Legal Compliances under employment law in India with regard to starting a new Factory

The following approvals are required to be taken when starting a new factory:

1. The Site plan must be approved by the Chief Inspector of Factories. An application seeking the permission for the site on which the factory is to situated must be made in Form I, accompanied by all the documents stated in Rule 3 of the Maharashtra Factories Rules, 1963 (hereinafter the “Rules”).

2. Approval by the Chief Inspector of a Certificate of Stability sent to him by a competent person in respect of every work of engineering construction, as provided in Rule 3A. For this purpose a competent persons is any one of the following:

  • A Member / Associate Member of the Institute of Civil Engineers;
  • A Member of the Institute of Structural Engineers;
  • A Member or Associate Member of the Institute of Engineers (India), in the Civil Engineering or Structural Engineering branch;
  • A Civil Engineer of the Public Works, not below the rank of Executive Engineer

3. The Factory License is issued under Rule 6 of the Maharashtra Factories Rules. The application for obtaining the license must be accompanied by certain documents which are as under:

  • Detailed plans showing the scale, elevation, etc. of the site on which factory is to be situated or, extension of a factory, a flow chart of the manufacturing process with a brief description of the process in its various stages, etc. as laid down in Rule 3;
  • Certificate of Stability under Rule 4;
  • The application in Form 2 for registration accompanied by an application for grant of license for a period not exceed ten years in Form 3 and fees under Rule 5;

4. As per Rule 22, if the drainage system is proposed to be connected to the public sewerage system, prior approval of the arrangement must be obtained from the Local Authority. For areas notified under the Water Pollution Act, the approval must be obtained from the Maharashtra Pollution Control Board. For factories that do not fall within the category of those aforementioned, the approval of the Health Officer (Municipal Health Officer or District Health Officer) is necessary for the arrangements for disposal of trade wastes and effluents. It needs to be checked if the factory is to be located in an area which is notified under the Water (Prevention and Control of Pollution) Act, 1974.