals brought by
them, shall be provided.
(2) The shelters or rest rooms or lunch rooms shall be sufficiently lighted
aid ventilated and shall be maintained in a cool and clean condition.
Creches. every factory wherein more than 30 women workers are ordinarily employed
ere shall be provided and maintained a suitable room or rooms for the use of
dren under the age of 6 years of such women.
h rooms shall provide adequate accommodation, shall be adequately lighted
ventilated, shall be maintained in a clean and sanitary condition and shall be
er the charge of women trained in the care of children and infants.
Welfare Where 500 or more workers are ordinarily employed the occupier shall
officers employ welfare officers.
CONCEPT 14. SAFETY RELATED MEASURES
Major (1) Fencing of machinery;

categories of (2) Work on or near machinery in motion;
safety (3) Employment of young persons on dangerous machines;
measurers (4) Striking gear and devices for cutting off power;
(5) Self acting machines;
(6) Casing of a new machinery;
(7) Prohibition of employment of women and children near cotton
openers;
(8) Lifting machines, chains, ropes and lifting tackles;
(9) Revolving machinery;
(10) Floors, stairs and means of access;
(11) Pits, sumps openings in floors etc.,;
Page 8 of 23
(12) Excessive weights;

(13) Protection of eyes;
(14) Precaution against dangerous fumes, gases, etc.,
(15) Precautions regarding the use of portable electric light;
(16) Explosive or inflammable dust, gas etc.,
(17) Precaution in case of fire;
(18) Safety on buildings and machinery;
(19) Maintenance of buildings;
(20) Appointment of safety officers.
Hazardous (1) State Government shall appoint a Site Appraisal Committee.

Processes
(2) Site Appraisal Committee shall examine an application for the
establishment of a factory involving hazardous process
(3) It will make its recommendation to the State Government within 90

days.
(4) The Committee has the power to call for any information from the
person making an application.
(5) When the application is got approved by the State Government, it shall
not be necessary to obtain a further approval from the Central Board
of the State Board of pollution authorities.
Responsibility (1) To lay down a detailed policy with respect to the health and safety of
of the the workers
occupier (2) To disclose all the information regarding dangers
(3) To draw up an onsite emergency plan and detailed disaster control
measures
(4) To lay down measures for the handling usage, transportation and
storage and disposal of hazardous substances
Powers of the Power to inquire to the standards of health and safety observed in a
Central factory.
Government Power to provide emergency standards in respect of a factory.
Power of fixing the maximum permissible threshold limits of exposure of
chemical and toxic substances
Safety ✓ Occupier shall set up a Safety Committee

Committee ✓ consisting of equal number of representations of workers and
management
✓ to promote co-operation between the workers and the management
✓ in maintaining proper safety and health at work
CONCEPT 15. WORKING HOURS OF ADULTS
Weekly hours Maximum 48 Hours per week.
Page 9 of 23
Weekly 1. First fay of the week shall be holiday.

holidays 2. If he works on such day, 1 complimentary off will be given in the same
month or next 2 months.
3. Maximum 10 days working allowed without holiday.
Daily working 9 hours with 1 hour break.

hours
Intervals for 1. Working stretch without break cannot exceed 5 hours.
rest 2. Half an hour break compulsory after 5 hours continuous working.
Spread over Maximum spread over including work, over time, break shall not exceed
10.5 hours a day.
Night Shift Allowed subject to same duration of working hours.
Overlapping Not allowed.
shift
Extra wages Double rate of wages shall apply.
for overtime
Restriction on One worker, two jobs at the same time prohibited.
double
employment
Notice of (1) Period of work must be displayed in Factory.
periods of (2) Copy of displayed notice shall be sent to Inspector.
work for
adults
Register of Contents:
adult workers
(a) Name of each adult worker in the factory;
(b) Nature of his work;
(c) Group, if any, in which he is included;
(d) Relay to which he is allotted;
(e) such other particulars as may be prescribed
CONCEPT 16. EMPLOYMENT OF WOMEN
Working Shall be same as male.

Hours
Prohibited 7 PM to 6 AM
working
hours 7 pm can be extended by State Government to 10 pm.
6 am can be extended back by State Government to 5 am.
CONCEPT 17. EMPLOYMENT OF YOUNG PERSONS
Prohibition of If age is less than 14 years, no work allowed.

employment
Page 10 of 23
of young
children
Non-adult Formalities needed for non-adult worker:
workers to (1) A certificate of fitness
carry tokens (2) Such worker must carry a token
Certificates of (4) It shall be issued by Certifying surgeon.

fitness (5) It shall be valid for 12 months.
(6) Fee payable for certificate shall be paid by Occupier.
Prohibited 7 pm to 6 am.
timings for
female
adolescent or
a male
adolescent
Working Maximum working hours 4.5 per day.
hours for
children Prohibited hours for male child
10 pm to 6 am.
Prohibited hours for female child

7 pm to 8 am.
Register of Contents:
child workers
(a) The name of each child worker in the factory,
(b) The nature of his work,
(c) The group, if any, in which he is included,
(d) Where his group works on shifts, the relay to which he is allotted, and
(e) The number of his certificate of fitness
CONCEPT 18. ANNUAL LEAVE WITH WAGES
Minimum 240 days per year

working
needed
Leave credit Adult:
rule 1 leave for 20 days worked
Child:
1 leave for 15 days worked
Leave carry Maximum 30 for adult, 40 for child.

forward
Page 11 of 23
However, if leave applied but not approved shall stand carried forward
without limit.
Frequency of Maximum 3 times in 1 year.
leave
Leave 15 days in advance.
application
However, 30 days in advance in case of public utility service.
Wages during Shall be paid.
leave period
Payment in Worker may apply for advance when he goes for leave for min 4 days in
advance case of adult and 5 days in case of child.
CONCEPT 19. Obligations and Rights of workers
Obligations (1) No willfully interfere with or misuse any appliance, convenience or

other thing
(2) No willfully and without reasonable cause any action which is likely to
endanger himself or others;
(3) No willfully neglect to make use of any appliance or other thing
Rights (1) To obtain from the occupier, information relating to workers’ health
and safety at work.
(2) To get trained within the factory wherever possible
(3) To represent to the Inspector for inadequate provision for protection
of his health or safety in the factory.
CONCEPT 20. Major terms
Adult Completed 18 years of age.

