legal req for enterprise

1. Legal requirements for
establishment of a new
unit
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2. Factories Act, 1948
Applicability of the Act
Any premises with 10 or more persons with the
aid of power or 20 or more workers without aid
of power working on any day preceding 12
months, wherein manufacturing process is being
carried on.
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3. Welfare measures
Employer to
ensure Washing facilities Safety measures
health of • Facilities for storing Fencing of machinery
and drying clothing. • Work on or near
workers • First-aid appliances- Registration
pertaining to machinery In motion. & Renewal of
one first aid box (not •Employment
less than one) for Factories
prohibition of young
every 150 workers persons on dangerous
Cleanliness • Canteens when there machines,
Disposal of are 250 or more •Striking gear and
wastes and workers. • To be granted by
devices for cutting off
effluents • Shelters, rest rooms power.
Chief Inspector o
Factories on
Overcrowding and lunch rooms when •Casing of new submission of
Artificial hum there are 150 or more machinery. prescribed form,
idification workers. •Prohibition of fee and plan.
• Creches when there employment of women
Lighting are 30 or more women and children near
Drinking workers. cotton-openers.
water • Welfare office when • Hoists and lifts.
Spittoons there are 500 or more
workers
3

4. Employment of young persons
Prohibition of employment of young
children e.g. 14 years.
Non-adult workers to Carry tokens
e.g. certificate of fitness.
Working hours and over time of adults First-aid appliances-one first aid
Weekly hours, not more than 48. box (not less than one) for every
Daily hours not more than 9 hours. 150 worker
Intervals for rest at least 1/2 hour on working for
5 hours.
Overlapping shifts prohibited.
Extra Wages for overtime double than normal
rate of wages. Annual leave with wages
Restrictions on employment of women before 6
A.M. and beyond 7 P.M A worker having worked
for 240 days @ one day for
every 20 days and for a
child one day for working of
4 15 days
Accumulation of leave for

5. • Muster Roll • Register of Wages
• Workers Register • Register of Accidents
• Overtime Register and Dangerous
• Advance Register Occurrences
• Register for Fine • Bond Inspection Book
• Register for Deductions • Register of Cleaning
and White Washing
• Record of Examination
of Parts of Machinery
There is another Act known as Shops & Establishment Act
which is applicable to shops and business undertakings
employing 5 or more persons.
5

6. Employees Provident Fund & Miscellaneous
Provisions Act, 1952 the main objective of
 The Act was enacted with
making some provisions for the future of industrial
workers after their retirement and for their dependents
in case of death.
 It provides insurance to workers and their
dependents against risks of old age, retirement,
discharge, retrenchment or death of the workers.
 It is applicable to every establishment which is
engaged in any one or more of the industries specified
in Schedule I of the Act or any activity notified by
Central Government in the Official Gazette and
employing 20 or more persons.
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7. (EPFO).
 EPFO is one of the largest provident fund institutions
in the world in terms of members and volume of
financial transactions that it has been carrying on.
 It is an autonomous tripartite body under the control
of Ministry of Labour with its head office in New Delhi.
 It however, relaxes a factory or establishment for an
initial period of 3 years from commencement of
business if the number of employees is more than 50
and for an initial period of 5 years if the number of
employees is less than 50.
 The minimum contribution payable by the employer is
12% of the basic salary contribution and Dearness
Allowance.
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 The employee also makes an equal contribution. The

8.  The act was enacted to provide for the payment of
bonus to persons employed in certain establishments on
the basis of profits or productivity and for the matters
connected therewith. every other establishment in which
twenty or more persons are employed
 The Actfactory as
every applies to:
on any day during an accounting year.
defined under However, the Government may, after
giving two months' notification in the
the Factories Act, Official Gazette, make the Act
1948 applicable to any factory or
establishment employing less than
twenty but not less than ten persons.
 The Act is enforced through the Central Industrial
Relations Machinery (CIRM).
 CIRM is an attached office of the Ministry of Labour
and is also known as the Chief Labour Commissioner
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(Central) [CLC(C)] Organisation.

