Suresh Pipes Pvt. Ltd (SPPL) manufactures all types of pipes which are used for residential and commercial complexes. The SPPL is registered under Factories Act, 1948. The company's plant is located in the VKI Industrial

CS Professional · Labour Laws and Practice · PYQS · December 2024
Suresh Pipes Pvt. Ltd (SPPL) manufactures all types of pipes which are used for residential and commercial complexes. The SPPL is registered under Factories Act, 1948. The company's plant is located in the VKI Industrial Area of Jaipur. The company in order to expand its production capacity, planned to construct a factory building on its the vacant land adjacent to its present plant. The company hired the services of Bharat Ram, a civil contractor, to build the factory premises. The contractor employed 20 workers on the construction site. The payment to the contractor was to be made by the SPPL in stages on the basis of the work certified by an approved civil engineer. The contractor after getting the payment of first stage of construction, disappeared and never visited the site. The workers started demanding the wages from the company. One day, an Inspector visited to the factory premises. In his inspection report, he pointed out that the establishment is not registered under the relevant Act. The company officials tried to convince the inspector that the company is already registered under the Factories Act, 1948 but the inspector remained static on his report. Anurag who is a Manager (Administration) of a newspaper titled as 'Khabar Chalisa" and resides in the locality where the SPPL company have its office. Somehow Anurag came to know that SPPL is not paying the wages to the construction workers. He thought it to get publish this news in the 'Khabar Chalisa'. However, Mahesh, the owner of the newspaper, who is a close friend to the Suresh, the Managing Director of SPPL Company advised Anurag not to get the publication of such news in the newspaper since it will affect the image of the company. But Anurag was adamant on the issue, so he decided to quit from the service of 'Khabar Chalisa'. After tendering the resignation from 'Khabar Chalisa', Anurag demanded from the newspaper owner the payment of the dues and the gratuity amount. Anurag served in the newspaper publication house for 4 years and 9 months and his last monthly drawn salary was rupees fifty thousand. However, Mahesh refused to make payment of the gratuity amount. Based on the given facts, answer the following questions: The SPPL was registered under the Factories Act, 1948 but the inspector qualified the inspection report stating therein that the company is not registered under the relevant Act. Explain the relevant provisions of the Act (in addition to the Factories Act, 1948) under which the company is required to get registered before start of the construction work? Give your answer with the decided case laws.

Answer & Explanation:

Registration of establishment Section 7(1) of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 provides that every employer shall, - in relation to an establishment to which this Act applies on its commencement, within a period of sixty days from such commencement; and in relation to any other establishment to which this Act may be applicable at any time after such commencement, within a period of sixty days from the date on which this Act becomes applicable to such establishment, make an application to the registering officer for the registration of such establishment: Provided that the registering officer may entertain any such application after the expiry of the periods aforesaid if he is satisfied that the applicant was prevented by sufficient cause from making the application within such period. Case Law The Hon'ble High Court of Orissa in the matter of Sterlite Energy Limited v. State of Orissa & Others [reported at 2011 III LLJ 349 (DB) has held that the provisions of the Factories Act, 1948 and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 ("BOCW Act") do not over-lap, holding that the BOCW Act applies to factories under construction while the Factories Act, 1948 is generally applicable to completed factories. The issue before the Supreme Court was whether the BOCW Act was applicable to those premises that are registered under the Factories Act, 1948. The Court held that the establishments/premises registered under the Factories Act, 1948, employing construction workers in the construction of factory premises were not excluded from the application of the BOCW Act in terms of the exclusion clause. The Court reasoned that an establishment/premise would become a factory under Section 2(m) of the Factories Act only when the manufacturing process as defined under Section 2(k) of the Factories Act commenced. Consequently, the provisions of the Factories Act would apply only when the manufacturing process commences, and even upon commencement of the manufacturing activity, it only covered those workers who are engaged in such manufacturing activity under the Factories Act and not construction workers. Hence, construction activities that are carried out in relation to establishments/registered premises / licensed under the Factories Act, 1948, would not attract the exclusion clause of the BOCW Act by itself. Workers carrying on such activities would be covered under the BOCW Act.

Topics: Registration and Licensing

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