avinash goyal
Avinash Goyal
Small Scale Industries – 3
Rules and Regulations Governing Small-Scale Industry
Rules and Regulations are the essence of the any business for its steady growth. These are governing factors to ensure that everything goes well in accordance with the Plan and Policy adopted, the instructions issued, the principles established. The possibility of errors and omissions could be rectified and their recurrence may be prevented. The regulation applies on people, object and actions.
Thus, a regulation is a process by which the authorities can check on
• Whether or not the plans are being adhered to
• Whether or not a proper progress is being made towards the objectives,
• Whether the environment is saved from the pollution
• Whether law and order is maintained or not
• Whether the interests of the workers are safeguarded or not
• Whether the small entrepreneurs are getting the raw materials nor not
• Whether there are any deviations for which a corrective action needs to be taken, etc.
The basic objective of the whole process of regulations is to ensure that the results of operations conform as closely as possible to the established standards of goods, specified procedures and instructions.
The Regulations which are applicable to SSI are of two types: (1) Protective (2) Promotional.
While protective regulations are of the nature of various safeguards to SSI while promotional regulations are the nature of giving a push to the SSI for their growth.
The Regulations: SSI is regulated and governed by the following regulations:
1. State Industries Act
2. The Factories Act, 1948
3. Shops & Establishment Act, 1948
4. Indian Boiler Act
5. Payment of Wages Act, 1936
6. Minimum Wages Act, 1948
7. Workmen’s Compensation Act, 1923
8. Employees Provident Fund Act, 1952
9. Employees State Insurance Act, 1948
10. Income Tax Ac, 1961
11. Central Sales Tax Act and State Sales Tax Acts
12. Drugs Control Act
13. The Payment of Bonus Act, 1978
14. The Industrial Employment (Standing Orders) Act, 1956
15. Industrial disputes Act, 1947.
The Small Scale entrepreneur has to be well versed in excise, customs procedures and export / import regulations and procedures. They could seek the advise and assistance from the professionals like – Inspecting Staff of Government, Labour Consultants, Financial Consultants, etc.
Industrial Development (Regulation) Act.
The IDR Act is an instrument in the hands of the Government for the control and direction of the private sector industrial investments. The control over the industrial licensing system is exercised through this IDR Act with the overall national interest. It is a complicated, time consuming and costly exercise to acquire an industrial license. Sometimes, it takes years before it can be obtained. Due to non availability of qualified persons to prepare application for industrial license, government could not implement the procedure to the SSI.
In recent years, various associations of SSI have come forward for their legislative protection. In August 1971, the Small Scale Industries Board had recommended to the Government to set up a committee to examine the feasibility of enacting suitable legislation for the development of small scale industries.
The Government had recommended forming a Committee headed by Mr. A.R. Bhat to draft legislation for the small scale sector. The committee had placed the draft legislation s for the approval of Government. However, the Government has not been able to take any decision on them, because it has reservations on the desirability of enacting such legislations.
The Government should keep the interests of the community uppermost in mind while extending legislative protection to the small sector industries.
Factories Act, 1948:
Definition of a Factory: Section 2 (m) defines a factory as any place wherein ten or more persons are working and in which a manufacturing process is carried on with the aid of motive power supplied by steam, oil or electricity. Premises in which power is not used come under the term of a factory if twenty or more persons are working in them.
Employment of Children: The act fixes the minimum age of persons who can enter a factory for work at 14 years. The Act restricted the entry of children below 13 years for employment. The Act further notified that a qualified surgeon must certify the correctness of his age and that certified copy must be available with the factory manager at any time for inspection.
Hours of work for children: The Act restricted the hours of work at four and a half hours from 5 hours for children age of 14 - 17 and prohibited the work at night for such persons.
Hours of work for Adult Male and Female workers: The Act restricts employment of women in factories between 6 pm to 7 am and has also reduced the daily working hours from 8 hours to 7-1/2 hours. The act also made it compulsory of half an hour break after completing 5 hours. The worker, who works for more than 8 hours in a day, is to be paid for the extra hours work at the rate of twice their ordinary rate of wages.
Cleanliness: The Act provides that every factory shall be kept clean. Accumulation of dirt and refuse shall be removed from the floor. The benches of work room, staircases and passages are also to be maintained properly and cleaned every week. All inside walls shall be white-washed every year of painted once in every 5 years. Due importance is given for cleanliness.
Ventilation and Temperature: The Act provides for adequate ventilation and fresh air circulation in every factory and maintains the required temperature. Adequate measures shall be taken by the management to protect the workers from excess temperature.
The State Government may prescribe a standard of adequate ventilation and reasonable temperature for any factory and suggests ways and means for reducing excess temperatures. Measures also to be taken to prevent the dust or fumes which ware injurious to the health of the workers which may prevent the workers inhalation of fresh oxygen.
Artificial Humidification: In factories where humidity is artificially increased or maintained, the State Government may implement some rules –
• Prescribing standards of humidification
• Regulating methods used for humidification
• Directing that prescribed tests for determining humidity.
