CMA Intermediate · Business Laws and Ethics
Factories Act, 1948: formula sheet
Key formulas
- Appointment of Inspector-cum-Facilitators
- Section 34(1): appropriate Government, by notification, appoints; each officer acts within the jurisdiction specified
- Appointment is always by notification.
- Inspection scheme
- Section 34(3): web-based inspection, calling of information electronically, randomised selection of establishment and officer
- Scheme is laid down by the appropriate Government by notification.
- Scheme design factors
- Section 34(4): (a) unique numbers; (b) timely uploading of reports; (c) special inspections; (d) nature of work and workplace
- The unique number of an establishment equals its registration number under section 3.
- Chief and senior officers
- Section 34(5)-(7): Chief Inspector-cum-Facilitator; Additional, Joint, Deputy Chiefs exercise Chief's powers as notified, plus Inspector-cum-Facilitator powers in their local limits
- A Chief may be appointed for a State, several States or the whole country.
- Disqualification
- Section 34(8): no person who is directly or indirectly interested in a workplace, work activity, process, business, plant or machinery connected with it may be appointed or continue in office
- Ensures independence.
- Status
- Section 34(11): deemed public servant under section 21 of the Indian Penal Code; officially subordinate to authority specified by the appropriate Government
- Applies to all officers appointed under section 34.
- Powers of Inspector-cum-Facilitator
- Section 35(1)(i)-(xiv): enter, inspect, inquire, require documents, search or seize, take samples, issue show cause notice, prosecute
- Powers are subject to any rules made.
- Duty to produce documents
- Section 35(2): a person required to produce a document or give information is legally bound to do so (IPC sections 175 and 176)
- Refusal has legal consequences.
- Search and seizure procedure
- Section 35(3): Code of Criminal Procedure, 1973 applies so far as may be, as to a search under a warrant under its section 94
- Procedure follows the criminal procedure law.
- Ventilation and temperature duty (Factories Act, s.13(1))
- Adequate ventilation by circulation of fresh air + temperature giving reasonable comfort and preventing injury to health
- Applies to every workroom. Walls and roofs must keep temperature as low as practicable.
- High temperature measures (s.13(1)(ii))
- Separate the process from the workroom, insulate hot parts, or use other effective means
- Only 'adequate measures as are practicable' are required.
- Standards and records (s.13(2))
- State Government prescribes standards; may direct measuring instruments and records
- The State, not the Centre, prescribes under the Factories Act.
- Chief Inspector's order (s.13(3))
- Written order to occupier specifying measures + a date by which to carry them out
- Issued where excessively high temperatures can be reduced by suitable measures.
- Dangerous operations (Factories Act s.87)
- Serious risk of bodily injury, poisoning or disease → State Government rules
- Rules can declare the process dangerous, restrict employment of women, adolescents or children, require medical examination, and require protective equipment.
- Safety Committee (s.41G)
- Hazardous process or substances → Safety Committee, equal workers' and management representatives
- The State Government may exempt by written order, with reasons recorded.
- Dangerous operations (OSH Code s.82)
- Appropriate Government rules: specify and declare dangerous; restrict pregnant women; periodic medical examination at occupier's cost; welfare and protective equipment
- Medical examination is at the occupier's cost.
- Employer responsibility (OSH Code s.23)
- Employer maintains health, safety and working conditions as prescribed by the Central Government
- Matters include ventilation, temperature, humidity, drinking water, lighting, latrines, waste treatment.
- Disclosure for hazardous process (OSH Code s.84)
- Disclose dangers to workers, Chief Inspector-cum-Facilitator, local authority and public; lay down health and safety policy; on-site emergency plan; inform 30 days before starting a new hazardous process
- Breach of the 30-day intimation makes the licence under section 79 liable for cancellation.
- Daily limit (OSH Code, Section 25(1))
- Maximum work = 8 hours in a day
- Intervals and spread overs are as notified by the appropriate Government.
- Weekly limit (Section 26(1))
- Maximum work = 6 days in any one week
- Government may exempt workers by notification on prescribed conditions.
- Compensatory holidays (Section 26(3))
- Holidays given = holidays lost, within the month due or the 2 months immediately after
- Applies when an exemption deprives the worker of weekly holidays.
- Overtime wages (Section 27)
- Overtime pay = 2 × ordinary rate of wages × overtime hours
- Daily or weekly basis, whichever is more favourable to the worker. Worker's consent required.
- Factories Act exceptional press of work (Section 65(3))
- ≤ 12 hours a day; spread over ≤ 13 hours; ≤ 60 hours a week including overtime; overtime ≤ 7 days at a stretch; overtime ≤ 75 hours a quarter
- Conditions for exemptions under Section 65(2) of the 1948 Act.
- Factories Act weekly holiday (Section 52)
- Whole-day holiday on one of the 3 days before or after the first day of the week; no more than 10 consecutive days without a whole-day holiday
- Notice to the Inspector and a displayed notice are needed before the day.
- Qualifying days: Factories Act, 1948 (Section 79)
- Worked 240 days or more in a calendar year → leave in the next calendar year
- Lay-off days (by agreement, contract or standing orders), maternity leave up to 12 weeks and leave earned in the prior year count towards 240 days but earn no leave.
- Leave rate: Factories Act, 1948
- Adult: days worked ÷ 20. Child: days worked ÷ 15
- Fraction of half a day or more counts as one full day; less than half a day is dropped.