Adolescent Completed 15 but not 18.
Child Not completed 15.
Young Child and adolescent.
Week 7 days starting from Saturday midnight.
Competent ✓ A person or an institution
Person ✓ recognized by the Chief Inspector
✓ for the purposes of carrying out tests, examinations and inspections.
Hazardous ✓ Any process or activity
Process ✓ in relation to an industry
✓ specified in the First Schedule where,
✓ unless special care is taken,
✓ raw materials used therein or
✓ the intermediate or finished products, bye-products, wastes, or
effluents thereof would-
(1) cause material impairment to the health of the persons engaged in
or connected therewith, or
(2) result in the pollution of the general environment.
Page 12 of 23
QUESTIONS ANSWERS
Question 1.
Write short note on “Working hours for children” (4 marks; 2010 -
June)
Answer: 1
Working Hours for Children: No child shall be employed or permitted:
(i) to work in any factory for more than four and half hours in any day;
(ii) during the night;
(iii) not more than two shifts and shifts should be 5 hours apart;
(iv) no child shall be allowed to work in any factory on any day on which he has already
been working in any other factory;
(v) No female child shall be allowed to work in any factory except between 8 am to 7
pm.
Question 2.
Write short note on 'Overcrowding' (Factories Act). (4 marks; 2010
- Dec)
Answer: 2
Overcrowding as per Factories Act:
(i) No room in any factory shall be overcrowded to become injurious to health.
(ii) Space for worker:
• 9.9 cubic meter for every worker for factories existing before application of
Act and
• 14.2 Cubic meter for every worker for factories built after the
commencement of the Factories Act.
(iii) If the chief inspector requires, a notice specifying the maximum number of workers
who may be employed in the room shall be posted in each workroom.
(iv) The Chief inspector may grant exemptions to above conditions if he is satisfied that
such conditions are unnecessary.
Question 3.
Write short note on ‘Duties of occupier’ (4 marks; 2011 -
June)
Answer: 3
Duties of Occupier:
(i) He should ensure safety, health and welfare of all workers who are working in his
factory.
(ii) He should maintain plant and machinery of the factory so that they are safe and
without risk.
(iii) Handling, storage, transport of all materials should be safe and without risk.
(iv) He should provide, maintain and monitor the working environment in the factory
without risk and hazard to workers and adequate in facilities.
(v) The occupier should prepare, revise appropriately and display his general policy
regarding the safety, security and health of the workers working in his factory.
Question 4.
Write short note on ‘Safety Officers’ (Factories Act); (4 marks; 2011
- Dec)
Answer: 4
Page 13 of 23
If State Govt. requires every factory will have a safety officer if it has one thousand or more
workers ordinarily. The duties, qualifications and conditions of appointment and service will
be decided by the State Govt. The occupier is required to appoint the specified number of safety
officers (as given-the order of State Govt.) if (i) one thousand or more workers are ordinarily
employed; Or (ii) State Govt. is of the opinion that the manufacturing process in the factory
may cause risk of body injury, poisoning, disease, or any hazard to health.
Question 5.
Write short note on ‘Cleanliness of factory’ (5 marks; 2017
– Dec)
Answer: 5
Section 11 of the Act provides every factory shall be kept clean and free from effluvia arising
from any drain, privy or other nuisance, and in particular-
• removal of accumulated dirt and refuse on floors, benches of workroom, stair cases and
passages and effective disposal of the same;
• cleaning of the floor of every workroom - once in every week by washing with
disinfectant or by some other effective method;
• providing effective drainage for removing water to the extent possible;
• to ensure that interior walls and roofs etc., are kept clean the following is to be complied
with-
• white wash or colour wash should be carried out at least once in every period of 14
months;
• where surface has been painted or varnished, repair or re-varnish should be carried out
once in every five years, if washable then once in every period of six months;
• where they are painted or varnished or where they have smooth impervious surface, it
should be cleaned once in every period of 14 months by such method as may be
prescribed.
• all doors, windows and other framework which are of wooden or metallic shall be kept
painted or varnished at least once in every period of five years;
The dates on which such processes are carried out shall be entered in the described register.
Question 6.
Write short note on ‘Manufacturing process under the Factories Act, 1948’. (5 marks; 2018
- June)
Answer:
Manufacturing process under the Factories Act, 1948.
Manufacturing Process" means Process for:
(i) Making, altering, repairing, oiling, washing, cleaning, ornamenting, finishing,
packing, breaking up, 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 the letter press, lithography, photographing, or other
similar process or book binding, or
(v) Constructing, re-constructing, repairing, refitting, or breaking up of ships or vessels
; or
(vi) Preserving or Storing any articles in cold storage;
In this regard it becomes necessary to discuss some special circumstances that came up
in some court cases:
Page 14 of 23
(1) Preparation of food with aid of various electrical appliances in kitchen of a hotel is a
manufacturing process: As decided in the case of "Poona Industrial Hotel vs. I.C. Sarin,
1980, Lab I.C. 100.
(2) Selling of petrol or diesel by a petrol dealer or repairing of motor vehicle will not come
within the term "manufacturing process", as noted in the case of: "National Service
Centre and Petrol Pump Vs. E.S.I Corporation, 1983 lab I.C. 412 (P. & H.).
(3) The work of mere packing cannot be called as a manufacturing process; {ref. A.I.R.
1955 NUC 2710}.
(4) The business of sale of diesel oil, motor spirit, lubricant, servicing of cars and lorries,
repairing vehicles and charging batteries with the aid of power, by employing more
than 20 workers / labourers amount to manufacturing process, as noted in the case of
"Baranagar Service Station Vs. E.S.I Corporation (1987) 1 L.L.N 912 (Cal.) (Divisional
Bench). & Lab I.C. 302.
(5) Decorticating groundnuts in electric mill is a manufacturing process (A.I.R. 1959
Madras 30).
(6) Breaking up of boulders is a manufacturing process - as decided in case of "Larsen &
Toubro Vs. State of Orissa, 1992 Lab I.C. 1513 (Orissa Divisional Bench).
(7) Transportation of goods on contract basis from one place to another by road with the
assistance of transport carriers is not a manufacturing process-as decided in the case of
Regional Director, E.S.I.C Vs. Jaihind Roadways, Bangalore (2001 ),1 L.L.J 1187
(Karnataka).
(8) Reading the definition of 'Manufacturing Process' in the light of Supreme Court in
"Workmen", Delhi Electricity Supply Undertaking Vs. management", (1974) 3 S.C.C.
108, the word 'or' in Section 2(k) (iii) must be read as 'and'.
Question 7.
Write short notes on ‘Annual Leave under the Factories Act, 1948’ (5 marks; 2019
- June)
Answer:
Annual leave:
Section 79 of The Factories Act, 1948 Provides that every worker who has worked for a period
240 days or more in a factory during a calendar year shall be allowed leave with wages for a
number lays calculated at the rate of-
If an adult, one day for every 20 days of work performed by him during the previous calendar
rear
If a child, one day for every 15 days of work performed by him during the previous calendar
year
The following shall be deemed to be days on which the worker has worked for the purpose of
computation of the period of 240 days or more-
Any days of lay off, by agreement or contract or as permissible under the standing orders
In the case of a female worker, maternity leave for any number of days not exceeding 12 weeks
And the leave earned in the year prior to that in which the leave is enjoyed.
But the above shall not be entitled for a worker to earn leave. The leave admissible shall be
exclusive of all holidays whether occurring during or at either end of the period of leave.
In calculating the leave fraction of leave of half a day or more shall be treated as one full day's
leave and fraction of less than half a day shall be omitted.
Question 8.
Personnel Manager told to Director that at least one canteen shall be provided in every factory.
Do you agree? (2
marks; 2008 - Dec)
Page 15 of 23
Answer: 8
False: According to Factories Act, 1948, a canteen is required to be provided in any specified
factory if the number of workers working in it is more than 250. Hence, it is not mandatory for
every factory to provide canteen.
Question 9.
Occupier of a factory in relation to the company means factory Manager of the factory, Answer
based on legal provision. (2 marks;
2009 - June)
Answer:
False: Occupier has been defined in the Factories Act in Section 2(n) as the person who has
ultimate control over the affairs of the factory. It is also stated further that in case of firm or
other association of individuals, any one of the partners or members thereof shall be deemed
to be the 'occupier'. The Section 2 further states that in case of a company, any of the directors
shall be deemed to be the 'occupier'.
Question 10.
As per provision of Factories Act, every factory is to appoint at least one welfare Officer-Do
you agree? Answer citing rules. (2 marks;
2009 - June)
Answer:
False: In every factory wherein 500 or more workers are ordinarily employed, the occupier
shall employ such number of welfare officer as may be prescribed.
Question 11.
Comment on the following statements based on legal provisions:
(a) A factory owner can close a place of employment of his own. (2 marks; 2009
- Dec)
(b) Creches are compulsory in a factory where women employees are employed.
(2 marks; 2009 - Dec)
Answer: 11
(a) Prior permission of government is required for closure of a place of employment if the
industrial establishment employs 100 or more workmen.
(b) Creches are required to be provided when in a factory, more than 30 women are
employed.
Question 12.
Factories Act provides certain precaution measures in case of fire, give details.
(4 marks; 2010 - June)
Answer: 12
The precautions required in case of fire as per Factories Act, are as follows:
(i) All precautions and measured should be taken to prevent the occurrence of fire
inside and outside the factory.
(ii) Fire escape should be provided. This should be adequate for all the employees.
(iii) All necessary equipment and facilities should be provided to fight and put out the
fire.
(iv) All workers must be trained regarding what they should do in case of fire. All must
know where the escape is.
(v) The state govt. has powers to give directions in this regard.
(vi) The Chief Inspector has all the powers, if in his opinion, the measures and
precautions taken by factory to deal with fire, are inadequate, he may direct the
Page 16 of 23
factory to provide more facilities, equipment and arrangements in the factory. He