9.  An employer shall pay
minimum bonus at the rate of
8.33% of the salary or wages
 the term 'employee' means earned by an employee in an
"any person employed on a year or one hundred rupees,
whichever is higher. Here it is
salary or wage not not required that the employer
exceeding three thousand has any allocable surplus in
and five hundred rupees the accounting year.
per month in any industry
to do any skilled or
unskilled manual,
supervisory, managerial,  If an employee has not
completed fifteen years of age
administrative, technical or at the beginning of the
clerical work for hire or accounting year, the minimum
reward, whether the terms bonus payable is 8.33% or
of employment be express sixty rupees, whichever is
or implied". higher.
 An employee is entitled to
be paid by his employer a
bonus in an accounting
year subjected to the
condition that he/she has
worked for not less than 30
working days of that year.
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10. Payment of Gratuity Act , 1972
BENEFITS
The quantum of gratuity is to
APPLICABILITY ELIGIBILTY be computed at the rate of
15 days wages (7 days
• Every factory (as • Any person wages in case of seasonal
defined in Factories employed on establishments) based on
Act), mine, oilfield, wages/salary. rate of wages last drawn by
plantation, port and the employee concerned for
railway. • At the time of every completed year of
• Every shop or retirement or service or a part thereof
resignation or on exceeding 6 months.
establishment to which
Shops & Establishment superannuation, an
Act of a State applies in employee should The total amount of gratuity
which 10 or more have rendered payable shall not exceed the
persons are employed prescribed limit.
continuous service of
at any time during the not less than five
year end. years, In case where higher benefit
• Any establishment of gratuity is available under
employing 10 or more • In case of death or any gratuity scheme of the
persons as may be disablement, the Co., the employee will be
notified by the Central
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gratuity is payable, entitled to higher benefit
Government. even if he has not
• Once Act applies, it completed 5 years of

11. • Gratuity = Monthly Salary x 15 days x No. of
Calculation yrs. of service
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of Gratuity • Max. Gratuity payable under the Act is Rs.
3,50,000/- (w.e.f. 24-9-1997)
Penal Provisions
Non payment of gratuity payable under the Act is
punishable with imprisonment up to 2 years
(minimum 6 months) and/or fine up to RS
20,000/-.Other contravention/offenses attract
imprisonment up to 1 year and/or fine up to RS
10,000.
 In case where higher benefit of gratuity is
11 available under any gratuity scheme of the Co.,
the employee will be entitled to higher benefit

12. Employees’ State Insurance Act
It provides benefits to employees.
In case of sickness, maternity and employment
injury and for certain other matters in relation there
to.
The existing rates of employee’s contribution vary
according to wages.
 It shall apply to factories employing 20 or more
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people.

13. Payment of Wages Act, 1936
The payment of wages to workers employed in certain specified industries and to ensure a
speedy and effective remedy to them against illegal deductions and/or unjustified delay
caused in paying wages to them.
It applies to the persons employed in a factory, industrial or other establishment, whether
directly or indirectly, through a sub-contractor.
Further, the Act is applicable to employees drawing wages upto Rs. 1600/- a month.
State Governments are responsible for it in factories and other industrial establishments.
The person responsible for payment of wages shall fix the wage period upto which wage
payment is to be made. No wage-period shall exceed one month.
All wages shall be paid in current legal tender, that is, in current coin or currency notes or
both.
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All payment of wages shall be made on a working day.

14.  Although the wages of an employed person shall be paid to
him without deductions of any kind,
 The Act allows deductions from the wages on the account
of the following :-
 fines;
 absence from duty;
 damage to or loss of goods expressly
entrusted to the employee;
 housing accommodation provided by the
employer;
 recovery of advances or adjustment of
over-payments of wages;
 for repayment of advances from any
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provident fund;
 income-tax;

15. Minimum Wages Act ,1948
Minimum Wages shall be paid in Cash
Wage has to be paid without any deductions
This Act prescribes minimum wages in all enterprises, and in some
cases those working at home per the schedule of the Act
Central and State Governments can and do revise minimum wages at
their judgment
The minimum wage is further classified by nature of work, location
and numerous other factors at the carefulness of the government.
The minimum wage ranges between 143 to 1120 per day for work
in the so-called central sphere
15State governments have their own minimum wage schedules

16. The Indian Partnership Act, 1932
It provides rules relating to foundation of
legal partnership.
It states the rights and duties of the
partners amongst themselves and
outside
It lays down rules regarding the
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dissolution of partnership.

