Factories Act, 1948 is the principal legislation governing the conditions of work in manufacturing establishments in India, covering working hours, health and safety standards, welfare facilities, employment of women and young persons, overtime, and annual leave. Under Indian law, a "factory" is defined as any premises where 10 or more workers are working with the aid of power, or 20 or more workers are working without the aid of power, in any manufacturing process — and the Act is to be subsumed under the Occupational Safety, Health and Working Conditions Code, 2020 once that Code is operationalised.
Legal definition
Section 2(m) of the Factories Act, 1948 defines "factory":
Section 2(m): "Factory" means any premises including the precincts thereof — (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on.
Key provisions:
| Subject | Provision | Requirement |
|---|---|---|
| Working hours (adult) | Section 51 | Maximum 48 hours per week |
| Daily working hours | Section 54 | Maximum 9 hours per day |
| Overtime rate | Section 59 | Twice the ordinary rate of wages |
| Spread over | Section 56 | Maximum 10.5 hours including intervals |
| Weekly holiday | Section 52 | One day off per week (substitution allowed) |
| Annual leave | Section 79 | 1 day per 20 days worked (adults); 1 per 15 days (children) |
| Women — night work | Section 66 | Prohibited between 7 PM and 6 AM |
| Health provisions | Sections 11-20 | Cleanliness, ventilation, lighting, drinking water, latrines, spittoons |
| Safety provisions | Sections 21-41 | Fencing, hoists, pressure plant, fire, dangerous operations |
| Welfare provisions | Sections 42-50 | Washing facilities, first aid, canteen (250+ workers), crèche (30+ women) |
Occupier's duties (Section 7A): The occupier of every factory must ensure the health, safety, and welfare of all workers while they are at work. This general duty was introduced by the 1987 amendment following the Bhopal gas tragedy.
How courts have interpreted this term
Ardeshir H. Bhiwandiwala v. State of Bombay [(1962) Supp (1) SCR 591]
The Supreme Court held that the definition of "factory" under Section 2(m) must be given a wide interpretation consistent with the protective purpose of the Act. The Court established that the key test is whether a "manufacturing process" is carried on — if any substance or article is made, altered, repaired, adapted, or treated for use, transport, sale, or disposal, the premises qualifies as a factory. Ancillary processes such as packing, sorting, and labelling are part of the manufacturing process.
Nagpur Electric Light & Power Co. v. Regional Director, ESI [(1967) 1 SCR 363]
The Supreme Court held that an electricity generating station is a factory within the meaning of the Act — the generation, transmission, and distribution of electrical energy constitutes a "manufacturing process." The Court adopted a broad interpretation of "manufacturing process" to include any process for making, altering, or adapting any article or substance for use or sale.
Associated Cement Companies Ltd. v. Workmen [(1960) 1 LLJ 559 (SC)]
The Supreme Court held that all workers employed within the precincts of a factory — including those engaged in ancillary activities like loading, unloading, and transportation — are covered by the Factories Act if they are part of the overall manufacturing process or operations connected therewith.
Why this matters
The Factories Act is one of the most widely applied labour statutes in India, governing an estimated 300,000+ registered factories employing millions of workers. Its provisions on working hours (48 hours/week, 9 hours/day) set the baseline for employment conditions in the organised manufacturing sector, and its safety provisions form the primary regulatory framework for preventing industrial accidents.
For employers, compliance with the Factories Act is monitored through the factory inspectorate — inspectors have the power to enter and inspect factories, examine workers, and issue orders for remedying dangerous conditions. Non-compliance with safety provisions can result in prosecution of the occupier and manager, with penalties including imprisonment up to 2 years and fines up to Rs 2,00,000 for first offences, with enhanced penalties for repeat violations.
A recurring compliance issue is the overtime provision. Section 59 mandates double wages for any work beyond 48 hours per week or 9 hours per day. Many factories violate this by recording only 48 hours while workers actually work longer — a practice that exposes the employer to claims for back-overtime, penalties, and prosecution. The overtime cap is 50 hours per quarter (i.e., total hours in a quarter cannot exceed the equivalent of 48 hours per week plus 50 overtime hours).
Related terms
To be subsumed under:
Related legislation:
Related disputes:
Frequently asked questions
What is the definition of a factory under Indian law?
A factory is any premises where 10 or more workers work with the aid of power, or 20 or more workers work without power, in any manufacturing process. The definition focuses on two elements: the number of workers and the existence of a manufacturing process. "Manufacturing process" is defined broadly in Section 2(k) to include making, altering, repairing, breaking up, or otherwise treating any article or substance.
What are the maximum working hours under the Factories Act?
The maximum is 48 hours per week (Section 51) and 9 hours per day (Section 54). The total spread-over (work time plus intervals) cannot exceed 10.5 hours in a day. Workers are entitled to a weekly holiday and overtime at double the ordinary rate for work beyond these limits. These limits apply to adult workers; young persons (15-18 years) have shorter limits.
Is the Factories Act still in force?
Yes. As of March 2026, the Factories Act, 1948 continues to be fully in force. Although the Occupational Safety, Health and Working Conditions Code, 2020 is intended to subsume the Factories Act, the Code has not been notified for implementation. All factories must continue to comply with the Factories Act and the relevant state Factories Rules.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.