• Prescribing certain methods for securing adequate ventilation and cooling of the air in those rooms where artificial humidity is introduced.
• Water used for humidification and drinking, shall be of municipal approved.
Overcrowding: To prevent overcrowding in any factory, the Act lays down that a minimum of 500 cubit feet space shall be provided to each work. The Chief Inspector of Factories will communicate each factory manager the maximum number of workers that may be employed on any premises. However, he has the authority to exempt any factory or work area from this rule if he is satisfied that it is not necessary to follow the prescribed rules in the interest of workers employed therein.
Lighting: Management of a factory has to maintain sufficient and suitable lighting, natural or artificial or both, in all the work areas. All the glasses are to be kept clean on both the inner and outer surface and effective measures to be taken where shadows may cause eye-strain or create a risk of accidents.
Drinking Water: In every factory, effective arrangement of water at prominent locations shall be provided. Where more than 253 workers are ordinarily employed, provision of cool drinking water shall be made during the hot weather.
Latrines and Urinals: Sufficient latrines and urinal facilities shall be provided at the places accessible to workers at all times while they are duty in the factory. The State Government may prescribe the number of latrines and urinals to be provided in any factory in proportion to the number of male and female workers employed therein.
Safety Provisions: All possible safety measures are to be provided at the factory premises. It is the legal responsibility of the management for maintenance and use of safety guards. It is its duty to supervise the use of these guards by the workers. In every factory, all dangerous parts of all machines like moving parts of prime movers, fly wheels, electric generators, motors, Rotary converts, etc. shall be provided with proper fencing for safety measures.
Dangerous Fumes (smoke) Adequate provisions shall be made in a factory where dangerous smokes that may occur in any chamber, tank, pipe etc.
Explosive Gases, Dust, etc. Preventive measures are to be taken to avoid possible explosives, gas leakages, smokes, etc.
Welfare Provisions: Workers shall be provided with suitable welfare facilities like washing facilities, storing and drying clothes, facilities for sitting, first aid appliances, and other welfare activities which might boost the worker for satisfactory working conditions.
Penalties for Breach of Provision of the Act: Disobeying the provisions of the Act shall be liable for office and be punishable with imprisonment for a term not exceeding three months or with a fine upto Rs. 500 or both.
Income Tax Act:
The Government has provided some income tax concessions for small scale industries. Under Section 80 HHA, any profits and gains earned from a new small scale industrial undertakings set up in any rural area are provided with 20% tax rebate for the first ten assessment years. This concession was extended only to those units who have set up its business after September 30, 1977.
Another incentive is the investment allowance under section 32A of the Act. Any small scale unit is entitled to a deduction of 25% of the cost of plant and machinery installed after march 31, 1976.
The Industrial Employment (Standing Orders) Act, 1946.
The Standing Orders in any factory clearly defining the rights and obligations of the employer and the workers in respect of recruitment, discharge, disciplinary action, holidays, leave, etc are lacking. The absence of clear cut orders causes confusion between management and workers. During the Labour Conferences held in 1943, 1944 and 1945, the Government of India passed the Industrial Employment (Standing Orders) Act in 1946. This act provides for the framing of standing orders in all establishments employing 100 or more workers.
The Act requires the employers to submit the details about the classification of workers (temporary or permanent), their working hours, holidays, pay days, wages rates, procedure to be followed while applying for leave and holidays, termination of employment, notice of discharge, disciplinary actions, etc.
The Act has been put into practice by all the State Governments. In Maharashtra State, it has been made applicable to establishments in which fifty or more persons are employed.
The Indian Trade Unions Act, 1926:
Trade Unions are formed to protect the interest of workers as against the employers. It was the employer who bargains with the worker to work for him at low wages. The worker on an individual capacity cannot bargain for a higher wage. If he does so, he will not be offered the job and he has to go for starvation. Since his income is very low, he is not able to accumulate any savings. If he refuses the job of whatever the wage, he will not find it that job as well. It is relatively difficult for a worker to find an alternative employer who would pay him the wage he demands. His weak bargaining position thus compels him to accept whatever wages are offered to him. It is possible for the employer to refuse the wage which a worker demands because he could engage somebody else who is willing to work on a lower wage.
It is therefore, in the interest of protecting the worker and to safe guard his minimum wages for which he is right, trade unions are formed for the mutual benefit and build employer-employee relations.
Rules of Trade Union: The rules of trade union must contain the following provisions:
• The name of the Trade Union under which it is registered of existed
• The objects for which it has been established
• Purpose for which the general funds will be applicable
• Maintenance of the list of members for inspection by officers and members of the union
• Admission of new ordinary members and honorary members
• The conditions under which the members are entitled to the benefits
• The manner in which the rules shall be amended, altered, and revoked / recalled.
• The manner in which officer bearers of the Union shall be appointed or removed
• The safe custody of the funds of the union, audit of accounts, inspection of account books, etc.
• The manner in which the union will be dissolved.