17. The Income Tax Act, 1911
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 The Act governs the levy of income tax in India.
 It defines various terms and expressions
 It states the liability of a person to pay income tax.
 The rates and pattern of taxation, however, are
changed from time to time.

18. Central Excise Law
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 Central Excise Law is levied on manufacturer or
production of goods.
 The liability of paying the central excise is on the
manufacturer.
GOODs means:
 every kind of movable property
 other than actionable claims and money
 which are agreed to be severed before sale or under the
contract of sale.

19. Sales tax:
19
 It is applicable on actual sales.
 This tax paid to a governing body by a seller for
the sales of certain goods and services.
 Usually laws allow the seller to collect funds for the
tax from the consumer at the point of purchase.
 Sales tax is tax levied by state and centre.
 Tax charged by state is called LST or Local Sales
Tax .
 And tax charged by Centre is known as CST or
Central Sales Tax.

20. Labor laws for enterprise establishment
Workmen’s Compensation Act ,1923
• This Act compensates a workman for any
injury suffered during the course of his
employment or to his dependents in the
case of his death.
• The Act provides for the rate at which
compensation shall be paid to an
employee.
• This is one of many social security laws in
India. 20

21. Industrial Employment (Standing orders) Act ,1946
APPLICABILTY
 Every industrial establishment
wherein 100 or more (in many
States it is 50 or more).
 Any industry covered by Bombay
Industrial Relations Act, 1946.
 Industrial establishment covered by
This Act Industrialemployers in industrial establishments to
M.P. requires Employment
define and post the Act, 1961. of employment by issuing so-
(Standing Orders) conditions
called standing orders.
These standing orders must be approved by the government
and duly certified. These orders aim to remove flexibility from
the employer in terms of job, hours, timing, leave grant,
productivity measures and other matters.
The standing orders mandate that the employer classify its
employees, state the shifts, payment of wages, rules for
vacation, rules for sick leave, holidays, rules for termination
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22. Industrial Disputes Act of 1947
Object of the Act
Provisions for investigation and settlement of industrial
disputes and for certain other purposes
APPLICABILITY
industrial establishment carrying on
any business, trade, manufacture or distribution of goods and
services irrespective of the number of workmen employed therein.
Every person employed in an establishment for hire or reward
including contract labour, apprentices and part time employees to
do any manual, clerical, skilled, unskilled, technical, operational or
supervisory work, is covered by the Act. This Act though does not
apply to persons mainly in managerial or administrative capacity,
persons engaged in a supervisory capacity and drawing > 10,000
The Act also executing managerial functions and persons subject to
p.m or
lays down:
The Army Act, Air Force and Navycompensation to the service or on
provision for payment of Act or those in police workman
account of closure or layaoff or retrenchment
officer or employee of prison.
The procedure for prior permission of appropriate Government
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for laying off or retrenching the workers or closing down industrial
establishments

23. to the employee with a copy of the notice to appropriate
government office seeking government's permission,
explain valid reasons for termination, and wait for one
month before the employment can be lawfully
terminated. The employer may pay full compensation
for one month in lieu of the notice.
Furthermore, employer must pay an equivalent to 15
days average pay for each completed year of
employees continuous service. Thus, an employee
who has worked for 4 years in addition to various
notices and due process, must be paid a minimum of
the employee's wage equivalent to 60 days before
retrenchment, if the government grants the employer a
permission to layoff.
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24. SPECIFIC LEGALITIES: FOOD PROCESSING
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25. FOOD LAWS AND REGULATIONS
To meet a country’s sanitary and phytosanitary
requirements, food must comply with the local laws and
regulations to gain market access.
These laws ensure the safety and suitability of food for
consumers, in some countries; also govern food quality
and composition standards.
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26. a country may adopt international norms developed by the
Codex Alimentarius Commission of the Food and Agriculture
Organization of the United Nations and the World Health
Organization;
or a country may also have its own suite of food regulations
26

