Dear all,
I need guidance. We have a manufacturing plant in Vadodara, and we have obtained a Factory license with all compliance followed as per the Factory Act. Just opposite to the existing factory, we have rented a warehouse property. Please guide me on whether the rental property falls under the Shop and Establishment Act or not. I am expecting the earliest reply on this.
Thank you.
From India, Ahmedabad
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I need guidance. We have a manufacturing plant in Vadodara, and we have obtained a Factory license with all compliance followed as per the Factory Act. Just opposite to the existing factory, we have rented a warehouse property. Please guide me on whether the rental property falls under the Shop and Establishment Act or not. I am expecting the earliest reply on this.
Thank you.
From India, Ahmedabad
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Dear Suraj,
Any place or space falling outside the approved plan of the factory will not form part of the premises and precincts earmarked for the purpose of registration under the Factories Act, 1948. In such a situation, the establishment-specific law applicable to that place depends on the nature of activity carried on there only. Particularly, when the building or place just across the same street or opposite to the existing factory premises is used as a warehouse on rent, it would be covered by the State Shops and Establishments Act only if the area falls under the same Act.
From India, Salem
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6185Any place or space falling outside the approved plan of the factory will not form part of the premises and precincts earmarked for the purpose of registration under the Factories Act, 1948. In such a situation, the establishment-specific law applicable to that place depends on the nature of activity carried on there only. Particularly, when the building or place just across the same street or opposite to the existing factory premises is used as a warehouse on rent, it would be covered by the State Shops and Establishments Act only if the area falls under the same Act.
From India, Salem
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Dear Suraj,
If the warehouse is not situated adjacent to the factory, then the said warehouse will come under the Shops and Establishment Act, and you need to take the registration under the said Act.
From India, Kochi
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If the warehouse is not situated adjacent to the factory, then the said warehouse will come under the Shops and Establishment Act, and you need to take the registration under the said Act.
From India, Kochi
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The storage facility is a part of the manufacturing activity undertaken, the Section 2 (k) of the Factories Act 1948 defines Manufacturing Process as under:
(k) “manufacturing process” means any process for—
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal,
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage;
So packing the goods or keeping goods for its sale or disposal would come within the manufacturing process.
The warehouse is opposite the factory, so it is appurtenant to the factory building. Furthermore, there will be regular crisscrossing of workmen between the factory and warehouse every now and then. So it is to be mentioned as a part of the factory and the Factory License shall be amended to include it, if it is already not done so. For practical reasons, it is advisable to avoid registering it under Shop & Establishment Act
From India, Mumbai
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(k) “manufacturing process” means any process for—
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal,
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage;
So packing the goods or keeping goods for its sale or disposal would come within the manufacturing process.
The warehouse is opposite the factory, so it is appurtenant to the factory building. Furthermore, there will be regular crisscrossing of workmen between the factory and warehouse every now and then. So it is to be mentioned as a part of the factory and the Factory License shall be amended to include it, if it is already not done so. For practical reasons, it is advisable to avoid registering it under Shop & Establishment Act
From India, Mumbai
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Dear members, Appreciate you all for replying at the earliest. But I am a little bit confused, since I got two different views.
From India, Ahmedabad
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From India, Ahmedabad
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You can make the storage facility to be a part of the factory in case you have not done so as it comes within the fold of the manufacturing process as per Factories Act 1948.
From India, Mumbai
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From India, Mumbai
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Dear Rathod,
You need not get confused by Mr. KK!HR's answer and mine. In fact, both are the same but expressed differently. A warehouse, godown, or similar storage facility belonging to a registered factory but situated beyond its approved periphery would normally come under the Shops and Establishments Act only. However, if any activity analogous to the manufacturing process, such as mixing different components, packing, etc., is carried out there with 10 or more employees using power or 20 or more employees without power, then it would be considered a factory falling under the Factories Act, 1948.
Please let me know if you need further clarification.
Best regards,
[Your Name]
From India, Salem
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You need not get confused by Mr. KK!HR's answer and mine. In fact, both are the same but expressed differently. A warehouse, godown, or similar storage facility belonging to a registered factory but situated beyond its approved periphery would normally come under the Shops and Establishments Act only. However, if any activity analogous to the manufacturing process, such as mixing different components, packing, etc., is carried out there with 10 or more employees using power or 20 or more employees without power, then it would be considered a factory falling under the Factories Act, 1948.
Please let me know if you need further clarification.
Best regards,
[Your Name]
From India, Salem
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Dear Colleague,
In my view, you have the option but no compulsion to include the warehouse premises as a part of the factory. However, it would be advantageous to do so if your factory operations are in shifts and you also want the warehouse to operate in shifts, aiming for uniformity in service conditions between factory and warehouse workers. If your decision favors this, you need to amend your plans to include it and obtain approval from the Factory Inspectorate.
If not, cover it under the State Shops and Establishment Act/Rules. You need to include it under either of the two Acts.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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In my view, you have the option but no compulsion to include the warehouse premises as a part of the factory. However, it would be advantageous to do so if your factory operations are in shifts and you also want the warehouse to operate in shifts, aiming for uniformity in service conditions between factory and warehouse workers. If your decision favors this, you need to amend your plans to include it and obtain approval from the Factory Inspectorate.
If not, cover it under the State Shops and Establishment Act/Rules. You need to include it under either of the two Acts.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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Mr. Rathod,
I think you want to have the warehouse as a part of the same factory license. That is allowed. Under Gujarat Factory Rules, you can make a request to include a premise in the same factory license that is not physically connected to the main factory. You will need to go through the Factory rules to find the exact provision.
In fact, there is no restriction on the distance between the 2 plots, though the Chief Inspector is unlikely to allow inclusion of a place that is actually far away.
The advantages are:
1. You do not need to maintain separate registers for those working in the warehouse
2. The Leave rules would be the same (Shop Act has more leaves)
3. Separate license, returns, etc., are not required.
4. You can move workers from the factory to the warehouse and vice versa as needed. You cannot do that if they are under separate license because you need to then have them as employees of 2 separate establishments, and it will mess up your payroll.
5. Any contract worker can also move between the 2 premises without causing any problem.
From India, Mumbai
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I think you want to have the warehouse as a part of the same factory license. That is allowed. Under Gujarat Factory Rules, you can make a request to include a premise in the same factory license that is not physically connected to the main factory. You will need to go through the Factory rules to find the exact provision.
In fact, there is no restriction on the distance between the 2 plots, though the Chief Inspector is unlikely to allow inclusion of a place that is actually far away.
The advantages are:
1. You do not need to maintain separate registers for those working in the warehouse
2. The Leave rules would be the same (Shop Act has more leaves)
3. Separate license, returns, etc., are not required.
4. You can move workers from the factory to the warehouse and vice versa as needed. You cannot do that if they are under separate license because you need to then have them as employees of 2 separate establishments, and it will mess up your payroll.
5. Any contract worker can also move between the 2 premises without causing any problem.
From India, Mumbai
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