Rights of Registered Trade Unions:
• Collect membership fees on the premises of the factory without interference from the management
• Put up notices of the meetings of the union and other activities of the union on the premises of the factory.
• Use the general funds for specific purposes
• Attend the management meeting on behalf of workers.
• Represent the worker in the matter pertains to show cause or labour court.
• Raise funds for political purposes at the option of the members
• Conduct a strike by peaceful methods with permission from all members
• Appoint outsiders as an Executive of the union in certain cases
• Send to the Registrar every year, an audited statement of the receipts and expenditure.
The Payment of Wages Act, 1936
All the workers in a factory are supposed to get wages either weekly or monthly, for the work and the service he has done. The payment of wages to the workers in a particular form and at regular intervals without any unauthorized deductions is the objective of this Act.
Scope of the Act: The provision of this Act applies to workers engages in factories as defined in the Factories Act of 1948 and the persons employed in any railway by contractor or sub-contractor. The Act may also include any persons employed in any industrial establishments.. The provisions of this Act are applicable to those persons whose wages are less than Rs. 400 per month.
The date of payment of wages: The wages of every persons employed in any factory, industrial establishment, or railways, where less than 1000 workers are employed, shall be paid before the expiry of the seventh day after completion of the wage period, generally a month. The wages for a month, for example, shall be paid before the seventh day of the next month. If the workers employed in a factory are more than 1000, the wages shall be paid within 10th day of the next month. The wages of a terminated person shall be settled his account by the next work day after such termination.
Authorized Deductions: The Act authorizes an employer to make deductions from wages for the specific purposes only such as fine, absence from duty, damage to or loss of goods or money, where such damage is due to the negligence or default on the part of the employee, housing accommodation supplied by the employer and such amenities / services provided by the employer as the State Government may authorize.
• The fines shall be imposed by the employer with the due approval of the State Government after serving proper notice to the employee, about the fine.
• Fines shall not be imposed on any employee unless he has been given an opportunity to show cause why the fine should not be imposed on him.
• No fine shall be imposed on persons below the age of fifteen years.
• A fine imposed on any employee in any wage period shall not exceed an amount of half an anna or three naye paise in the rupee of the wages payable to him for the period.
• The fine so imposed shall be recovered in installments or after the expiry of sixty days from the day on which it was imposed.
• The amount of fines so collected from time to time from various employees shall be utilized only for such purposes as are beneficial to the employees, as prescribed by the authorities.
The Workmen’s Compensation Act, 1923:
With the installation of machineries operated by electrical powers, the number of accidents in factories has also increased considerably. Many times, workers lost their fingers, sometimes their hands, feet and on many occasions, their lives while working on machines. This has caused the loss of earnings for their dependents and they are left to starve.
On such occasions, it is quite natural that the employer purely on humanitarian point of view provides some compensation to such workers or their dependents. On the economic ground, neither the society nor the employers were at ready to take the liability of payment of any compensation. However, some enlightened employer did pay compensation to their employees when they suffered accidents, but a large majority was not willing to accept this responsibility. The workers could not claim compensation as a matter of right since he was on the weaker side. Even when the compensations are paid, the amount paid was not satisfactory and there were difference of opinion between the employer and the employer as regards the correctness or fairness of the amount paid.
In order to provide some bases for a statutory claim for compensation to be paid to the disabled factory worker, Workmen’s Compensation Acts have been passed in almost all the countries.
Employer’s Liability for Compensation: When a personal injury is caused to a worker by an accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provision of this Act.
When Employer is not Liable: At some times, the employer is not liable if –
1. The injury results in a partial or total disablement of the worker for less than 3 days,
2. If the injury caused to the worker directly after having been under the influence of drinks or drugs
3. If the injury can be directly attributed to the willful disobedience by the work of an order expressly given
4. To the willful removal or disregard by the worker of any safety guard or other device which he knew to have been provided for the purpose of security his safety.
Occupational Diseases: If a worker is engaged continuously for not less than six months in any employment which involves health hazardous in nature, and gets contacts any disease specified in the Schedule as an occupational diseases, the contacting of such a disease shall be regarded as an injury by accident and shall be deemed to have arisen out of and in the course of employment. The State Government may add to the list of schedules and specify the corresponding disease after giving three months notice in the Gazette.
The injuries for the purpose of this Act have been classified as Death, Permanent total disablement, Permanent partial disablement and Temporary disablement – partial or total. The Act provides for compensation for these categories of injuries in the Schedules I to IV. A worker who has given notice of an accident shall submit himself to a medical examination by the qualified medical practitioner at the cost of the employer. When a worker who receives half monthly payments under this act due to above injuries, shall submit himself to such medication examination from time to time till the medical examiner certifies him to be fit to works. If worker refuses to submit himself to such a medical examination without sufficient cause, his right to compensation shall be suspended.
The Employees State Insurance Act, 1948:
1. The implementation of Workmen’s Compensation Act experienced that the benefits offered to any workers in many cases did not reach them due to various reasons:
2. The claim for compensation for injury had to be filed in an ordinary court of law. The lack of finance made impossible for a worker to file such a suit and fight for it.