27. Usually more than one agency is involved in food
regulations e.g. health and agriculture, they may
have centralized or regionally controlled food
regulations, and different agencies may be
involved in enforcement activities
27

28. TYPES OF FOOD SAFETY AND QUALITY
STANDARDS THAT APPLY IN MOST COUNTRIES:
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29. Food Safety and Standards Act
The Indian Parliament has recently passed the Food Safety and
Standards Act, 2006 that overrides all other food related laws. It
will specifically repeal eight laws:
•The Prevention of Food Adulteration Act, 1954
•The Fruit Products Order, 1955
•The Meat Food Products Order, 1973
•The Vegetable Oil Products (Control) Order, 1947
•The Edible Oils Packaging (Regulation) Order, 1998
•The Solvent Extracted Oil, De oiled Meal, and Edible Flour
(Control) Order, 1967
•The Milk and Milk Products Order, 1992
•Essential Commodities Act, 1955 relating to food
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30. The Act establishes a new national regulatory body, the Food Safety
and Standards Authority of India, to:
 develop science based standards for food and
 regulate and monitor the manufacture, processing, storage,
distribution, sale and import of food so as to ensure the availability
of safe and wholesome food for human consumption.
All food imports will therefore be subject to the provisions of the
Act and any rules and regulations made under the Act.
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31. Prevention of Food Adulteration Act
A basic statute (Prevention of Food Adulteration Act (PFA)
of 1954 and the PFA Rules of 1955, as amended) protects
India against impure, unsafe, and fraudulently labelled
foods.
The PFA standards and regulations apply equally to
domestic and imported products and cover various aspects
of food processing and distribution.
These include :
food colour,
preservatives,
pesticide residues,
packaging and labelling, 31
regulation of sales

32. Standards of Weights and Measures Act, 1976
Standards for weights and measures are administered by the
Ministry of Consumer Affairs, Food and Public Distribution under
the Standards of Weights and Measures Act, 1976 and related
rules and notifications.
All weights or measures must be recorded in metric units and
certain commodities can only be packed in specified quantities
(weight, measure or number).
These include baby and weaning food, biscuits, bread, butter,
coffee, tea, vegetable oils, milk powder, and wheat and rice flour.
32

33. The Pulses, Edible Oilseeds and Edible Oils
(storage)order, 1977
Empowers the government
to put maximum stock limits on wholesalers and retailers of
pulses, oilseed and oils and
is designed to maintain supplies and
ensure equitable distribution and
availability at fair prices of these items
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34. Fruit Products Order, 1955
The fruit and vegetable processing sector is regulated by the
Fruit Products Order, 1955 (FPO), which is administered by the
Department of Food Processing Industries.
The FPO contains specifications and quality control
requirements regarding the production and marketing of
processed fruits and vegetables, sweetened aerated water,
vinegar, and synthetic syrups.
All such processing units are required to obtain a license under
the FPO, and periodic inspections are carried out.
Processed fruit and vegetable products imported into the 34
country must meet the FPO standards.

35. Meat Food Products Order, 1973
Regulations for the production of meat products are covered by
the Meat Food Products Order, 1973.
The Order:
Specifies sanitation and hygiene requirements for
slaughterhouses and manufacturers of meat products.
Contains packing, marking and labeling provisions for
containers of meat products.
Defines the permissible quantity of heavy metals,
preservatives, and insecticide residues in meat products.
35

36. The Directorate of Marketing and Inspection at the Ministry of
Agriculture is the regulatory authority for the order, which is
equally applicable to domestic processors and importers of meat
products.
36

37. Livestock Importation Act, 1898
India has established procedures for the importation of livestock
and associated products under the Livestock Importation Act,
1898.
Under the regulations, the import of meat products, eggs and
egg powder and milk products require a sanitary import permit
from the Department of Animal Husbandry, Dairying and
Fisheries at the Ministry of Agriculture.
A detailed import risk analysis is carried out, taking into account
the disease situation prevailing in the exporting country
compared with the disease situation in India.
37

