PRMI Reform View

Elimination of Regulations for Declaring Smaller Establishments as Factories (section 5 of Factories Act)
Reform ID		I186
Reform Description		Elimination of Regulations for Declaring Smaller Establishments as Factories (section 5 of Factories Act) Before: Section 05 of Factories Act authorized government to apply the provisions of Factories Act to smaller establishments with five or more employees. After: Through an amendment, section 05 of Factories Act has been amended, thus smaller establishments can no longer be regulated under the Factories Act.
Sector		All Sectors
Beneficiaries		Small industries and Establishments
Jurisdiction/ Location		Islamabad Capital Territory
Department		Labour Department - ICT
Date of Implementation
Details	Difficulty	 Under Section 5 of the Factories Act, the government may apply its provisions to any establishment where 10 or more workers are employed or have been employed on any one day during the twelve months immediately preceding.  This provision was not suitable for small manufacturing units as it would become burdensome for them to comply with the requirements of Factories Act once regulated under same.
	Analysis	It was realized that the section 05 of Factories Act may be amended as it is burdensome for smaller businesses.
	Solution	Accordingly, to reduce regulatory compliance burden on smooth running of business in line with the international best practices, the factories act amended excluding the smaller establishment as factories.
Evidence