3. The employer, through his expert legal advice, proves that the accident did not arise out of and in the course of employment
4. Or some times that the accident took place due to worker concerned being under the influence of alcohol or drug at the time of accident
5. Or may be due to his negligence or his disobedience of obeying for the safety rules.
6. In such cases, the workers were generally unwilling to go to court of law and preferred to accept whatever compensation employers chose to pay out of a sense of pity or charity. The Employees’ State Insurance Act of 1948 was framed to prevent such victimization of the worker by the employer.
Contribution: Every person who are employed for wages in any factory or establishment, to which this Act applies, shall be insured. The insured workers whose wages are more than one rupee per day, shall pay his contribution to the Employees’ State Insurance corporation at the rates specified in the Act.
Benefits under the Act:
The insured persons or their dependants shall be entitled to many benefits:
Sickness Benefits: In case of sickness as certified by a duly appointed medical practitioner, the insured person shall get the periodical payments.
Maternity benefits: Periodical payments in case of confinement to an insured woman certified to be eligible for such payment by an authority specified in this Schedule.
Disablement benefits: Periodical payment to an insured persons suffering from disablement as a result of an injury sustained in the course of his employment.
Dependants’ Benefits: Periodical payments to such dependants of an insured person who dies as a result of an injury sustained in the course of his employment.
Medical Benefits: Free medical check up and treatment are extended to the insured person and the Corporation, with the permission of the Government of India, could extend medical benefits to his dependants.
A person who claims for sickness or disablement benefit must observe that:
1. He shall remain under the medical treatment at dispensary, hospital, clinic or other institution and observe the instructions of the medical officer in charges of his case.
2. He shall not while under the treatment, do anything which might delay his chances of recovery.
3. He shall not leave the area in which medical treatment provided without prior permission of the medical officer or such authority.
4. He shall allow himself to be examined by any duly appointed medical officer.
The Act also provides for penalties when a person makes a false statement for the purpose of causing any increase in the payment or benefit or causing any payment where no payment or benefit is authorized, etc.
The Industrial Disputes Act, 1947:
The Industrial Disputes, strikes and lock-outs were not very common occurrences in India till 1914. During the Great War of 1914 – 1918, the strike came to be regarded as a weapon of industrial warfare. During the war, the cost of living went on rising, but the wages did not keep pace with it. This gave rise to serious pain among industrial workers and led to a series of strikes, notably in Mumbai Textile Industries.. In addition to low wages, there were many other causes which were partly responsible for the outbreak of strikes during that period. The more important of these were long hours of work, bad working conditions, insanitary housing conditions, absence of any provision for compensation for injuries sustained during the course of employment, absence of the right to form a trade union, ill treatment of workmen, officials, etc.
The important provisions of the Industrial Disputes Act of 1947 are:
• If any industrial dispute exists or is planned or sensed, the appropriate Government may by order in writing, refer the dispute to a Board for promoting a settlement or refer to the court of Inquiry and to a Tribunal for Arbitration.
• When either or both of the parties apply to the Government to refer the dispute to a Board, Court or Tribunal, the person applying should represent majority of each party.
• If a dispute has been referred to a Board or a Tribunal, the Government may prohibit the continuance of any strike or lock out in connection with such a dispute.
• A settlement arrived at in the course of conciliation proceedings under the Act, or an award declared by the Government, shall be binding on all the parties to the dispute for 6 months.
• An award declared by the Government shall come into operation for a period of one year.
• Workers employed in public utility industries shall not go on a strike and the employers in such industries shall not resort to lock outs
- Without giving a fourteen days’ notice and before the period of notice expires, or
- During the pendency of conciliation proceedings.
• Workers employed in any industrial establishment shall not go on strike
- During the pendency of conciliation proceedings
- During the pendency of proceeding before a Labour court, Tribunal or National Tribunal
- During a period in which a settlement or a award is in operation.
The Indian boilers Act, 1923:
1. An owner of a boiler shall not use it or permit to be used
2. Unless it has been registered in accordance with the provisions of this act,
3. In case of a boiler transferred from one State to another, until the transfer has been reported in the prescribed manner
4. At a pressure higher than the maximum pressure recorded in such certificate
5. Unless the boiler is in charge of a person holding a certificate of competency.
The Indian Electricity Act, 1910:
The act relates to the supply and use of electricity energy. The State Government may, on an application made in the prescribed form and on payment of prescribed fees, grant a license to supply energy in any specified area and also lay the electric supply lines.
Conclusion:
The rules and regulations governing the small scale industries shall ensure healthy growth and rapid growth and ensure that standard of goods and procedures or instructions are improved. The rules and regulations ensure steady and rapid growth of small scale industries, develop new products and markets, produce quality goods, and promote healthy development of human resources. Since small industries are located nearer to the natural resources and human resources, they do not pollute or degrade the ecosystem or employ labour and cheat the consumer on all counts. Therefore, the Rules and Regulations are the basic components of small scale industries.