38. Milk and Milk Products Order
The production, distribution and supply of milk products is
controlled by the Milk and Milk Products Order, 1992.
The order sets sanitary requirements for dairies, machinery, and
premises, and includes quality control, certification, packing,
marking and labeling standards for milk and milk products.
Standards specified in the order also apply to imported products.
The Department of Animal Husbandry, Dairying and Fisheries at
the Ministry of Agriculture is the regulatory authority.
38

39. Essential Commodities Act, 1955: The main objective of
the Act is to regulate the manufacture, commerce, and
distribution of essential commodities, including food. A number of
Control Orders have been promulgated under the provisions of
this Act. These are:
 Standards of Weights and Measures Act, 1976 and the Standards
of Weights and Measures (Packaged Commodities) Rules, 1977:
The Act governs sale of packaged commodities and provides for
mandatory registration of all packaged products in the country.
 Consumer Protection Act, 1986: The Act provides for
constitution of District Forum/State/National Commission for
settlement of disputes between the seller/service provider and the
39
consumer.

40.  The Infant Milk Substitutes, Feeding Bottles and Infant Foods
(Regulation of Production, Supply and Distribution) Act, 1992 and
Rules 1993: This Act aims at promoting breast feeding and ensuring
proper use of infant milk substitutes and infant food.
 The Insecticide Act, 1968: The Act envisages safe use of
insecticides so as to ensure that the leftover chemical residues do
not pose any health hazard.
40

41. LEGISLATIONS AND REFORMS IN INPUT MANAGEMENT
•Fertilizer legislations The Industries (Development and
Regulation) Act, 1951 (IDRA).
•Seeds Act, 1966
•Protection of Plant Varieties and Farmers’ Rights Act, 2001
•Pests and pesticide legislations pesticides is regulated under the
Insecticides Act, 1968 and Insecticides Rules, 1971
•Genetically modified organisms (GMOs) and agricultural
biotechnology are regulated products in India since 1989.
41

42.  Export (Quality Control and Inspection) Act, 1963: The Act aims
at facilitating export trade through quality control and inspection
before the products are sold to international buyers.
 Environment Protection Act, 1986: This Act incorporates rules for
the manufacture, use, import and storage of hazardous
microorganisms / substances / cells used as foodstuff.
 Pollution Control (Ministry of Environment and Forests): A no-
objection certificate from the respective State Pollution Control
Board is essential for all dairy plants.
42

43. (i) Industrial Licences: No licence is required for setting up a dairy
plant in India. Only a memorandum has to be submitted to the
Secretariat for Industrial Approvals (SIA) and an acknowledgement
obtained. However, a certificate of registration is required under
the Milk and Milk Products Order (MMPO), 1992.
43

44. Voluntary Standards
There are two organizations that deal with voluntary
standardization and certification systems in the food sector.
I. The Bureau of Indian Standards (looks after standardization
of processed foods) and
II. The Directorate of Marketing and Inspection
(standardization of raw agricultural produce is under the
purview of the)
44

45. Bureau of Indian Standards (BIS)
The activities of BIS are two fold the formulation of Indian
standards in the processed foods sector and the implementation
of standards through promotion and through voluntary and third
party certification systems.
BIS has on record, standards for most of processed foods. In
general, these standards cover raw materials permitted and their
quality parameters; hygienic conditions under which products are
manufactured and packaging and labelling requirements.
Manufacturers complying with standards laid down by the BIS
can obtain and "ISI" mark that can be exhibited on product
packages.
BIS has identified certain items like food colours/additives,
45
vanaspati, and containers for packing, milk powder and
condensed milk, for compulsory certification.

46. Directorate of Marketing and Inspection (DMI)
The DMI enforces the Agricultural Produce (Grading and Marking) Act,
1937.
Under this Act, Grade Standards are prescribed for agricultural and allied
commodities.
These are known as "Agmark" Standards. Grading under the provisions of
this Act is voluntary.
 Manufacturers who comply with standard laid down by DMI are allowed to
use "Agmark" labels on their products.
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47. 47 Thank you…..