Factory under labour law includes tobacco processing and supervised workers where management control is established.

The Supreme Court treated premises as a factory under the Factories Act where twenty or more persons worked under management control and the activities constituted a manufacturing process. Moistening, stripping stalks, separating damaged leaves, bundling and packing tobacco were held to fall within treating, adapting, breaking up and packing articles for use or transport. The decisive test for worker status was a contract of service with sufficient supervision and control by the management, supported by evidence of regular engagement, supervisory oversight and provident fund and inspection records. On that basis, the persons were workers and the premises qualified as a factory, so the appeal failed.

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Issues: Whether the premises at Eluru constituted a factory within the meaning of the Factories Act, 1948, namely whether the persons working there were workers and whether the activities carried on amounted to a manufacturing process.

Analysis: The statutory definition of factory in Section 2(m) of the Factories Act, 1948 depends on the presence of twenty or more workers and the carrying on of a manufacturing process. The processing undertaken at the premises included moistening, stripping stalks, separating damaged leaves, bundling and packing tobacco for transport to the factory at Bombay. These activities fell within the wide definition of manufacturing process in Section 2(k)(i) because they involved treating, adapting, breaking up and packing articles for use and transport. On the question whether the persons were workers, the decisive test was whether there existed a contract of service and a relationship of master and servant, with sufficient supervision and control by the management. The evidence showed regular engagement of more than twenty persons, supervision by the management's clerk, and no rebuttal by the appellant. The provident fund returns and inspection evidence supported the conclusion that the persons were employed in the establishment under the management's control.

Conclusion: The persons working at the premises were workers and the activities carried on were a manufacturing process, so the premises were a factory. The appeal failed.

Ratio Decidendi: For the purposes of the Factories Act, a premises is a factory where twenty or more persons work under the management's control and the activities carried on amount to treating, adapting, breaking up or packing articles with a view to their use or transport.

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