Factory License

Who Should Get A Factory Licence?

As per The Factories Act 1948, factory means

• Any manufacturing premises employing 10 or more workers with the aid of power.
• Any manufacturing premises employing 20 or more workers without the aid of power.

Documentation Required For Getting A Factory Licence

Procedure To Get A Factory Licence

Factories Act 1948 empowers the State Government to process, approve and issue factory licences to manufacturing entities. It is imperative to understand the respective factories act of your state where your factory is proposed to be situated.

• Approach the Directorate of Industrial safety of your state and make an application in Form 1.
• Most states have introduced an online application for getting a factory licence. Check the official website of the state directorate of industrial safety.
• Enter the details of the factory, the occupier (authorised signatories), the owner, and the production plan. The production plan can vary between hazardous and non-hazardous materials.
• Submit all the required documents along with the application.
• Pay the requisite fees and apply.
• The application will be scrutinised and the premises will be physically inspected by the industrial safety officers.
• The factory licence will be issued by the Joint Director of Industrial Health and Safety of your state.

Statutory Fees For Factory Licence

The statutory fees depend on the number of labourers employed during the year and the horsepower of the plant and machinery installed. The minimum fee is Rs 800 for 10 employees and can go up to Rs 432,000 based on the labourers and the horsepower of the machinery.

Apart from the above, the inspection fee for a pressure plant or water-sealed gas holder ranges from Rs 800 to Rs 8,000.

Benefits Of Getting A Factory Licence

• In principle State Government approval for manufacturing in the State.
• Detailed guidelines as per the Factories Act 1948 on handling hazardous and non-hazardous materials and equipment which ensures the safety and security of the business unit.
• Promotes equality by encouraging the participation of women in manufacturing activities.
• Acts as an enabler in availing of various government schemes.
• Protects the employees’ interests, safety, and welfare and encourages them to contribute more to the growth of the business.

Objectives Of Factory Licence

• To protect the health of the labourers by stipulating rules and regulations around cleanliness, disposal of wastes and effluents, ventilation and temperature, dust and fumes, lighting, drinking water, urinals, etc.
• To ensure the safety of the workforce handling hazardous and non-hazardous plants and machinery by providing guidelines on fire safety, maintenance of buildings, precautions against dangerous gases, excessive weights, lifting machines, chains, and ropes, etc.
• To provide a complete set of guidelines and measures for manufacturing units handling hazardous materials and processes.
• To uphold the welfare of the labourers by providing facilities for washing and drying, first-aid, canteens, shelters, and restrooms.
• To avoid exploitation by providing norms on working hours, the number of shifts, holidays, intervals for rest, employment of women, etc.
• To incorporate guidelines and procedures for employing young children in the manufacturing process.
• To impose penalties for any manufacturing unit contravening the provisions of the Factories Act 1948.

Procedure For Renewal Of Factory licence

• Submit a copy of the original licence along with duly filled Form no 2.
• Submit the changes in the production plan, usage of materials, expansion or alteration of manufacturing premises if any along with the renewal application.
• The competent authority will scrutinise the application and inspect the premises.
• The authority shall renew the licence on satisfying himself with the supporting documents and physical inspection.
• The licence can be renewed for one, five, or ten years at the option of the owner.

Important Compliances For Factory Licence

• The working hours shall be a maximum of 48 hours in a week and not exceeding 9 hours in a day. The working hours of children shall be a maximum of 4.5 hours in a day.
• There should be an interval of at least half an hour after a continuous 5-hour work window.
• The factory premises should be cleaned regularly with a disinfectant and there should not be any accretion of dirt.
• Proper and adequate measures must be taken to dispose of hazardous and non-hazardous wastes and management of dust and fumes.
• The machinery must be fenced adequately to ensure the safety of the workforce.
• All the spare parts, carriages, and lifts of the machinery shall be properly maintained and inspected at regular intervals.
• The factory shall provide a crèche facility for children below 6 years if it employs more than 30 women.
• The overtime wages shall be twice that of the actual wages.
• It is mandatory to maintain separate registers for adult and young workers in the factory.
• The factory shall file an annual return in the prescribed format.

Conclusion

Though the compliance under Factories Act 1948 can seem meticulous, it is done in the best interest of all the stakeholders of a business. The proper implementation of the Factories Act of 1948 can help in the overall improvement of manufacturing quality and improve productivity.