Rules and Regulations Governing Small-Scale Industry
Rules and Regulations are the essence of the any business for its steady growth. These are governing factors to ensure that everything goes well in accordance with the Plan and Policy adopted, the instructions issued, the principles established. The possibility of errors and omissions could be rectified and their recurrence may be prevented. The regulation applies on people, object and actions.
Thus, a regulation is a process by which the authorities can check on
• Whether or not the plans are being adhered to
• Whether or not a proper progress is being made towards the objectives,
• Whether the environment is saved from the pollution
• Whether law and order is maintained or not
• Whether the interests of the workers are safeguarded or not
• Whether the small entrepreneurs are getting the raw materials nor not
• Whether there are any deviations for which a corrective action needs to be taken, etc.
The basic objective of the whole process of regulations is to ensure that the results of operations conform as closely as possible to the established standards of goods, specified procedures and instructions.
The Regulations which are applicable to SSI are of two types: (1) Protective (2) Promotional.
While protective regulations are of the nature of various safeguards to SSI while promotional regulations are the nature of giving a push to the SSI for their growth.
The Regulations: SSI is regulated and governed by the following regulations:
1. State Industries Act
2. The Factories Act, 1948
3. Shops & Establishment Act, 1948
4. Indian Boiler Act
5. Payment of Wages Act, 1936
6. Minimum Wages Act, 1948
7. Workmen’s Compensation Act, 1923
8. Employees Provident Fund Act, 1952
9. Employees State Insurance Act, 1948
10. Income Tax Ac, 1961
11. Central Sales Tax Act and State Sales Tax Acts
12. Drugs Control Act
13. The Payment of Bonus Act, 1978
14. The Industrial Employment (Standing Orders) Act, 1956
15. Industrial disputes Act, 1947.
The Small Scale entrepreneur has to be well versed in excise, customs procedures and export / import regulations and procedures. They could seek the advise and assistance from the professionals like – Inspecting Staff of Government, Labour Consultants, Financial Consultants, etc.
Industrial Development (Regulation) Act.
The IDR Act is an instrument in the hands of the Government for the control and direction of the private sector industrial investments. The control over the industrial licensing system is exercised through this IDR Act with the overall national interest. It is a complicated, time consuming and costly exercise to acquire an industrial license. Sometimes, it takes years before it can be obtained. Due to non availability of qualified persons to prepare application for industrial license, government could not implement the procedure to the SSI.
In recent years, various associations of SSI have come forward for their legislative protection. In August 1971, the Small Scale Industries Board had recommended to the Government to set up a committee to examine the feasibility of enacting suitable legislation for the development of small scale industries.
The Government had recommended forming a Committee headed by Mr. A.R. Bhat to draft legislation for the small scale sector. The committee had placed the draft legislation s for the approval of Government. However, the Government has not been able to take any decision on them, because it has reservations on the desirability of enacting such legislations.
The Government should keep the interests of the community uppermost in mind while extending legislative protection to the small sector industries.
Factories Act, 1948:
Definition of a Factory: Section 2 (m) defines a factory as any place wherein ten or more persons are working and in which a manufacturing process is carried on with the aid of motive power supplied by steam, oil or electricity. Premises in which power is not used come under the term of a factory if twenty or more persons are working in them.
Employment of Children: The act fixes the minimum age of persons who can enter a factory for work at 14 years. The Act restricted the entry of children below 13 years for employment. The Act further notified that a qualified surgeon must certify the correctness of his age and that certified copy must be available with the factory manager at any time for inspection.
Hours of work for children: The Act restricted the hours of work at four and a half hours from 5 hours for children age of 14 - 17 and prohibited the work at night for such persons.
Hours of work for Adult Male and Female workers: The Act restricts employment of women in factories between 6 pm to 7 am and has also reduced the daily working hours from 8 hours to 7-1/2 hours. The act also made it compulsory of half an hour break after completing 5 hours. The worker, who works for more than 8 hours in a day, is to be paid for the extra hours work at the rate of twice their ordinary rate of wages.
Cleanliness: The Act provides that every factory shall be kept clean. Accumulation of dirt and refuse shall be removed from the floor. The benches of work room, staircases and passages are also to be maintained properly and cleaned every week. All inside walls shall be white-washed every year of painted once in every 5 years. Due importance is given for cleanliness.
Ventilation and Temperature: The Act provides for adequate ventilation and fresh air circulation in every factory and maintains the required temperature. Adequate measures shall be taken by the management to protect the workers from excess temperature.
The State Government may prescribe a standard of adequate ventilation and reasonable temperature for any factory and suggests ways and means for reducing excess temperatures. Measures also to be taken to prevent the dust or fumes which ware injurious to the health of the workers which may prevent the workers inhalation of fresh oxygen.
Artificial Humidification: In factories where humidity is artificially increased or maintained, the State Government may implement some rules –
• Prescribing standards of humidification
• Regulating methods used for humidification
• Directing that prescribed tests for determining humidity.
