Legal

legal req for enterprise

1. 1 Legal requirements for establishment of a new unit

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. 2

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4. Working hours and over time of adults Weekly hours, not more than 48. Daily hours not more than 9 hours.  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. Restrictions on employment of women before 6 A.M. and beyond 7 P.M 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. First-aid appliances-one first aid box (not less than one) for every 150 worker Annual leave with wages A worker having worked for 240 days @ one day for every 20 days and for a child one day for working of 15 days Accumulation of leave for 30 days. 4

5. 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 Act was enacted with the main objective of 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. 6

7. The Act is administered by the Government of India through the  Employees' Provident Fund Organisation (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. The employee also makes an equal contribution. The Act, however, does not specify a maximum contribution. 7

8. Payment of Bonus Act , 1965 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. The Act applies to: 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 (Central) [CLC(C)] Organisation. It is headed by the Chief Labour Commissioner (Central). every factory as defined under the Factories Act, 1948 every other establishment in which twenty or more persons are employed on any day during an accounting year. However, the Government may, after giving two months' notification in the Official Gazette, make the Act applicable to any factory or establishment employing less than twenty but not less than ten persons. 8

9. According to the Act, the term 'employee' means "any person employed on a salary or wage not exceeding three thousand and five hundred rupees per month in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied". 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. An employer shall pay minimum bonus at the rate of 8.33% of the salary or wages earned by an employee in an year or one hundred rupees, whichever is higher. Here it is not required that the employer has any allocable surplus in the accounting year. If an employee has not completed fifteen years of age at the beginning of the accounting year, the minimum bonus payable is 8.33% or sixty rupees, whichever is higher. 9

10. Payment of Gratuity Act , 1972 10

11. 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 available under any gratuity scheme of the Co., the employee will be entitled to higher benefit 11

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 people. 12

13. Payment of Wages Act, 1936 13

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 provident fund; income-tax; 14

15. Minimum Wages Act , 1948 15

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 dissolution of partnership. 16

17. The Income Tax Act, 1911 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. 17

18. Central Excise Law 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. 18

19. Sales tax: 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. The latter is charged when goods move out of a state. 19

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 M.P. Industrial Employment (Standing Orders) Act, 1961. This Act requires employers in industrial establishments to define and post the conditions of employment by issuing so-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 amongst others. 21

22. Industrial Disputes Act of 1947 Object of the Act Provisions for investigation and settlement of industrial disputes and for certain other purposes The Act also lays down: The provision for payment of compensation to the workman on account of closure or lay off or retrenchment The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments Unfair labour practices on part of an employer or a trade union or workers. 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 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison. 22

23. The employer is required to give notice of termination 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. 23

24. Specific Legalities: FOOD processing 24

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. 25

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: 28

29.   Food Safety and Standards Act The Indian Parliament has recently passed the Food Safety and Standards Act, 200 6 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 29

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. 30

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 , regulation of sales 31

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 33

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 country must meet the FPO standards. 34

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 consumer. 39

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. 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, vanaspati , and containers for packing, milk powder and condensed milk, for compulsory certification.   45

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. 46

47. Thank you….. 47