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Rajya Sabha TV Law of the Land – The Factories (Amendment) Bill, 2016



Rajya Sabha TV Law of the Land – The Factories (Amendment) Bill, 2016


The Factories (Amendment) Bill, 2016 was introduced in the Lok Sabha in August 2016 by the Minister of Labour and Employment Mr. Bandaru Dattatreya. The Bill amends the Factories Act, 1948 which regulates the safety, health and welfare of the factory workers.


The Factories (Amendment) Bill, 2016 seeks to increase the existing threshold of overtime working hours for factory workers. The limited amendments have been brought by the Government to allow the industry to meet their urgent manufacturing requirements. The comprehensive changes in the factories law is still under consideration.

The inadequate duration of overtime was a huge hindrance for factories to complete their targets on an urgent basis. The existing law does not allow overtime by factory owners beyond a limit. In order to allow the manufacturing sector to meet its commitment, the industry had petitioned the Government to increase the number of hours a factory worker could be asked to work overtime. The Factories (Amendment) Bill, 2016 was introduced by the Government because the 2014 Bill had lot of issues that will take a lot of time in creating a consensus on the floor of Parliament. Therefore, it is a wise step taken coming up with a separate Bill.

There have been several amendments in this Act which includes changes in manufacturing practices, new technologies and ratification of ILO Convention. To give effect to these changes, Factories (Amendment) Bill, 2014 was brought which is still under consideration. The overall aim of the new Bill is to facilitate ease of doing business in the country along with enhancing employment opportunities in the manufacturing sector. The increase in overtime hours/quarter is within the limit of 144 hours/quarter as prescribed in the ILO regulations on overtime and extra hours.

Factories (Amendment) Bill, 2014:

  1. It amended the parent Act to allow women to work in night shifts provided enough safeguards were given to them by their workplace.
  2. The Bill amended the definition of the Factory which included entities employing 20 persons with power usage and entities employing 40 persons without power usage.
  3. The Bill provided penalties such as jail term of 6 months and maximum fine of Rs. 3 lakhs if the employer does not adheres to the provisions of the Bill.

The Bill was recommended to the Parliamentary Standing Committee on Labour which gave following recommendations:

  1. Hazardous processes should find a place in the proposed amendment along with hazardous substances.
  2. The provisions providing the extensions on overtime up to 125 hours/quarter should be revisited as it can lead to harassment of employees and have a negative impact on employment generation.
  3. It should be made sure that the employers don’t terminate the employment of pregnant women and disabled employees or force them to take voluntary retirement.
  4. All factory workers in a state should be brought under one Labour Commissioner.

Proposed Changes in 2016:

The Factories (Amendment) Bill, 2016 seeks to amend Section 64 of the Factories Act:

  1. By increasing the present overtime limit of 50 hours/quarter to 100 hours/quarter.
  2. The Bill empowers the central Government in addition to the State Governments to make exempting rules and orders with respect to total number of working hours on overtime in a quarter.

Amendments in Section 65 of the Act:

  1. The Bill increases the limit on overtime in case of exceptional workload from 75 hours/quarter to a maximum of 115 hour/quarter.
  2. The Bill empowers the central Government in addition to the State Governments to make exempting rules and orders with respect to total number of working hours on overtime in a quarter.
  3. It also has a provision that allows Central and State Government as well as the Chief Inspector on approval of the State Government to extend total number of overtime hours to a maximum of 125 hours in public interest or exceptional workload.

Views and Counterviews:

There are apprehensions that increasing the overtime hours might affect the health and family life of the workers. There are social obligations which a worker might not be able to fulfill if he/she has to work overtime. India already faces the problem of unemployment therefore, rather than announcing overtime, it is better to provide jobs to the unemployed workers.

At times, because of breakdowns or disruptions, the production required is not achieved. So in these cases, there is a constraint to keep people on overtime and bring the factory back to normalcy otherwise, the losses will increase. The working conditions in respective factories add matters a lot. If working conditions or environment is not very good, even 8 hours of work would be detrimental to the health and existence of a worker. But if the working standards are as per the requirements of law, then additional work of 3-4 hours would not make a big difference. There are both internal and external disruptions in work. The workers have to travel long distances because the industries are located in distant areas from the main townships. There are traffic issues, climatic conditions or accidents because of which they are unable to reach on time hampering production.

A person who is working for last 5-10 years in an industry is far better acquainted to work rather than new workers. In order to compete with the world economies, Indian industries also have to perform to the best of their capabilities. These amendments actually empower the existing factories to perform at their highest efficiencies so that they create more jobs rather than taking the burden of employment.


The new Bill does not negate the previous Bill of 2014. It is an addition. The Factories (Amendment) Bill 2016 is a way forward. From the industry perspective, more flexibility is needed to meet the market demands. It will also help in Make in India scheme. The trade unions always want to safeguard the chances of exploitation and this is a major concern for them but altogether, this will ensure an increase in employment.