• Prescribing certain methods for securing adequate ventilation and cooling of the air in those rooms where artificial humidity is introduced.
• Water used for humidification and drinking, shall be of municipal approved.
Overcrowding: To prevent overcrowding in any factory, the Act lays down that a minimum of 500 cubit feet space shall be provided to each work. The Chief Inspector of Factories will communicate each factory manager the maximum number of workers that may be employed on any premises. However, he has the authority to exempt any factory or work area from this rule if he is satisfied that it is not necessary to follow the prescribed rules in the interest of workers employed therein.
Lighting: Management of a factory has to maintain sufficient and suitable lighting, natural or artificial or both, in all the work areas. All the glasses are to be kept clean on both the inner and outer surface and effective measures to be taken where shadows may cause eye-strain or create a risk of accidents.
Drinking Water: In every factory, effective arrangement of water at prominent locations shall be provided. Where more than 253 workers are ordinarily employed, provision of cool drinking water shall be made during the hot weather.
Latrines and Urinals: Sufficient latrines and urinal facilities shall be provided at the places accessible to workers at all times while they are duty in the factory. The State Government may prescribe the number of latrines and urinals to be provided in any factory in proportion to the number of male and female workers employed therein.
Safety Provisions: All possible safety measures are to be provided at the factory premises. It is the legal responsibility of the management for maintenance and use of safety guards. It is its duty to supervise the use of these guards by the workers. In every factory, all dangerous parts of all machines like moving parts of prime movers, fly wheels, electric generators, motors, Rotary converts, etc. shall be provided with proper fencing for safety measures.
Dangerous Fumes (smoke) Adequate provisions shall be made in a factory where dangerous smokes that may occur in any chamber, tank, pipe etc.
Explosive Gases, Dust, etc. Preventive measures are to be taken to avoid possible explosives, gas leakages, smokes, etc.
Welfare Provisions: Workers shall be provided with suitable welfare facilities like washing facilities, storing and drying clothes, facilities for sitting, first aid appliances, and other welfare activities which might boost the worker for satisfactory working conditions.
Penalties for Breach of Provision of the Act: Disobeying the provisions of the Act shall be liable for office and be punishable with imprisonment for a term not exceeding three months or with a fine upto Rs. 500 or both.
Income Tax Act:
The Government has provided some income tax concessions for small scale industries. Under Section 80 HHA, any profits and gains earned from a new small scale industrial undertakings set up in any rural area are provided with 20% tax rebate for the first ten assessment years. This concession was extended only to those units who have set up its business after September 30, 1977.
Another incentive is the investment allowance under section 32A of the Act. Any small scale unit is entitled to a deduction of 25% of the cost of plant and machinery installed after march 31, 1976.
The Industrial Employment (Standing Orders) Act, 1946.
The Standing Orders in any factory clearly defining the rights and obligations of the employer and the workers in respect of recruitment, discharge, disciplinary action, holidays, leave, etc are lacking. The absence of clear cut orders causes confusion between management and workers. During the Labour Conferences held in 1943, 1944 and 1945, the Government of India passed the Industrial Employment (Standing Orders) Act in 1946. This act provides for the framing of standing orders in all establishments employing 100 or more workers.
The Act requires the employers to submit the details about the classification of workers (temporary or permanent), their working hours, holidays, pay days, wages rates, procedure to be followed while applying for leave and holidays, termination of employment, notice of discharge, disciplinary actions, etc.
The Act has been put into practice by all the State Governments. In Maharashtra State, it has been made applicable to establishments in which fifty or more persons are employed.
The Indian Trade Unions Act, 1926:
Trade Unions are formed to protect the interest of workers as against the employers. It was the employer who bargains with the worker to work for him at low wages. The worker on an individual capacity cannot bargain for a higher wage. If he does so, he will not be offered the job and he has to go for starvation. Since his income is very low, he is not able to accumulate any savings. If he refuses the job of whatever the wage, he will not find it that job as well. It is relatively difficult for a worker to find an alternative employer who would pay him the wage he demands. His weak bargaining position thus compels him to accept whatever wages are offered to him. It is possible for the employer to refuse the wage which a worker demands because he could engage somebody else who is willing to work on a lower wage.
It is therefore, in the interest of protecting the worker and to safe guard his minimum wages for which he is right, trade unions are formed for the mutual benefit and build employer-employee relations.
Rules of Trade Union: The rules of trade union must contain the following provisions:
• The name of the Trade Union under which it is registered of existed
• The objects for which it has been established
• Purpose for which the general funds will be applicable
• Maintenance of the list of members for inspection by officers and members of the union
• Admission of new ordinary members and honorary members
• The conditions under which the members are entitled to the benefits
• The manner in which the rules shall be amended, altered, and revoked / recalled.
• The manner in which officer bearers of the Union shall be appointed or removed
• The safe custody of the funds of the union, audit of accounts, inspection of account books, etc.
• The manner in which the union will be dissolved.