may also frame a time schedule for this.
Question 13.
(a) Manager of the factory fixed the working hours of women from 6 p.m. to 1 a.m. during
the period from Monday to Friday of first week of May 2010. Whether it is permissible,
cite with Rule position. (2
marks; 2010 - June)
(b) As per Factories Act 'First Aid Boxes' shall be provided and maintained not less than
one for every 200 workers ordinarily engaged. (2 marks;
2010 - June)
Answer: 13
(a) As per the provisions of Factories Act, the working hours for women are between 6.00
am to 7.00 pm. No woman shall be allowed to work from 7.00 pm to 6.00 am. The state
government has powers to alter the above limits but in no case the women will be
allowed to work in any factory between 10.00 pm to 6.00 am. Hence, the manager's
decision is incorrect in the eyes of law.
(b) As per the Factories Act, " first aid boxes" shall be provided and maintained not less
than one for every 150 (not 200 as given) workers ordinarily engaged.
Question 14.
Comment on the following based on legal provisions:
As per Factories Act, Canteen is mandatory in all the factories. (2 marks; 2010
- Dec)
Answer: 14
False. According to Factories Act, 1948, a canteen is required to be provided in any specialized
factory if the number of workers working in it is 250 or more. Hence, it is not mandatory for
every factory to provide canteen.
Question 15.
What is the normal time for payment of Wages (Factories Act). (4 marks; 2010
- Dec)
Answer: 15
(i) For Railway, factory or industrial or other establishment where less than 1,000
persons are working: Wages shall be paid before expiry of 7th day from date of
wage becoming payable.
(ii) For Railway, factory or industrial or other establishment where 1,000 or more
persons are working: Wages should be paid before expiry of 10th day from date of
wage becoming payable.
(iii) For persons employed in Dock, Wharf (landing place), or Jetty: Wages shall be paid
before expiry of 7th day from date of wage becoming payable.
(iv) When the person is removed from service, his due wages shall be paid to him before
the expiry of 2nd working day from the date of removal of service.
Question 16.
Comment on the following based on legal provisions: (d) Occupier of a Factory means the
person who occupies and resides in the factory. Offer your views. (2 marks;
2011 - June)
Answer: 16
The statement is wrong. The Occupier of a factory means any person having ultimate control
over the affairs of the factory.
Page 17 of 23
Question 17.
Comment on the following based on legal Provisions:
An young employee disagreed to work on dangerous machines in a factory. (2 marks; 2011
- Dec)
Answer: 17
A young employee cannot be allowed to work at any machine unless:
(i) he has been fully instructed to the dangers arising in connection with the machine
and the precautions to be taken; and
(ii) he has received sufficient training in work at the machine, or
(iii) he has under adequate supervision by a person who has thorough knowledge and
experience in the machine. (Section 23 of Factories Act, 1948).
(iv) State Government may prescribe / specify such machines which in its opinion are
of such dangerous character that young persons ought not work on them unless
foregoing requirements are complied with.
Question 18.
Any child can be employed in a factory. (2 marks; 2012 -
June)
Answer: 18
As per The Factories Act, 1948, Children below 14 years are not allowed to work in the factory.
Child means a child who has not completed the age of 15 years. After attaining the age of 14,
he or she can work in the factory provided he or she has a certificate of fitness given by a
competent authority.
Question 19.
"Young person" means a person who has completed 18 years of age (Factories Act, 1948). Do
you agree? (2 marks;
2012 - June)
Answer: 19
The statement is not correct. Young person means a person who is either a child or an
adolescent. [Sec 2(d), The Factories Act, 1948] A child means a person who has not completed
his 15th year of age. [Sec 2(c), The Factories Act, 1948] An adolescent means a person who
has completed his 15th year of age but not completed his 18th year. [Sec 2(b), The Factories
Act, 1948]
Question 20.
(a) Are there any provisions in the Factories Act for protection of eyes of Workmen?
(2 marks; 2012- Dec)
(b) (i) Who is 'Occupier' (Factories Act)
(ii) State the Duty of the Occupier when a new manager is appointed in the factory.
(2 + 2 = 4 marks; 2012- Dec)
Answer:
(a) Yes, State Govt. by rules require that effective screens or suitable goggles shall be
provided for the protection of eyes of persons employed on or in the immediate vicinity
of manufacturing process which involves:
1. Risk of injury to the eyes from particles or fragments thrown off in the course
of process or
2. Risk to the eyes by reason of exposure to excessive light.
(b) (i) Occupier has been defined in the Factories Act in Section 2(n) as the person who has
ultimate control over the affairs of the factory. It is also stated further that in case of
Page 18 of 23
firm or other association of individuals, any one of the partners or members thereof
shall be deemed to be the 'occupier'.
The Section 2 further states that in case of a company, any of the directors shall be
deemed to be the 'occupier'. The Supreme Court resolved in JK Industries vs Chief
Inspector of Factories in 7997that only a member of Board of Directors of the company
can be a 'occupier' of the factory of the company. The ultimate control of the factory
vests with the BOD of the company and not on anyone else. Any company which owns
a factory cannot nominate its employee or its officer except the director of the company
as the occupier of its factory.
(ii) When the new manager is appointed, it is the duty of the occupier to inform the
inspector and chief inspector in writing regarding the appointment within seven days of
the appointment.
Question 21.
Factories Act, 1948 is applicable to all the factories wherein 50 or more workers are working.
Answer: 21
Factories Act, 1948 is applicable to factory which is defined as:
Factory: means any premises including its precincts (means zone, sector, ground, division,
area. Precinct means any area enclosed by wall.) where
(i) ten or more workers are working or were working in any day of the preceding
twelve months, in a manufacturing process which is carried on with the help of
power Or
(ii) twenty or more workers are working or were working in any day of the preceding
twelve months, in a manufacturing process which is carried on without the help of
power.
Question 22.
As per Factories Act, adequate shelters, rest rooms and lunch rooms are mandatory in all the
factories. Do you agree? Give correct answer. (2
marks; 2013 - June)
Answer: 22
The occupier is required to provide suitable shelters or rest rooms and a suitable lunch rooms
with provision of drinking water, in his factory if more than one hundred and fifty workers are
ordinarily employed in it.
Question 23.
Does a laundry attached to the hospital (main Institution) used for washing linen used in the
hospital is factory within the meaning of the Factories Act, 1948? (3 marks;
2014 - June)
Answer: 23
When hospital is not a factory, it is obvious that any department of hospital cannot be treated
as factory.
In Dr. PSS Sundar Rao, GS v Inspector of Factories Vellore 1984II LLJ 237 Mad, the question
was whether a laundry attached to the Christian Medical College and Hospital, Vellore is
Factory within the meaning of this Act.
Page 19 of 23
The Madras High Court held that the laundry run by the hospital cannot be separated from the
main Institution. In order to ensure high degree of hygienic standard the Hospital is having its
own laundry for washing the linen used in the hospital.
Therefore, laundry is only subsidiary, minor or incidental establishment of the hospital which
is not a factory.
• One department of the Hospital established for the efficient functioning of the Hospital
cannot be therefore be disjoined from the main Institution and termed to be a factory.
• The paramount or the primary character of the main Institution alone has to be taken
into consideration and when the main Institution is not a factory; a department thereof
cannot become so, even though a manufacturing process is carried on there.
Question 24.
Explain the right of workers to warn about imminent danger under the Factories Act, 1948.
Answer: 24
As per Section 41H of the Factories Act, 1948, it is the right of workers to warn about imminent
danger
(1) Where the workers employed in any factory engaged in a hazardous process have
reasonable apprehension that there is a likelihood of imminent danger to their lives or
health due to any accident, they may bring the same to the notice of the occupier, agent,
manager or any other person who is in-charge of the factory or the process concerned
directly or through their representatives in the safety committee and simultaneously
bring the same to the notice of the Inspector.
(2) It shall be the duty of such occupier, agent, manager or the person incharge of the
factory or process to take immediate remedial action if he is satisfied about the
existence of such imminent danger and send a report forthwith the action taken to the
nearest Inspector.
(3) If the occupier, agent manager or the person incharge referred to in sub-section (2) is
not satisfied about the existence of any imminent danger as apprehended by the
workers, he shall, nevertheless, refer the matter forthwith to the nearest Inspector whose
decision on the question of the existence of such imminent danger shall be final.
Question 25.
Employees of an electricity generation station claimed that their unit is covered under the
definition of 'factory' considering the process of transforming and transmission of electricity
generated at the power station as a 'manufacturing process'. Will their claim succeed under
Factories Act, 1948.
(6 marks; 2016 - Dec)
Answer: 25
As per Section 2(k) of the Factories Act, 1948, 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;
(v) Constructing, reconstructing, repairing, refitting, finishing or breaking up ships or
vessels;
(vi) Preserving or storing any article in cold storage;
Page 20 of 23
Process undertaken at electricity generating station, Sub-station is transferring and transmitting

