FACTORIES ACT, 1948
- It seeks for consolidation and amendment of the law regulating labour in factories.
- A social legislation to provide for occupational safety, health and welfare of workers at work places.
- It applies to factories (Including department & branches) covered under the Factories Act, 1948.
The Act is applicable to following premises, which are treated as Factory under the Act:
- The premises in which ten or more than ten workers are employed /were employed on any day of the preceding twelve months and in that premises, manufacturing process is being carried out with the aid of power
- The premises in which twenty or more than twenty workers are employed /were employed on any day of the preceding twelve months and in that premises, manufacturing process is being carried out without the aid of power.
Occupier is the person who has ultimate control over the affairs of the factory. Under the Factories Act, he is the person who is responsible to look after health, safety and welfare of the workers in the Factory and maintenance of the Plant.
He is a person who is employed in the company either directly or by or through any agency or through any contractor. He may or may not be getting any remuneration.
When we talk about Demerger (under section 230-231 of Companies Act, 2013) under Factories Act, there are three parties involved in a transaction i.e.,
- Demerged Company (Seller Company)
- Resulting Company (Buyer Company)
- Employees(Workers) which will get transferred in course of demerger
Let us discuss about regulation parties have to comply with while going for any Demerger.
Notice to Chief Inspector by occupier:
Resulting Company has to appoint an occupier for the factory premises acquired by it from Demerged Company after execution of Demerger. The person to be appointed as Occupier is required to send intimation Notice to Chief Inspector before 15 days of his occupying the Factory.
Amendment of licence
Transfer of factory by way of Demerger would result in change of management/constitution/occupier of the said factory. Licencee is required to get his/its licence transferred in case of change in the management/constitution/occupier, and get it amended in case of change in the limits specified in the Licence with regard to no. of workers or power.
So the Resulting company is required to get the licence transferred in its name from the name of Demerged Company with respect to each & every factory of the Demerged Company acquired in the course Demerger and to get it amended in case of change in any of the limits specified in the licence which requires higher permission.
Maharashtra Factory Rules, 1963 provide for provisions relating to amendment of Licence with respect to change in name or site of the Factory or change in the limits specified in the Licence with regard to horse power or number of persons.
Accordingly, Resulting Company is required to submit application to Chief Inspector or Deputy Chief Inspector stating nature of amendment and reasons thereof.
Date of Registration
The Resulting company will require registration from the effective date, i.e after the scheme is approved.
After Demerger, the Resulting Company should keep in mind whether there is any requirement for appointment of Safety officers/welfare officers or providing of facilities like Canteens/rest rooms/lunch rooms, as these requirements are to be complied based on no. of workers in the factory and this number may cross the prescribed limit under the Factories Act on transfer of workers consequent to the Demerger.