Rights of Registered Trade Unions:
• Collect membership fees on the premises of the factory without interference from the management
• Put up notices of the meetings of the union and other activities of the union on the premises of the factory.
• Use the general funds for specific purposes
• Attend the management meeting on behalf of workers.
• Represent the worker in the matter pertains to show cause or labour court.
• Raise funds for political purposes at the option of the members
• Conduct a strike by peaceful methods with permission from all members
• Appoint outsiders as an Executive of the union in certain cases
• Send to the Registrar every year, an audited statement of the receipts and expenditure.
The Payment of Wages Act, 1936
All the workers in a factory are supposed to get wages either weekly or monthly, for the work and the service he has done. The payment of wages to the workers in a particular form and at regular intervals without any unauthorized deductions is the objective of this Act.
Scope of the Act: The provision of this Act applies to workers engages in factories as defined in the Factories Act of 1948 and the persons employed in any railway by contractor or sub-contractor. The Act may also include any persons employed in any industrial establishments.. The provisions of this Act are applicable to those persons whose wages are less than Rs. 400 per month.
The date of payment of wages: The wages of every persons employed in any factory, industrial establishment, or railways, where less than 1000 workers are employed, shall be paid before the expiry of the seventh day after completion of the wage period, generally a month. The wages for a month, for example, shall be paid before the seventh day of the next month. If the workers employed in a factory are more than 1000, the wages shall be paid within 10th day of the next month. The wages of a terminated person shall be settled his account by the next work day after such termination.
Authorized Deductions: The Act authorizes an employer to make deductions from wages for the specific purposes only such as fine, absence from duty, damage to or loss of goods or money, where such damage is due to the negligence or default on the part of the employee, housing accommodation supplied by the employer and such amenities / services provided by the employer as the State Government may authorize.
• The fines shall be imposed by the employer with the due approval of the State Government after serving proper notice to the employee, about the fine.
• Fines shall not be imposed on any employee unless he has been given an opportunity to show cause why the fine should not be imposed on him.
• No fine shall be imposed on persons below the age of fifteen years.
• A fine imposed on any employee in any wage period shall not exceed an amount of half an anna or three naye paise in the rupee of the wages payable to him for the period.
• The fine so imposed shall be recovered in installments or after the expiry of sixty days from the day on which it was imposed.
• The amount of fines so collected from time to time from various employees shall be utilized only for such purposes as are beneficial to the employees, as prescribed by the authorities.
The Workmen’s Compensation Act, 1923:
With the installation of machineries operated by electrical powers, the number of accidents in factories has also increased considerably. Many times, workers lost their fingers, sometimes their hands, feet and on many occasions, their lives while working on machines. This has caused the loss of earnings for their dependents and they are left to starve.
On such occasions, it is quite natural that the employer purely on humanitarian point of view provides some compensation to such workers or their dependents. On the economic ground, neither the society nor the employers were at ready to take the liability of payment of any compensation. However, some enlightened employer did pay compensation to their employees when they suffered accidents, but a large majority was not willing to accept this responsibility. The workers could not claim compensation as a matter of right since he was on the weaker side. Even when the compensations are paid, the amount paid was not satisfactory and there were difference of opinion between the employer and the employer as regards the correctness or fairness of the amount paid.
In order to provide some bases for a statutory claim for compensation to be paid to the disabled factory worker, Workmen’s Compensation Acts have been passed in almost all the countries.
Employer’s Liability for Compensation: When a personal injury is caused to a worker by an accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provision of this Act.
When Employer is not Liable: At some times, the employer is not liable if –
1. The injury results in a partial or total disablement of the worker for less than 3 days,
2. If the injury caused to the worker directly after having been under the influence of drinks or drugs
3. If the injury can be directly attributed to the willful disobedience by the work of an order expressly given
4. To the willful removal or disregard by the worker of any safety guard or other device which he knew to have been provided for the purpose of security his safety.
Occupational Diseases: If a worker is engaged continuously for not less than six months in any employment which involves health hazardous in nature, and gets contacts any disease specified in the Schedule as an occupational diseases, the contacting of such a disease shall be regarded as an injury by accident and shall be deemed to have arisen out of and in the course of employment. The State Government may add to the list of schedules and specify the corresponding disease after giving three months notice in the Gazette.
The injuries for the purpose of this Act have been classified as Death, Permanent total disablement, Permanent partial disablement and Temporary disablement – partial or total. The Act provides for compensation for these categories of injuries in the Schedules I to IV. A worker who has given notice of an accident shall submit himself to a medical examination by the qualified medical practitioner at the cost of the employer. When a worker who receives half monthly payments under this act due to above injuries, shall submit himself to such medication examination from time to time till the medical examiner certifies him to be fit to works. If worker refuses to submit himself to such a medical examination without sufficient cause, his right to compensation shall be suspended.
The Employees State Insurance Act, 1948:
1. The implementation of Workmen’s Compensation Act experienced that the benefits offered to any workers in many cases did not reach them due to various reasons:
2. The claim for compensation for injury had to be filed in an ordinary court of law. The lack of finance made impossible for a worker to file such a suit and fight for it.