electricity is not a manufacturing process and are not thus factory- [Delhi Electricity Supply
Undertaking vs. Management of DESU, AIR(1973)SCC 365].
Question 26.
What are the responsibilities of an occupier in a factory? (5 marks; 2017 -
June)
Answer: 26
Responsibility of the occupier
The occupier has to follow the procedure:
• to lay down a detailed policy with respect to the health and safety of the workers;
• to disclose all the information regarding dangers including health hazards and the
measures to overcome such hazards arising from the exposure to or handling of the
materials or substances in the manufacture, transportation, storage and other processes
to the workers employed in the factory;
• to draw up an onsite emergency plan and detailed disaster control measures for the
factory and make known to the workers and to the general public living in the vicinity
of the factory, the safety measures required to be taken in the event of accident taking
place.
• to lay down measures for the handling usage, transportation and storage of hazardous
substances inside the factory premises and the disposal of such substances outside the
factory premises and publicize them in the manner prescribed among the workers and
the general public living in the vicinity.
Section 41C provides that the occupier is having specific responsibilities in relation to
hazardous processes. He has to maintain the health records of the employees. He is to appoint
experienced persons who possess specified qualifications in handling hazardous substances and
competent to supervise such handling within the factory.
Question 27.
Critically examine the duties of certified surgeon under the Factories Act, 1948.
Answer: 27
Section 10 under the Factories Act, 1948 provides that the State Government may appoint
qualified medical practitioners to be certifying surgeons for the purposes of this Act within
such local limits or for such factory or class or description of factories as it may assign to them
respectively. The duties of certified surgeons are as follows-
• the examination and certification of young persons;
• the examination of person engaged in factories in such dangerous occupations or
processes as may be prescribed;
• the exercising of such medical supervision as may be prescribed for any factory or class
or description of factories, where -
o cases of illness have occurred which it is reasonable to believe are due to the
nature of the manufacturing process carried on, or other conditions of work
prevailing, therein;
o by reason of any change in the manufacturing process carried on or in the
substances used therein or by reason of the adoption of any new manufacturing
process or of any new substance for use in a manufacturing process, there is a
likelihood of injury to the health of workers employed in that manufacturing
process;
Page 21 of 23
o young persons are, or are about to be, employed in any work which is likely to
cause injury to their health.
Question 28.
Discuss the welfare measures to be taken in a factory for the workmen employed therein as per
the Factories Act, 1948. (8
marks; 2019 - Dec)
Answer: 28
The following are the welfare measures prescribed in the Factories Act, 1948 to be provided
by the factory to their workmen:
As per Section 42 provides that in every factory adequate and suitable
facilities for washing shall be provided and maintained for the use of the
1. Washing facilities
workers. Separate and adequately screened facilities shall be provided for
the use of male and female workers.
Section 43 provides that the State Government may, in respect of any
Facilities for storing factory or class or description of factories, make rules requiring the
2.
and drying clothing provision therein of suitable places for keeping clothing not worn during
working hours and for the drying of wet clothing.
Section 44 provides that suitable arrangements for sitting shall be provided
and maintained for all workers obliged to work in a standing position, in
3. Facilities for sitting
order that they make take advantage of any opportunities for rest which may
occur in the course of their work.
Section 45 provides that first aid appliances shall be provided and
maintained so as to be readily accessible during all working hours or
4. First aid appliances cupboards equipped with the prescribed contents and the number of such
boxes or cupboards to be provided and maintained shall not be less than for
every 150 workers at any one time in the factory.
Section 46 provides that if more than 250 workers are employed in a factory
a canteen or canteens shall be provided and maintained by the occupier for
5. Canteens the user of the workers. The items of expenditure in the running of the
canteen which are not to be taken into account in fixing the cost of foodstuffs
shall be borne by the employer.
Section 47 provides that if more than 150 workers are employed adequate
Shelters, rest rooms and suitable shelters or rest rooms and a suitable lunch room with provision
6.
and lunch rooms for drinking water shall be provided and maintained for the use of the
workers.
Section 48 provides that if more than 30 women workers are employed there
shall be provided and maintained a suitable room for the use of children
7. Creches under the age of 6 years of such women. The same shall be adequately
ventilated and shall be maintained in clear and sanitary conditions and under
the charge of women trained in the care of children and infants.
Section 49 provides that if 500 or more than workers are employed in a
Welfare
8. factory, the occupier shall employ in the factory such number of welfare
Officers
officers as may be prescribed.
Question 29.
ABC Ltd. carrying manufacturing activities with aid of power and with eight workers for last
two years ending on 31.03.2014. Three more workers were appointed on 01.04.2014, two
workmen left the company on 30.04.2014. Thereafter no workman was employed nor any
workmen left. Mr. Basant, one of the workman demanded that Factories Act, 1948 shall be
Page 22 of 23
applicable to this company but the management denied. Give your opinion.
(3 marks; 2015 - Dec)
Answer:
According to Sec. 2 (m) of the Factories Act, 1948, 'factory' means any premises including the
precincts thereof:
(i) Wherein 10 or more workers are working or were working on any day of the
preceding 12 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) Wherein 20 or more workers are working or were working on any day of the
preceding 12 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.
In the given case, during the period 01.04.2014 to 30.04.2014, there were 11 workers carrying
manufacturing activities with aid of power. So, the Factories Act, 1948 is applicable on ABC
Ltd. Mr. Basant is correct.
Page 23 of 23
EMPLOYEE STATE INSURANCE ACT, 1948
INTRODUCTION
✓ First major legislation on ✓ To provide social ✓ The medical facilities

social security ✓ protection to employees ✓ also made available
✓ in contingencies ✓ to legal dependents of insured
✓ such as illness, person.
✓ long term sickness or ✓ This facility is also available to
✓ any other health risks retired persons also.
✓ due to employment injury
✓ or occupational hazards.
OBJECT OF THE ACT
✓ To provide for certain benefits ✓ To make provision for certain other related
✓ to employees in case of matters.
✓ sickness,
✓ maternity and
✓ employment injury and
APPLICABILITY
This Act extends to whole of India.
This Act applies to-
✓ All factories covered ✓ Government may apply the act ✓ Once applicable shall remain
✓ Government factories covered on others after giving 1 applicable forever.
✓ Seasonal Factories covered months’ notice.
✓ Act is also applicable to every ✓ ESI applies to shops, ✓ The Scheme also applies to
establishment employing 10 or ✓ hotels, Private Medical and
more persons. ✓ restaurants, Educational institutions
✓ cinemas including preview employing 10 or more persons
theatres, in certain States/UTs.
✓ road-motor transport
undertakings
✓ and newspaper establishments
employing 10 or more persons.
AREAS COVERED
The ESI Scheme is now notified in 606 Districts in 35 The scheme is yet to be implemented in
States and Union Territories, which include 467 Lakshadweep.
complete Districts. The Scheme is yet to be notified
in 138 districts.
[CMA INTER GROUP-I LAW] ESI ACT, 1948
WAGE LIMIT Maximum ` 21,000 per month.
VARIOUS JUDGEMENTS
In ‘Employees’ State Insurance In ‘Employees State Insurance In ‘Kuriacose V. Employees’ State

Corporation V. Premlal’ – 2009 Corporation, Orissa Region V. Insurance Corporation’ – (1988)
(Ker HC) it was held that ESI Gujarat Co-operative Milk (Ker) it was held that once
scheme will be applicable to Marketing the Act has become applicable to a
establishment preparing sweets Federation Limited’ – 2009 factory or an establishment, its
with the aid of LPG. (Ori.HC) it was held that in the application will be continuous.
absence of required number of
employees in Milk Federation, ESI
Act could not be extended upon it.
IMPORTANT DEFINITIONS
APPROPRIATE GOVERNMENT
Central Government in case of The State Government for all other cases.
✓ Centrally controlled organisations

✓ Railway administration
✓ major port
✓ mine
✓ oilfield
Confinement
Labour resulting in the issue of a living child or after 26 weeks of pregnancy resulting in the issue of
labour a child, whether alive or dead.
DEPENDANT
Section 2(6A) defines the term ‘dependant’ as any of the following of a deceased insured person:
• a widow, a • a widowed • if wholly • if wholly or in • a parent other a

legitimate or mother; dependent on the part dependant on widowed mother;
adopted son who earnings of the the earnings of the
has not attained the insured person at insured person at
age of 25 years, an the time of his the time of his
unmarried death, a legitimate death-
legitimate or or adopted son or
adopted daughter; daughter who has
attained the age of
25 years and is
infirm;
CA RAGHAV GOEL raghav.goel@icai.org Page 2

• a minor • a minor brother or • a widowed • a minor child of a • a minor child of a

illegitimate son, an an unmarried sister daughter-in-law; pre-deceased son; pre-deceased
unmarried or a widowed sister daughter where no
illegitimate if a minor; parent of the child
daughter or a is alive; or
daughter legitimate
or adopted
or illegitimate if
married and a minor
or if widowed and a
minor;
• a paternal grand-parent if no parent of the insured person is alive.
Employment injury
✓ Personal injury ✓ arising out of and in the course of ✓ whether it happens

