Unit 3: The Factories Act, 1948

The Factories Act, 1948

Objective: To regulate the working conditions, health, safety, welfare, and working hours of workers in factories.

Applicability

• Applies to factories employing:
• 10 or more workers with power
• 20 or more workers without power

Key Provisions

The Factories (Amendment) Bill, 2016

Introduced to modernize and relax certain provisions of the Factories Act, 1948 to promote ease of doing business while ensuring worker safety.

Key Highlights

Note: The Bill was introduced but not passed, so these changes were proposed, not enforced nationally unless states adopted them individually.

Shops and Establishments Act, 1948

• Objective: To regulate conditions of work and employment in shops, commercial establishments, restaurants, theatres, etc.
• Applicability: Varies state-wise. Each state has its own version of this Act.

Key Provisions

 The Payment of Wages Act, 1936

• Objective: To ensure regular and timely payment of wages to employees and prevent unauthorized deductions.
• Applicability: Initially applied to workers earning less than ₹24,000/month (subject to change by notification).

Key Provisions

Payment of Wages (Amendment) Act, 2020

Incorporated under the Code on Wages, 2019 (came into force in 2020)

Key Changes

These Acts are foundational pillars of Indian labor law, focusing on worker protection, safety, and welfare, while balancing the needs of business flexibility and ease of compliance. The amendments aim to modernize outdated provisions and make the legal framework more relevant in the changing industrial environment.

The Payment of Wages Act, 1936 (with Amendment 2020)

• Objective:To regulate the timely payment of wages to employees and prevent unauthorized deductions by employers.
• Applicability: Applies to employees earning below a wage ceiling (₹24,000/month earlier, now removed under 2020 reforms). Covers industrial and non-industrial establishments.

Key Provisions:

Amendment under Code on Wages, 2019 (effective from 2020)

The Workmen’s Compensation Act, 1923

(Now called: The Employee’s Compensation Act)

• Objective: To provide financial compensation to workers or their dependents in case of injury, disability, or death caused by accidents during the course of employment.
• Applicability: Applies to workers in factories, mines, construction, transport, etc.

Not applicable to members of the armed forces or employees covered under ESI Act.

🔹 Key Provisions:

Amendments

• In 2017, the wage ceiling was raised from ₹8,000 to ₹15,000/month for calculation.
• Enhanced penalties and interest for delayed payments.
• Insurance requirement introduced for employers in hazardous industries.

The Industrial Disputes Act, 1947

• Objective: To provide mechanism for investigation and settlement of industrial disputes and to promote industrial peace.
• Applicability: Applies to all industries, factories, and businesses. Covers both workmen and employers.

🔹 Key Provisions

Recent Developments: Under the Industrial Relations Code, 2020 (notified but not yet enforced in all states as of 2024):

These Acts form the core framework for labor welfare and dispute resolution in India. While the original Acts laid the foundation, the 2020 labor reforms aim to simplify, consolidate, and modernize these laws to suit present-day industry needs and promote ease of doing business while ensuring worker rights.