3. The employer, through his expert legal advice, proves that the accident did not arise out of and in the course of employment
4. Or some times that the accident took place due to worker concerned being under the influence of alcohol or drug at the time of accident
5. Or may be due to his negligence or his disobedience of obeying for the safety rules.
6. In such cases, the workers were generally unwilling to go to court of law and preferred to accept whatever compensation employers chose to pay out of a sense of pity or charity. The Employees’ State Insurance Act of 1948 was framed to prevent such victimization of the worker by the employer.
Contribution: Every person who are employed for wages in any factory or establishment, to which this Act applies, shall be insured. The insured workers whose wages are more than one rupee per day, shall pay his contribution to the Employees’ State Insurance corporation at the rates specified in the Act.
Benefits under the Act:
The insured persons or their dependants shall be entitled to many benefits:
Sickness Benefits: In case of sickness as certified by a duly appointed medical practitioner, the insured person shall get the periodical payments.
Maternity benefits: Periodical payments in case of confinement to an insured woman certified to be eligible for such payment by an authority specified in this Schedule.
Disablement benefits: Periodical payment to an insured persons suffering from disablement as a result of an injury sustained in the course of his employment.
Dependants’ Benefits: Periodical payments to such dependants of an insured person who dies as a result of an injury sustained in the course of his employment.
Medical Benefits: Free medical check up and treatment are extended to the insured person and the Corporation, with the permission of the Government of India, could extend medical benefits to his dependants.
A person who claims for sickness or disablement benefit must observe that:
1. He shall remain under the medical treatment at dispensary, hospital, clinic or other institution and observe the instructions of the medical officer in charges of his case.
2. He shall not while under the treatment, do anything which might delay his chances of recovery.
3. He shall not leave the area in which medical treatment provided without prior permission of the medical officer or such authority.
4. He shall allow himself to be examined by any duly appointed medical officer.
The Act also provides for penalties when a person makes a false statement for the purpose of causing any increase in the payment or benefit or causing any payment where no payment or benefit is authorized, etc.
The Industrial Disputes Act, 1947:
The Industrial Disputes, strikes and lock-outs were not very common occurrences in India till 1914. During the Great War of 1914 – 1918, the strike came to be regarded as a weapon of industrial warfare. During the war, the cost of living went on rising, but the wages did not keep pace with it. This gave rise to serious pain among industrial workers and led to a series of strikes, notably in Mumbai Textile Industries.. In addition to low wages, there were many other causes which were partly responsible for the outbreak of strikes during that period. The more important of these were long hours of work, bad working conditions, insanitary housing conditions, absence of any provision for compensation for injuries sustained during the course of employment, absence of the right to form a trade union, ill treatment of workmen, officials, etc.
The important provisions of the Industrial Disputes Act of 1947 are:
• If any industrial dispute exists or is planned or sensed, the appropriate Government may by order in writing, refer the dispute to a Board for promoting a settlement or refer to the court of Inquiry and to a Tribunal for Arbitration.
• When either or both of the parties apply to the Government to refer the dispute to a Board, Court or Tribunal, the person applying should represent majority of each party.
• If a dispute has been referred to a Board or a Tribunal, the Government may prohibit the continuance of any strike or lock out in connection with such a dispute.
• A settlement arrived at in the course of conciliation proceedings under the Act, or an award declared by the Government, shall be binding on all the parties to the dispute for 6 months.
• An award declared by the Government shall come into operation for a period of one year.
• Workers employed in public utility industries shall not go on a strike and the employers in such industries shall not resort to lock outs
- Without giving a fourteen days’ notice and before the period of notice expires, or
- During the pendency of conciliation proceedings.
• Workers employed in any industrial establishment shall not go on strike
- During the pendency of conciliation proceedings
- During the pendency of proceeding before a Labour court, Tribunal or National Tribunal
- During a period in which a settlement or a award is in operation.
The Indian boilers Act, 1923:
1. An owner of a boiler shall not use it or permit to be used
2. Unless it has been registered in accordance with the provisions of this act,
3. In case of a boiler transferred from one State to another, until the transfer has been reported in the prescribed manner
4. At a pressure higher than the maximum pressure recorded in such certificate
5. Unless the boiler is in charge of a person holding a certificate of competency.
The Indian Electricity Act, 1910:
The act relates to the supply and use of electricity energy. The State Government may, on an application made in the prescribed form and on payment of prescribed fees, grant a license to supply energy in any specified area and also lay the electric supply lines.
Conclusion:
The rules and regulations governing the small scale industries shall ensure healthy growth and rapid growth and ensure that standard of goods and procedures or instructions are improved. The rules and regulations ensure steady and rapid growth of small scale industries, develop new products and markets, produce quality goods, and promote healthy development of human resources. Since small industries are located nearer to the natural resources and human resources, they do not pollute or degrade the ecosystem or employ labour and cheat the consumer on all counts. Therefore, the Rules and Regulations are the basic components of small scale industries.