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Small Factories Bill

At present, small and medium enterprises are required to comply with multiple labour laws which takes a toll on such generally resource-strapped enterprises. In an attempt to further strengthen the Government’s mission to promote ease of doing business in India, the Labour Ministry is looking to revive the Small Factories (Regulation of Employment and Conditions of Services) Bill in 2014 (“Small Factories Bill”).


What entities are covered by the Small Factories Bill?


Manufacturing companies which have less than 40 employees in a factory fall within the definition of a ‘small factory’, unless the small factory carries on a hazardous manufacturing process. In case of the later, the existing Factories Act will continue to apply.


What are the basic features of the Small Factories Bill?

  • Small factories will not have to comply with 14 legislations, including the Factories Act, ESI Act, EPF Act and the relevant Shops and Establishment Act.

  • Provisions of various labour laws, such as standards for the wages to be paid to employees, working conditions, facilities on the premises, etc will now be covered in this one Bill for small factories.

  • Employers of such small factories can electronically apply for registration of the factory, notify of the closure, and intimate the authorities of any changes in the ownership.

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