- Part-year joiner: Factories Act, 1948
- Entitled if worked two-thirds of the total days in the remainder of the calendar year
- Applies to a worker whose service starts other than on 1 January.
- Carry-forward: Factories Act, 1948
- Maximum 30 days (adult) or 40 days (child)
- Leave refused despite a valid application can be carried forward without limit.
- Qualifying days: OSH Code, 2020 (Section 32)
- Worked 180 days or more in the calendar year → leave in that year
- Lay-off, maternity leave and annual leave availed count towards 180 days but earn no leave.
- Leave rate: OSH Code, 2020
- Ordinary worker: days worked ÷ 20. Adolescent worker: ÷ 15. Below-ground mine worker: ÷ 15
- The text of Section 32 gives no half-day rounding rule, so do not import the 1948 Act rounding rule.
- Part-year joiner: OSH Code, 2020
- Entitled if worked one-fourth of the total days in the remainder of the calendar year
- Compare with two-thirds in the 1948 Act.
- Carry-forward and encashment: OSH Code, 2020
- Carry forward up to 30 days; encash leave exceeding 30 days; encash on demand at year end
- Leave refused on application is carried forward without limit.
- Application for leave: Factories Act, 1948
- Written notice at least 15 days before (30 days for public utility service); leave taken at most 3 times a year
- Illness leave need not meet the notice period.
- Section 127(1): general exemption
- Appropriate Government + notification + conditions + period → all or any provisions do not apply to an establishment or class
- Covers the Code, its rules and its regulations.
- Section 127(2): new factories
- State Government + public interest (economic activity and employment) + notification → exemption from date commercial production starts
- Period is specified in the notification. Earlier Factories Act notifications continue for their remaining period.
- Section 58: emergency
- Emergency + notification + conditions + specified period → provisions do not apply
- Applies to an establishment, a class of establishments or a class of contractors.
- Section 91: persons and workers
- Rules for supervisory, managerial or confidential persons; rules for workers; written order for adult workers
- Section 91(2): the appropriate Government or the Chief Inspector-cum-Facilitator may exempt adult workers by written order.
- Section 129: public institutions
- Workshop attached to an educational, training, research or information institution → exemption on conditions
- No exemption from hours of work and holidays unless an approved scheme is not less favourable than the Code.
Quick revision
- Know the definitions of factory, worker, occupier and manufacturing process word for word.
- The occupier is the person with ultimate control over the affairs of the factory.
- Learn the duties of the employer, occupier and inspector-cum-facilitator separately.
- For health and safety, group provisions into health, safety and welfare.
- Memorise the daily and weekly hour limits and interval rules exactly as in your study material.
- Remember the weekly holiday rule and the compensatory holiday concept.
- Overtime questions need the limit, the rate and the conditions stated together.
- Women and young persons have special conditions on hours and types of work.
- Annual leave depends on days worked, so check the eligibility condition in the question.
- Exemptions apply only in special cases and under stated conditions.
- In penalty questions, name the breach and state the consequence, not just the word penalty.
- Write answers in this order: rule, limit, application, conclusion.
Common mistakes
- Calling the officer only an Inspector and ignoring the facilitator role. Fix: State that the officer also supplies information and sensitises employers and workers (section 35(1)(v)).
- Writing that the Factories Act, 1948 section numbers apply. Fix: Cite the OSH Code, 2020 sections 34 and 35 for the officer.
- Mixing up the Factories Act, 1948 and the OSH Code, 2020 section numbers. Fix: Link them: section 87 is the Factories Act, section 82 is the OSH Code. Always name the Act.
- Saying the temperature must be kept low in all cases. Fix: The law requires reasonable comfort, no injury to health, and temperature kept as low as practicable in walls and roofs design.
- Paying overtime at one and a half times the wage. Fix: Section 27 says twice the rate of wages. Write 2× every time.
- Treating the 12-hour and 60-hour limits as the normal limits. Fix: Normal limit is eight hours a day under Section 25. The 12, 13, 60 and 75 figures apply only to exemptions for exceptional press of work.
- Using 240 days for OSH Code questions, or 180 for the Factories Act. Fix: Tie each number to its law: 240 with 1948 Act, 180 with OSH Code.
- Counting lay-off or maternity days as days that earn leave. Fix: They count only towards the threshold. Compute leave on days actually worked.
- Citing the Factories Act, 1948 sections as current law. Fix: Use the OSH Code sections. Mention the 1948 Act only for the saving of old notifications under section 127(2).
- Saying any exemption can be given without conditions or time limit. Fix: Always write that conditions, restrictions and a period may be specified.
Exam tips
- Write section 34 for appointment and section 35 for powers, and keep them apart.
- In MCQs, watch for options that say the Chief Inspector appoints or that inspection is always at the officer's discretion. Both are wrong.
- For a six-mark list, give at least six distinct powers from section 35(1) with one-line explanations.
- Mention the facilitation role; it is a favourite scoring point.
- For employer and occupier duties and registration, use your ICMAI material and give a clear, structured list rather than guessing section numbers.
- Always name the Act. Examiners reward the correct source, and the two Acts have different section numbers.
- Use the numbers precisely: thirty days, equal representation, occupier's cost. MCQs test these.
- For long answers, structure by sub-heading: ventilation, temperature, hazardous process, dangerous operations, welfare. Each earns step marks.