✓ to an employee ✓ employment, within India or
✓ caused by accident or Outside India.
✓ occupational disease
EMPLOYEE
Any person employed for wages in or in connection with
the work of a factory or establishment to which the Act applies and-
• who is directly employed by the • who is employed by or through • whose services are temporarily
principal employer, contractor, lent or let on hire
but does not include apprentice and any member of the Indian naval, military or air forces; or
VARIOUS JUDGEMENTS
In ‘Director, Hassan Co-operative In ‘Employees’ State Insurance In ‘Regional Director, Employees’
Milk Producer’s Society Union Corporation V. Tata Engineering State Insurance Corporation V.
Limited V. Assistant Regional & Locomotive Co., Limited’ – Ramanuja Match Industries’ –1985
Director, Employees’ State 1976 SC it was held that an SC it was held that a partner is
Insurance Corporation’ SC 2109 it apprentice who is mere trainee not an employee.
was held that merely being for a distinct purpose is not an
employed in connection with the employee.
work of an establishment, in itself,
does not entitle a person to be an
‘employee’; he must not only be
employed in connection with the
work of the establishment but also
be shown to be employed in or
other of the three categories
mentioned in Section 2(9) of the
Act.
SPECIAL COVERAGE
The following categories are coming under the purview of the term ‘employee’-
• Canteen workers • Employees who • Workers rendering • Part time • Casual workers –
– Employees State are working in a services outside the employees ‘Regional Director,
Insurance show room or place of employed on daily Employees’ State
Corporation V. Shri sales office – establishment or rate basis – ‘Hindu Insurance
Ram Chemical ‘Bhopal Motors shop – ‘Hindu Jea Jea Band’; Corporation V.
Industries’ – (1978) Private Limited V. Band V. Regional South India Flour
(Raj); Employees’ State Director, Mill (Pvt) Limited’
Insurance Employees’ State –1986 SC;
Corporation’ – Insurance
(1982) (MP); Corporation’ –
1986;
Family
Section 2(11) defines the term ‘family’ as all or any of the following relatives of an insured person-
• a spouse; • a minor legitimate or adopted • a child who is wholly dependent

child dependent upon the insured on the earnings of the insured
person; person and who is
o receiving education, till he or she
attains the age of 21 years;
o an unmarried daughter;
• a child who is infirm by reason of • dependent parents, whose income • in case the insured person is
any physical or mental from all sources does not exceed unmarried and his or her parents
abnormality or injury and is such income as may be prescribed are not alive, a minor brother or
wholly dependent on the earnings by the Central Government; sister wholly dependent upon the
of the insured person, so long as earnings of the insured person.
the infirmity continues;
IMMEDIATE EMPLOYER
Section 2(13) defines the terms of the whole or any part of any and includes a person by whom the
‘immediate employer’ in relation work which is ordinarily part of services of an employee who has
to employees employed by or the work of the factory or entered into a contract of service
through him, as a person who has establishment of the principal with him are temporarily lent on
undertaken the execution, on the employer or is preliminary to the hire to the principal employer and
premises of a factory or an work carried on in, or incidental to includes a contractor.
establishment to which this Act the purpose of, any such factory or
applies or under the supervision of establishment,
the principal employer or his
agent,
JUDGEMENT

In ‘Employees’ State Insurance Corporation V. T. Shankar Singh T. Byali’ – (1988) 92 FJR 645 (Kar) it was
held that a person will be the immediate employer and not the principal employer even if the employees have
been employed by him, if he supplied services to a factory or establishment.
INSURED PERSON
Section 2(14) defines the term in respect of whom contributions and who is by reason thereof,
‘insured person’ as a person who is are or were payable under the Act entitled to any of the benefits
or was an employee provided by this Act.
PERMANENT PARTIAL DISABLEMENT
Disablement of a as reduces the earning at the time of the accident Every injury specified in
permanent nature, capacity of an employee resulting in the Part II of the Second
in every employment disablement. Schedule shall be deemed
which he was capable of to result in permanent
working partial disablement.
PERMANENT TOTAL DISABLEMENT
Disablement of a for all work which he The permanent total where the aggregate
permanent nature as was capable of disablement shall be percentage of the loss of
incapacitates an performing at the time of deemed to result from earning capacity, as
employee the accident in such every injury specified in specified in the said Part
disablement. Part I of the Second II against those injuries,
Schedule or from any amounts to 100% or
combination of injuries more.
specified in Part II
thereof
SEASONAL FACTORY
A factory which is exclusively Cotton ginning, cotton or jute and includes a factory which is
engaged in pressing, decortications of engaged for a period not exceeding
groundnuts, the manufacture of 7 months in a year.
coffee, indigo, lac, rubber, sugar
(including gur) or tea or any
related manufacturing process
TEMPORARY DISABLEMENT
Section 2(21) defines the resulting from an as a result of such injury, which he was doing prior
term ‘temporary employment which temporarily incapable of to or at the time of the
disablement’ as a requires medical doing the work injury.
condition treatment and renders an
employee,

WAGES
Section 2(22) defines the if the terms of the and includes any paid at intervals not
term ‘wages’ as all contract of employment, payment to an employee exceeding two months,
remuneration paid or express or implied, were in respect of any period
payable in cash to an fulfilled of authorized leave, lock
employee, out, strike which is not
illegal or lay-off and
other additional
remuneration, if any,
but not include- In ‘Regional Director, Employees’ State Insurance

Corporation’ – 1994 LLR 1 (SC) it was held that
• any contribution paid by the employer to any bonus or ex-gratia amount is not ‘wages’.
pension fund or provident fund, or under this Act;
• any travelling allowance or the value of any The following are treated as wages-
travelling concession;
• any sum paid to the person employed to defray • LIC Premium subsidy;
special expenses entailed on him by the nature of his • House rent allowance, heat, gas and dust allowance
employment; or and incentive allowance;
• any gratuity payable on discharge • Incentive bonus;
• Over time allowance;
EMPLOYEES’ STATE INSURANCE INCORPORATION
Section 3 provides for the establishment of The Corporation is a body corporate having perpetual
Employees’ State Insurance Corporation with effect succession and a common seal and shall by
from 01.10.1948. the said name sue and be sued.
It comprises members representing vital interest The Corporation is headed by the Union Minister of
groups, including, employees, employers, the Central Labour, as its Chairman, whereas the Director
and State Government, representatives of Parliament General, appointed by the Central Government
and medical profession. functions as its Chief Executive Officer.
The broad-based corporate body is, primarily, A Standing Committee, constituted from amongst the
responsible for coordinated policy planning and members of the Corporation, acts as an Executive
decision making for growth, development and Body.
efficacy of the scheme.
The Medical Benefit Council, constituted by the The Corporation, with its Central Headquarters at
Central Government, is yet another Statutory Body New Delhi, operates through a network of 63
that advises the Corporation on matters related to Regional and Sub- Regional located in various States.
effective delivery of medical services to the
Beneficiary Population.
The administration of Medical Benefit is taken care The Corporation has taken over the administration of
of by the respective State Government except in case 36 ESI Hospitals in various States for developing
of Delhi and Noida/Greater Noida area in Uttar them as ESIC Model Hospitals.
Pradesh where the Corporation administers medical
facilities directly.

Section 3 provides for the establishment of The Corporation is a body corporate having perpetual
Employees’ State Insurance Corporation with effect succession and a common seal and shall by the said
from 01.10.1948. name sue and be sued.
CONSTITUTION OF CORPORATION
Section 4 provides that Three members of the Section 6 provides for the All orders and decisions
the Corporation shall Parliament and the eligibility for re- of the Corporation shall
consist of a Chairman, a Director General of the nomination or re- be authenticated by the
Vice Chairman and other Corporation are its ex- election. signature of the Director
members representing the officio members. Section General.
interests of employers, 5 provides for the term of
employees, state office of members of
governments, union Corporation.
territories and medical
professions.
REGIONAL BOARDS
Section 25 provides that Regional Boards, Local in such areas and in such as may be provided by
the Corporation may Committees and Regional manner and delegate to the regulations.
appoint and Local Medical them such powers and
Benefit Councils functions,
OTHER BODIES OF CORPORATION
STANDING COMMITTEE
Section 8 of the Act provides for the constitution of Standing Committee which shall be constituted form
among its members consisting of-
• a Chairman; • three members of the • three members of the Corporation

Corporation; representing such three State
Governments;
• eight members elected by • three members from among the • three members from among the
Corporation – members of the Corporation members of the Corporation
representing employers; representing employees;
• one member from among the • one member from among the • the Director General of the
members of the Corporation members of the Corporation Corporation, ex-officio.
representing medical profession; elected by Parliament.
and
TERM OF OFFICE
Section 9 provides that the term of office of a A member of the Standing Committee shall cease to
member of the Standing Committee shall be 2 years hold office when he ceases to be a member of the
from the date on which his election is notified. Corporation.

