Jharkhand Amends Factories Rules, Revising Fees and Strengthening Compliance for Industrial Establishments

The Government of Jharkhand has issued the Jharkhand Factories (Amendment) Rules, 2025, through a notification dated March 28, 2025, exercising powers conferred by Section 112 of the Factories Act, 1948. These amendment rules, which extend to the entire State of Jharkhand, came into force immediately upon their publication in the Official Gazette on April 9, 2025. The amendments primarily focus on updating the fee structures for factory licenses and enhancing the regulatory framework for reporting and compliance by industrial establishments.

A significant change introduced by the new rules is the substitution of Schedules A, B, and C under sub-rule (1) of Rule 5 of the Jharkhand Factories Rules, 1950, which now outline revised scales of fees payable for the grant and annual renewal of licenses for various types of factories. Schedule A details fees for factories defined under Section 2(m) of the Factories Act, 1948, excluding electricity generating and transforming units, with fees varying based on total rated capacity (horsepower) and the maximum number of persons employed. Schedule B specifies fees for electricity generating, transforming, and transmitting stations, categorizing them by installed generating capacity in kilowatts. Schedule C sets a uniform fee of one thousand rupees for factories declared under Section 85 of the Factories Act, 1948, other than electricity-related establishments. Furthermore, the amendment rules revise the fee for the amendment of a license, substituting sub-rule (3) of Rule 6 to fix it at one thousand rupees. Similarly, sub-rule (3) of Rule 8 has been substituted, establishing a fee of one thousand rupees for the transfer of a license, payable by the new occupier (the person who has ultimate control over the affairs of the factory).

The legislation provided: "The manager of every factory shall furnish, to the Chief Inspector not later than the 15th January of the subsequent year to that to which it relates, a return in Form-20; Provided that – (iv) If the annual return is not furnished till 15th January of the subsequent year, the return can be further furnished electronically with penalty of equivalent to 50% of the renewal fees till 31th March & 100% of the renewal fee till 30th June of the subsequent year. The licence shall be liable to be ceased (a) if above return is not uploaded till 30th June of each subsequent year or (b) incorrect / wrong information has been provided in the return." This core provision underscores the enhanced emphasis on timely and accurate submission of annual returns. Rule 100(1), pertaining to annual returns, has been entirely substituted, mandating factory managers to furnish returns in Form-20 to the Chief Inspector by January 15 of the subsequent year. Specific information regarding canteens, crèches, shelters, and rest-rooms is required based on the number of workers or women workers employed. A new proviso introduces a penalty for late submission of annual returns: 50% of the renewal fees if submitted electronically by March 31, and 100% if submitted by June 30. Crucially, a license is liable to cease if the return is not uploaded by June 30 or if incorrect information is provided, though an opportunity to show cause must be given. Reinstatement of a ceased license is possible with the Chief Inspector's approval if the delay was beyond the occupier's control, subject to a fee of two times the annual fee. Appeals against license cessation can be made to the Secretary or Principal Secretary, Department of Labour, within thirty days. Rule 100-A, concerning the closure of a factory or any section thereof, has also been substituted, requiring occupiers or managers to report intended or abrupt closures to the Secretary or Principal Secretary, Department of Labour, and the Inspector, providing reasons, worker numbers affected, and probable closure period in Form 29. Failure to submit a closure report renders the license invalid, and a "closed factory" is defined as one where manufacturing processes have ceased for the last two years. Similar to annual returns, an opportunity to show cause must be provided before license cancellation, and reinstatement is possible under certain conditions, with the Secretary or Principal Secretary, Department of Labour, serving as the final appellate authority for such matters.

The legislative intent behind these amendments is to modernize the regulatory framework governing factories in Jharkhand, ensuring better compliance, transparency, and administrative efficiency. The previous legal position, which likely involved older fee structures and potentially less stringent enforcement mechanisms for reporting, is now updated to reflect contemporary needs. The amendments address statutory gaps related to the timely submission of crucial operational data and the clear definition of consequences for non-compliance. By introducing a tiered penalty system for late annual returns and explicitly linking license validity to reporting, the rules aim to mitigate issues of delayed or inaccurate information from factories. The revised fee schedules are designed to align with current economic realities and administrative costs. Furthermore, the detailed procedures for license cessation, cancellation, reinstatement, and the establishment of clear appellate authorities provide a robust enforcement mechanism, ensuring that both occupiers and the regulatory body have defined pathways for action and redressal. These changes are expected to streamline the process of factory regulation, promote a culture of timely compliance, and ensure that the state has accurate data on industrial activity.

Keywords: Jharkhand Factories Rules, Factories Act 1948, Labour Law, Industrial Compliance, License Fees, Annual Returns, Factory Closure, Regulatory Amendments, Jharkhand Government, Labour Department

Geo Tags: India, Jharkhand District: Not Applicable