DECODED : The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014

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Current Challenges :

  • Too many acts to comply ( 44 Central & around 100 State Acts )
  • Many SME’s still operate as unorganized sector, hence depriving the workers of their basic needs
  • Restrictions on Overtime, employing women, etc
  • Seen as a Entry Barrier to organized workforce by owners / entrepreneurs

 What’s Proposed to Change & How ? - HIGHLIGHTS

  • Applicable to factories employing less than 40 people (excluding administrative & managerial staff) and not involved in “hazardous manufacturing process”
  • Any payment of wages in excess of Rs.1000 shall be paid electronically only thru a bank
  • Bonus at rate of 8.33% without any conditions & irrespective of Profit or Loss.
  • Issue appointment order to all workers
  • Women can work between 7PM to 6AM subject to certain conditions
  • Workers shall be entitled for 7 Casual & 7 Sick Leaves every year in addition to 3 National holidays & 5 festival holidays
  • Cannot employ workers less than 14 years of age
  • Maternity benefit of 90 days subject to certain conditions
  • Enroll coverage under any IRDA approved Provident Fund @ 10% each
  • Enroll coverage under any IRDA approved Health Insurance scheme @ 10% each
  • Enroll coverage under any IRDA approved Gratuity scheme & pay 15 Days wages for each completed year subject to certain conditions
  • Specific conditions laid for worker’s retrenchment
  • Improved Health & Safety Standards for workers
  • Worker Welfare : Drinking water, latrines, crèche, First Aid mandatory
  • Minimal registers and records to me maintained
  • Heavy penalties and prosecution for non-compliance factories

Want the Actual Draft of the Act ? Click Here to download.



Exemption of the Small Factory from the Following Acts : 

  • The Factories Act, 1947
  • Employees Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees State Insurance Act, 1948
  • The Industrial Disputes Act, 1947
  • The Industrial Employment (Standing orders) Act 1946
  • The Minimum Wages Act,1948
  • The Payment of Wages Act, 1936
  • The Payment of Bonus Act, 1965
  • The Maternity Benefit Act 1961
  • The Employees compensation Act,1923
  • The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service ) Act, 1979
  • (State) Shops and Establishments Act
  • The Equal Remuneration Act, 1976
  • The Child Labour (Prohibition and Regulation)Act, 1986

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