POWERS OF THE STANDING COMMITTEE
Section 18 provides that and may exercise any of The Standing Committee The Standing Committee
subject to the general the powers and perform shall submit for the may, in its discretion,
superintendence and any of the functions of consideration and submit any other case or
control of the the Corporation. decision of the matter for the decision of
Corporation, the Standing Corporation all such the Corporation.
Committee shall cases and matters as may
administer the affairs of be specified in the
the Corporation regulations made in this
behalf.
MEETINGS OF STANDING COMMITTEE, CORPORATION AND MEDICAL BENEFIT

COUNCIL
Section 20 of the Act provides that and shall observe such rules or at their meetings as may be
the Standing Committee shall meet procedure in regard to transaction specified in the regulations made
at such times and places of business in this behalf.
SUPERSESSION OF THE CORPORATION AND STANDING COMMITTEE
Section 21 of the Act in performing the duties Before issuing a of the Standing
provides that if in the imposed on it by or under notification the Standing Committee. On such
opinion of the Central this Act or abuses its Committee shall be given superseding all the
Government, the powers, that Government a reasonable opportunity members shall be deemed
Corporation or the may, by notification in to show cause why it to vacate their office. A
Standing Committee the Official Gazette, should not be superseded new Standing Committee
persistently makes supersede the Standing and shall consider the shall be immediately
default Committee in explanations and constituted.
consultation with the objections, if any,
Standing Committee.
MEDICAL BENEFIT COUNCIL

Section 10 provides for the constitution of Medical Benefit Council consisting of-
• the Director General of ESI, ex-officio – Chairman; • the Director General, Health Services, ex-officio –
Co-Chairman;
• the Medical Commissioner of the Corporation – ex- • one member each representing each state other than
officio; Union territories;
• three members representing employers; • three members representing employees;
• three members representing the medical profession; among them one shall be a woman.
TERM OF OFFICE
The term of the office of the members of Medical shall be 4 years from the date on which the
Benefit Council (last three categories) appointment is notified.

DUTIES OF MEDICAL BENEFIT COUNCIL

Section 22 provides the duties of the Medical Benefit Council as to-
• advise the Corporation and the • have such powers and duties of • perform such other duties in
Standing Committee on matters investigation as may be prescribed connection with the medical
relating to the administration of in relation to complaints against treatment and attendance as may
medical benefit, the certification medical practitioners in connection be specified in the regulations.
for purposes of the grant of with the medical treatment and
benefits and other connected attendance; and
matters;
DISQUALIFICATION
Section 13 provides that a person shall be disqualified as a member of the Corporation, the Standing
Committee or the Medical Benefit Council-
• if he is declared to be of • if he is an undischarged • if he has directly or • if before or after

unsound mind by a insolvent; or indirectly by himself or commencement of this
competent court; or by his partner any interest Act, he has been
in a subsisting contract convicted of an offence
with, or any work being involving moral
done for, the Corporation turpitude.
except as a medical
practitioner or as a share
holder of a company; or
RESIGNATION
Section 11 provides that a member of the by notice in writing to the Central Government and
Corporation, the Standing Committee or the Medical his seat fall vacant on the acceptance of the
Benefit Council may resign his office resignation by Government.
CESSATION
Section 12 provides that a member of the The Corporation, the Standing Committee or the
Corporation, the Standing Committee or the Medical Medical Benefit Council may restore the membership
Benefit Council shall cease to be a member if he fails subject to the rules made by the Government.
to attend three consecutive meeting.
REGISTRATION OF EMPLOYEES
Every employee is to register himself under the Registration is the process of obtaining and recording
provisions of the Act. information about his employment which is insurable
employment.
This process also identifies to provide the benefits The employee is required to give his details and his
available under the Act that are related to the family details to his employer.
contributions paid by the employer on behalf of
insured employees.
A family photo is also to be provided so that the Registration is the process of obtaining and recording

employer can register the employee. information about the entry of an employee into
‘insurable employment’, for the purpose of his
identification under the Act.
Registration of employee is the process of At the time of joining the insurable employment, an
identification to provide the benefits under the Act employee is required to provide his and his family
which are related to the contributions paid by the details to the employer along with a family photo so
employer on behalf of each of the insured persons. that the employer can register the employee online.
This exercise of registering an employee has to be a The insurance number generated on the first occasion
onetime exercise in life time of an employee. of registration is to be used throughout his life time
irrespective of change of employment including
change of place.
EMPLOYEES’ STATE INSURANCE FUND
Section 26 of the Act provides for All contributions paid under this The grants, donations and gifts
the creation of Employees’ State Act and all other moneys received received from the Central
Insurance Fund held and on behalf of the corporation shall Government or any State
administered by the Corporation. be paid into this fund. Government, local authority or any
individual or body whether
incorporated or not, are also paid
into this Fund.
PURPOSES FOR WHICH THE FUND MAY BE EXPENDED
Section 28 of the Act provides the Central Government may utilize the State Insurance Fund only for the
following purposes:
• payment of benefits and provision of medical • payment of fees and allowances to members of the
treatment and attendance to insured persons and, Corporation, the Standing Committee and the
where the medical benefit is extended to their Medical Benefit Council, the Regional Boards, Local
families, the provision of such medical benefit to their Committees and Regional and Local Medical Benefit
families in accordance with the provisions of this Act Councils;
and defraying the charges and costs in connection
therewith;
• payment of salaries, leave and joining time • establishment and maintenance of hospitals,
allowances, travelling and compensatory allowances, dispensaries and other institutions and the provision
gratuities and compassionate allowances, pensions, of medical and other ancillary services for the benefit
contributions to provident or other benefit fund of of insured persons and, where the medical benefit is
officers and servants of the Corporation and meeting extended to their families;
the expenditure in respect of offices and other
services set up for the purpose of giving effect to the
provisions of this Act;
• payment of contributions to any State Government, • defraying the cost (including all expenses) of
local authority or any private body or individual, auditing the accounts of the Corporation and of the
towards the cost of medical treatment and attendance valuation of its assets and liabilities;
provided to insured persons and, where the medical
benefit is extended to their families, including the
cost of any building and equipment, in accordance

with any agreement entered into by the Corporation;
• defraying the cost (including all expenses) of the • payment of any sums under any contract entered
Employees’ Insurance Courts set up under this Act; into for the purpose of this Act by the Corporation or
the Standing Committee or by any officer duly
authorized by the Corporation or the Standing
Committee in that behalf;
• defraying the cost and other charges of instituting or • defraying expenditure, within the limits prescribed,
defending any civil or criminal proceedings arising on measures for the improvement of the health,
out of any action taken under this Act; welfare of insured persons and for the rehabilitation
and re-employment of insured persons who have been
disabled or injured; and
• such other purposes as may be authorized by the Corporation with the previous approval of the Central
Government.
CONTRIBUTIONS
Employees earning upto Rs.176/- a day are exempted from payment of their share of contribution. The State
Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per
capita ceiling of Rs. 1500/- per Insured Person per annum.
The contribution payable one is the contribution of The present rate The contribution shall be
under this Act is of two the employer and the contribution is 3.25% and paid in a bank duly
types – other is the contribution 0.75% of workers’ wages authorized corporation
of the employee which is by employers and within 15 DAYS of the
recovered from his wages employees respectively. last day of the calendar
and remitted to the Fund. month in which the
contribution falls due for
any wage period.
The employer is required Through this, the The total amount of The contributions can
to file monthly employer has to file contribution, both by the also be paid through SBI
contributions online employee wise number of employer and the internet banking.
through ESIC portal on a days for which wages employee, for each
monthly basis in respect paid and the amount of month is to be deposited
of all its employees after the wages paid in any branch of SBI in
duly registering them. respectively to ascertain cash or by cheque or
the amount of demand draft on
contributions payable. generation of such a
challan through ESIC
portal using credentials.
Contribution Period 1st April to 30th Sept. Cash Benefit Period 1st Jan of the following
year to 30th June
1st Oct to 31st March of 1st July to 31st
the year following. December.

