The Factories Act 1948: Navigating Central Law Transition and State-Level Reforms in India
The Factories Act 1948 remains the essential legal bulwark for worker welfare and safety across Indian manufacturing. For decades, it has dictated the standards for health, safety, and working conditions. However, in recent times, the regulatory environment is changing at a rapid pace. Consequently, factory owners and workers must closely track two major reform fronts: first, the imminent national transition to the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code, 2020); and second, the significant operational changes being introduced by progressive State Governments, such as Gujarat. Furthermore, staying updated on these reforms is essential to ensure compliance and maintain worker safety.
This article not only details the core requirements of the currently enforced Factories Act 1948, but also integrates the latest judicial interpretations. In addition, it highlights critical state-level amendments and the impending central Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code, 2020). Thus, readers can gain a comprehensive understanding of factory law compliance in India, while also staying informed about upcoming regulatory changes.
Defining the Scope of The Factories Act 1948: An Evolving Definition
The foundational applicability of The Factories Act 1948 rests on a dual threshold related to the workforce size and the presence of power.
Judicial Expansion of “Manufacturing Process”
In a landmark judicial development in March 2025, the Supreme Court of India significantly expanded the scope of “manufacturing process” under the Act. Specifically, the Court ruled that service-oriented activities, such as washing, cleaning, and dry-cleaning, also qualify as manufacturing processes, even though they do not result in a new product. As a result, this decision brings service-oriented industries under the purview of the Act, thereby extending worker protections to a broader range of sectors. This critical decision brings industries like laundry services and other non-traditional manufacturing units under the stringent safety and welfare requirements of The Factories Act 1948, ensuring broader worker protection across the service sector.
Core Worker Protection: Health, Safety, and Welfare Mandates
The fundamental purpose of The Factories Act 1948 is to ensure a safe and hygienic working environment for all employees.
1. Health and Safety Provisions
Factory occupiers must take practical steps to eliminate hazards. The Act strictly mandates:
- Machinery Fencing: All moving machinery parts and dangerous processes must be securely fenced (Section 21).
- Cleanliness and Disposal: Premises must be kept clean, and there must be effective arrangements for the disposal of waste and effluents (Sections 11–20).
- Protection from Hazards: For operations involving hazardous processes, factory management must comply with specific rules, including the constitution of a Site Appraisal Committee.
2. Welfare and Amenities
The Act creates a strong foundation for worker welfare through mandated amenities, scaled to the size and demographic of the workforce:
- Crèche Facilities: Factories must provide a crèche for children under six years old if they employ more than thirty female workers (Section 48).
- Canteens and Rest Areas: Factories with over 250 workers must provide canteen facilities offering subsidised, nutritious meals. All factories must provide comfortable rest rooms and shelters for breaks (Sections 46–47).
- Welfare Officers: Moreover, occupiers employing 500 or more workers must appoint a dedicated Welfare Officer to oversee and facilitate the overall well-being of the workforce (Section 49). This ensures that welfare measures are properly implemented and workers receive the support they need on a continuous basis.
The Dual Path of Reform: OSH Code and State Flexibility
Factory management in India must now track two distinct legislative streams that are reshaping the regulations of The Factories Act 1948.
A. The Impending National Transition: OSH Code 2020
The Central Government’s Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) is set to subsume The Factories Act 1948 nationally.Although the enforcement date is pending the finalisation of State Rules, factory owners must still prepare for major changes. For instance, they should review existing safety protocols, while also updating training programmes and compliance procedures to ensure alignment with upcoming regulations.
- Relaxed Factory Thresholds: The OSH Code increases the threshold for factory applicability to 20 workers (with power) and 40 workers (without power). This provides regulatory relief for thousands of smaller manufacturing units.
- Simplified Compliance: The new Code moves from multiple registrations under various laws to a single electronic registration and licence process via the Central Government’s Shram Suvidha portal, streamlining compliance across the country.
- Enhanced Penalties: Importantly, the OSH Code introduces much harsher penalties. For example, fines can reach up to ₹5 lakh, and severe violations, particularly those resulting in a worker’s death, may even lead to imprisonment. Consequently, compliance has become more critical than ever for factory owners.
State-Level Operational Flexibility: The Gujarat Model (July 2025)
In July 2025, the Gujarat Government introduced significant amendments to the Factories Act 1948 in the State. These changes not only provide operational flexibility, but also ensure that the principle of worker safety remains firmly upheld. As a result, factory owners must adapt their operations while continuing to prioritise employee welfare.
- Increased Daily Working Hours: Factories can now permit daily working hours of up to 12 hours (previously 9 hours), provided the total weekly limit of 48 hours is strictly maintained.
- Night Shift for Women: The State now permits women to work night shifts, subject to their written consent and mandatory provision of robust safety measures and transportation.
- Higher Overtime Limit: Permissible overtime work has been increased from 75 hours to 125 hours per quarter, enabling factories to meet peak demands more easily, provided workers provide written consent and receive double the ordinary wage rate.
These State amendments offer a glimpse into the flexible working conditions expected under the new national Code.
Expert Tips for Proactive Compliance
- Integrated Safety Audits: Do not wait for inspections. Conduct regular, independent safety audits that cover not only the 1948 Act but also anticipate the requirements of the OSH Code, particularly concerning hazardous processes and fire safety.
- Digital Record-Keeping: Begin documenting all working hours, overtime consent forms, and leave registers electronically. The shift to the Shram Suvidha portal will make digital records mandatory for streamlined oversight.
- Training and Awareness: Implement continuous training and awareness programs. Educate your supervisors on the revised overtime limits (e.g., the 125-hour quarterly cap in Gujarat) and ensure all employees understand their right to a safe environment and their duty to report violations.
Conclusion and Call-to-Action
The Factories Act 1948 remains a vital tool for ensuring worker welfare and safety across India’s industrial landscape. With recent amendments and stricter enforcement, factories must prioritise compliance to foster safe, equitable workplaces. For detailed guidance, visit the Ministry of Labour and Employment or your state’s labour department portal.
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