PRINCIPAL EMPLOYER TO PAY CONTRIBUTION IN THE FIRST INSTANCE
Section 40 (1) provides that the principal employer Section 40(4) provides that any sum deducted by the
shall pay in respect of all employer, whether directly principal employer from wages shall be deemed to
employed by him or by or through an immediate have been entrusted to him by the employee for the
employer, both the employer’s contribution and the purpose of paying the contribution in respect of
employee’s contribution. which it was deducted. The principal employer shall
bear the expenses of remitting the contributions to the
corporation.
RECOVERY OF CONTRIBUTION FROM IMMEDIATE EMPLOYER
Section 41 provides that a shall be entitled to either by deduction from The immediate employer
principal employer, who recover the amount of the any amount payable to shall maintain a register
has paid contribution in contribution so paid from him by the principal of employees employed
respect of an employee the immediate employer, employer under any by or through him and
employed through an contract or as a debt submit the same to the
immediate employer, payable by the immediate principal employer before
employer. the settlement of any
amount payable by him.
METHOD OF PAYMENT OF CONTRIBUTION
Section 43 provides that the Corporation may make regulations for payment and collection of contributions
payable. Such regulations may provide for-
• the manner and time of payment of contributions; • the payment of contributions by means of adhesive
or other stamps affixed to or impressed upon books,
card or otherwise and regulating the manner, times
and conditions, in, at and under which, such stamps
are to be affixed or impressed;
• the date of which evidence of contributions have • the entry in or upon books or cards of particulars of
been paid is to be received by the Corporation; contributions paid and benefits distributed in the case
of the insured persons to whom such books or cards
relate; and
• the issue, sale, custody, production, inspection and delivery of books or card and the replacement of books or
cards which have been lost, destroyed or defaced.
RECOVERY OF CONTRIBUTIONS
Section 45B provides that any Section 45C provides that the The attachment shall first be
contribution payable under this authorized officer may issue effected against the properties of
Act may be recovered as an arrear certificate to Recovery Officer, the factory or the establishment
of land revenue. who in turn proceed to recover the and such attachment and sale is
amount by one or more of the insufficient for recovering the
modes mentioned below- whole of the amount of arrears, the

• attachment and sale of moveable Recovery Officer may take such

or immovable property of the proceedings against the property of
factory or establishment or, as the the employer.
case may be, the principal, or
immediate employer;
• arrest of the employer and his
detention in prison;
• approving a receiver for the
management of the movable or
immovable properties of the
factory or establishment or, as the
case may be, the employer.
BENEFITS
Section 46 provides that the insured persons , their dependents shall be entitled to the following benefits-
• periodical payments to any insured person in case of • periodical payments to an insured woman in case of
his sickness; confinement or mis-carriage or sickness arising out of
the pregnancy, confinement, premature birth of child
or miscarriage;
• periodical payments to an insured person suffering • periodical payments to such dependants of an

from a disablement as a result of an employment insured person who dies as a result of an employment
injury sustained as an employee; injury sustained as an employee;
• medical treatment for and attendance on insured • payment to the eldest surviving member of the
persons; family of an insured person, who has died, towards
the expenditure on the funeral of the deceased insured
person; if the injured person at the time of his death
does not have a family, the funeral payment will be
paid to the person who actually incurs the
expenditure.
The amount of such payment shall not exceed such The claim for such payments shall be made within 3
amount as may be prescribed by the Central months of the death of the insured person or within
Government. such extended period as the Corporation allow in this
behalf.
BAR AGAINST RECEIVING COMPENSATION UNDER ANY OTHER LAW
Section 53 provides that an insured whether from the employer or in respect of an employment injury
person or his dependants shall not from any other person, any sustained by the insured person as
be entitled to receive or recover, compensation or damages under an employee.
the Workmen Compensation Act,
1923 or any other law for the time
being in force or otherwise
MEDICAL BENEFIT
Section 56 provides that Such medical benefit A person shall be entitled which he is qualified to
an insured person or a may be given either in to medical benefit during claim sickness benefit or
member of his family the form of out-patient any period for which maternity benefit or is in
whose condition requires treatment and attendance contributions are payable receipt of such
medical treatment and in a hospital or in respect of him or disablement benefit as
attendance shall be dispensary, clinic or other does not disentitle him to
entitled to receive institution or by visits to medical benefit under the
medical benefits. the home of the insured regulations.
person or treatment as in-
patient in a hospital or
other institution.
ESTABLISHMENT OF HOSPITAL BY CORPORATION
Section 59 provides that the Corporation may, with Such hospitals, dispensaries and other medical and
the approval of the State Government, establish and surgical services as it may think fit for the benefit of
maintain in a State insured persons and their families.
BENEFITS NOT ASSIGNABLE
Section 60 provides that the right to receive any shall not be transferable or assignable.
payment or any benefit under this Act
BENEFITS NOT TO BE COMBINED
Section 65 provides that an insured person shall not be entitled to receive for the same period-
• both sickness benefit and • both sickness benefit and • both maternity benefit and
maternity benefit; or disablement benefit for temporary disablement benefit for temporary
disablement; or disablement.
Where a person is entitled to more than one of the benefits he shall be entitled to choose which benefit
he shall receive.
REPAYMENT OF BENEFIT IMPROPERLY RECEIVED
Section 70 provides that he shall be liable to the or in the case of his death The amount recoverable
where any person has Corporation the value of his representative shall be may be recovered as if it
received any benefit or the benefit or the amount liable to repay the same were an arrear of land
payment under this Act of such payment, from the assets of the revenue or by the
when he is now lawfully deceased, if any, in his Recovery Officer.
entitled to receive the hands.
same,
EMPLOYER NOT TO REDUCE WAGES ETC.,
Section 72 provides that no employer by reason only or except as provided by the regulations discontinue
of his liability for any contributions payable under or reduce benefits payable to him under the
this Act shall, directly or indirectly reduce the wages conditions of his service, which are similar to the
of any employee, benefits conferred by this Act.

EMPLOYER NOT TO DISMISS OR PUNISH THE EMPLOYEE DURING SICKNESS ETC.,
Section 73 provides that no employee shall dismiss, which he is in receipt of disablement benefit for
discharge or reduce or otherwise punish an employee temporary disablement or is under medical treatment
during the period the employee is in receipt of for sickness or is absent from work as a result of
sickness benefit or maternity benefit, nor shall be, illness duly certified in accordance with the regulars
except as provided under the regulations, dismiss, to arise out of the pregnancy or confinement
discharge or reduce or otherwise punish an employee rendering the employee unfit for work.
during the period
ADJUDICATION OF DISPUTES AND CLAIMS

Section 74 provides that the State Government shall constitute an ESI Court for such local area as may be
specified in the notification. Section 75 provides that ESI Court may decide any question or dispute arises as
to-
• whether any person is an • the rate of wages or average daily • the rate of contribution payable
employee within the meaning of wages of an employee for the by a principal employer in respect
this Act or whether he is liable to purposes of this Act; or of any employee;
pay the employee’s contribution;
or
• the person who is or was the • the right of any person to any • any direction issued by the
principal employer in respect of benefit and as to the amount and Corporation on a review of any
any employee; or duration thereof; or payment of dependants’ benefit; or
• any other matter which is in • a principal employer and the • a principal employer and an
dispute between- Corporation; or immediate employer; or
• a person and the Corporation; or • an employee and a principal or immediate

employer,
TYPES OF CLAIMS
The following claims shall be decided by ESI Court-
• claim for the recovery of contributions from the • claim by a principal employer to recover
principal employer; contributions from any immediate employer;
• claim against a principal employer; • claim for the recovery of the value or amount of the
benefits received by a person when he is not lawfully
entitled thereto; and
• any claim for the recovery of any benefit admissible under the Act.
An appeal shall lie to the High Court from an order of ESI Court if it involves a substantial question of law.
The appeal shall be filed within 60 days from the date of the order of ESI Court.

JURISDICTION OF CIVIL COURT
Section 75(3) provides that no which is to be decided by a In ‘ESI Corporation V. Jalandhar

Civil Court have jurisdiction to medical board or An medical Gymkhana Club’- 1972 (P&H) it
decide or deal with any question or appeal tribunal or ESI Court. was held that a civil court cannot
dispute as aforesaid or to determine whether this Act is
adjudicate on any liability applicable to an establishment or
not.
PENAL PROVISIONS UNDER SECTIONS 84 TO 86 OF ESI ACT, 1948:
Sections 84 to 86 of the Act provide for penalties for certain offences. These penalties were substantially
increased by the Employee’s State Insurance (Amendment) Act, 1975. The amended Act introduced three new
sections namely, Section 85-A, 85-B and 85-C.
The following are the penalties as per the Act:
Section - 84:
This section deals with penalties Such Act is an offence punishable It is also provided under this
for making wrong / false under Act with imprisonment for a section that if an insured person is
statements made by the Insured term which may extend to six convicted by the Court for an
Persons with a view to take any months or with fine which may offence committed by him under
benefit which is not admissible to extend to Two thousand rupees or this section, he shall not be entitled
him under the Act. with both. to any cash benefits available
under the Act for such a period as
may be prescribed by the Central
Government.
Section - 85:
This section deals with penalties for non – compliance with the various provisions of the ESI Act and
Regulations made there under. Such noncompliance with any of the provisions of the Act constitutes an
offence committed by the employer of a covered Factory / Establishment which is punishable under Section
85(a) to 85(g) of the Act.
Section - 85(a): Envisages that if an employer fails to Section 85(b) to 85(g): Says that if an employer
pay any contribution payable under the Act within the commits an offence under this section for
prescribed time-limit, he thus commits an offence u/s noncompliance with any other provisions of the Act,
85(a) of the Act, which is punishable with which is punishable with imprisonment for a term
imprisonment for a term which may extend to three which may extends to One year or with fine up to
years u/s 85(i) of the Act, provided it shall not be less Four thousand rupees or with both.
than One year and fine of Ten thousand rupees u/s
85(i) (a) of the Act where employees’ share of
contribution is deducted by the employer from their
wages but not paid. In other case where term of
imprisonment shall not be less than 6 months and fine
of Five thousand rupees u/s 85(i) (b).

Section 85 - A:
This section deals with enhanced punishment in It is provided that if such subsequent offence is for
certain cases after previous conviction. If any failure to pay contribution payable under the Act, the
employer convicted by a Court for an offence employer shall, for every such subsequent offence, be
punishable under the Act, committing the same punished with imprisonment for a term which may
offence, shall, for every such subsequent offence, be extend to Five years but which shall not be less than
punished with imprisonment for a term which may Two years and shall be liable to pay fine of Twenty
extend to Two years and with fine of Five thousand Five Thousand rupees.
rupees.
Section 85 - B:
Provides that the corporation may recover damages within the specified time-limit or pays contribution
from the employer by way of penalty under this belatedly provided that before recovering such
section if any employer fails to pay contribution damages, the employer shall be given a reasonable
payable under the Act opportunity of being heard.
The amount of damages may not exceed the amount There is also a provision to reduce or waive damages
of contribution paid / payable. recoverable under this section in respect of a
Factory/Establishment which is a Sick Industrial Unit
and in respect of which Rehabilitation Scheme has
been sanctioned by BIFR, under Regulation 31-C, of
ESI (General) Regulations, 1950.
a. In case of change of b. In other cases, depending on c. In exceptional hard cases, the

Management including transfer of merits, damages levied/leviable damages levied/leviable can be
undertaking to worker’s Co- can be waived upto 50%. waived either partially/totally.
operative or in case of merger or
amalgamation of Sick Industrial
Unit with a healthy company,
damages levied/ leviable can be
waived completely.
Section-85-C:
Provides that where an employer is convicted for an If the employer still fails to pay the contribution and
offence of non-payment of contribution under this submit returns within the time given by the court or
Act, the Court in addition to giving any punishment within the extended time period given, the employer
by order, direct him to pay the amount of contribution is deemed to have committed a further offence and
for which he was convicted within a time period. The shall be punishable with imprisonment under Section-
Court can also extend the time given periodically. 85 and is also liable to pay a fine which may extend
to one thousand rupees for every day of default.
Section-86:
Provides that no prosecution under this Act shall be It is also provided that No Court inferior to that of a
instituted without previous sanction of the Insurance Metropolitan Magistrate or Judicial Magistrate of the
Commissioner or of such other officer of the First Class shall try any offence under this Act. And
corporation as may be authorized in this behalf by the No Court shall take cognizance of any offence under
Director General of the Corporation. this Act except on a complaint made in writing in
respect thereof.
SECTION-75: DEALS WITH PROVISIONS FOR ADJUDICATION OF DISPUTES & CLAIMS:
If any employer or employee under the Act has any subject to the condition that 50 % security deposit is
disputes/questions that may be settled by E.I. Court required to be made u/s.75 (2B) (unless it is
after adjudicating the matter if made before it, waived/reduced for the reasons recorded by the Ld.
Court).
PENAL ACTION U/S 138 OF N.I. ACT:
If employer submits a cheque to the corporation He thereby commits an offence under this section and
towards payment of contribution, interest, damages or shall be punished with imprisonment for a term upto
any other amount due, which is bounced subsequently One year or with fine which may extend to twice the
by the Bank for the reasons of Insufficient Fund amount of cheque or with both.
PENAL ACTION U/S 405/406/409 OF I.P.C
If an employer deducts employees’ share of he thereby commits an offence of criminal Breach of

contribution from their wages but does not pay the Trust which is punishable under this section with
said contribution, imprisonment which may extend to 3 years or with
fine or with both.

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BUSINESS LAWS AND ETHICS

Module No. Module Description Weight

Dear Student for Amendment Please Check Link And Join

18.raghav@gmail.com For Any Support Please Call 9560548299, 8178069846

MUTUAL RIGHTS & DUTIES

1. Interpretation.—In this Schedule, unless the context otherwise requires,—

1. Interpretation.—In this Schedule, unless the context otherwise requires,—

1. Interpretation.— (1) In this Schedule, unless the context otherwise requires,—

FACTORIES ACT, 1948 w.e.f. 1.4.1949

CONCEPT 1. MEANING OF FACTORY Section 2(m)

“Factory” means any premises including the precincts thereof—

but does not include

A mine A mobile unit Railway A hotel A restaurant Eating place.

Electronic Data Processing or Computer unit not a Factory

State Amendments: Certain State Governments have increased limit of 10 workers to 20

CONCEPT 2. MEANING OF MANUFACTURING PROCESS Section 2(k)

“Manufacturing process” means any process for—

CONCEPT 3. MEANING OF OCCUPIER Section 2(n)

Any one of the individual the person or persons

CONCEPT 4. MEANING OF WORKER Section 2(l = el)

✓ “Worker” means a person employed,

CONCEPT 5. MULTIPLE UNITS AND MULTIPLE FACTORIES

✓ The State Government may,

✓ shall be treated as separate factories or

CONCEPT 6. APPROVAL LICENSING AND REGISTRATION OF FACTORIES

The submission of The permission in The submission of The registration and

CONCEPT 7. NOTICE BY OCCUPIER

15 Days Advance Notice at the time of start containing following particulars:

30 Days advance Notice in case of Non working factory becomes working

7 days’ notice in case of New Manager

(2) the matters to which such duty extends, shall include—

CONCEPT 10. POWERS OF INSPECTORS

CONCEPT 11. CERTIFYING SURGEONS

1. The State Government may appoint qualified medical practitioners to be certifying

Certificates of (1) It shall be issued by Certifying surgeon.

CONCEPT 12. HEALTH RELATED MEASURES

Overcrowding (1) No room in any factory shall be overcrowded.

CONCEPT 13. WELFARE RELATED MEASURES

CONCEPT 14. SAFETY RELATED MEASURES

Major (1) Fencing of machinery;

(12) Excessive weights;

Hazardous (1) State Government shall appoint a Site Appraisal Committee.

(3) It will make its recommendation to the State Government within 90

Safety ✓ Occupier shall set up a Safety Committee

CONCEPT 15. WORKING HOURS OF ADULTS

Weekly hours Maximum 48 Hours per week.

Weekly 1. First fay of the week shall be holiday.

Daily working 9 hours with 1 hour break.

CONCEPT 16. EMPLOYMENT OF WOMEN

Working Shall be same as male.

CONCEPT 17. EMPLOYMENT OF YOUNG PERSONS

Prohibition of If age is less than 14 years, no work allowed.

Certificates of (4) It shall be issued by Certifying surgeon.

Prohibited hours for female child

CONCEPT 18. ANNUAL LEAVE WITH WAGES

Minimum 240 days per year

Leave carry Maximum 30 for adult, 40 for child.

CONCEPT 19. Obligations and Rights of workers

Obligations (1) No willfully interfere with or misuse any appliance, convenience or

CONCEPT 20. Major terms

Adult Completed 18 years of age.

factory to provide more facilities, equipment and arrangements in the factory. He

Process undertaken at electricity generating station, Sub-station is transferring and transmitting