Registration of Establishments

The requirement to state inter-State migrant workers at the point of registration is deliberate and connects to Chapter XI. The failure to know where migrant workers were employed was the central administrative problem of 2020, and the Code answers it by asking at registration.

Note the threshold for this Chapter. The second proviso to section 2(1)(v) provides that for the purposes of Chapter II, an establishment under limbs (i), (ii) or (iii) is an establishment though the number employed is ten or more, notwithstanding the factory threshold in clause (w). So registration bites at ten, even though "factory" needs twenty.

Section 3(3): registration, and deemed registration

On receipt of the application the registering officer shall register the establishment and issue a certificate of registration electronically, in the prescribed form, within the prescribed time and subject to prescribed conditions.

The proviso, and this is the provision to quote. If the registering officer fails to register, or to entertain the application, within the prescribed period, then:

• the establishment shall be deemed to have been registered immediately on the expiry of that period;
• the electronic certificate of registration shall be auto generated; and
• the responsibility of such failure shall be on the registering officer.

Section 3(4) and (5): changes and closure

Section 3(4), change. Any change in the ownership or management, or in any of the particulars in sub-section (2), occurring after registration, shall be intimated electronically within thirty days, and the registering officer shall then amend the certificate electronically.

Section 3(5), closure. Within thirty days of the closing of the establishment the employer shall:

• (a) inform the closing; and
• (b) certify payment of all dues to the workers employed in the establishment,

to the registering officer, who shall on receiving that information and certificate remove the establishment from the register and cancel the certificate within sixty days.

The proviso mirrors section 3(3). If he fails to cancel within those sixty days, the certificate is deemed cancelled, the cancellation is auto generated, and the responsibility of the failure is on the registering officer.

Clause (b) is the one to notice. An employer closing down must certify that all dues to workers have been paid. Closure is not simply an administrative deregistration; it is conditioned on a statement about the workers' money.

Section 3(6): misrepresentation and fraud

If an employer:

• (a) has obtained registration by misrepresentation or suppression of any material fact; or
• (b) has obtained registration so fraudulently or otherwise that the registration has become useless or ineffective to run the establishment,

then the consequences differ, and this is where students go wrong.

For clause (a): the misrepresentation or suppression is deemed to be a contravention of the Code for prosecution of the employer under section 94, without affecting the registration and the running of the establishment.

For clause (b): the registering officer may, after giving the employer an opportunity to be heard, revoke the registration by order, and the revocation process shall be completed within sixty days from the facts coming to his notice.

So misrepresentation gets a prosecution but not revocation; the establishment keeps running. Only the second and narrower case, where the registration has become useless or ineffective, brings revocation, and then only after a hearing and within sixty days.

Section 3(7): the bar on employing anyone

No employer of an establishment who:

• (a) has not registered the establishment; or
• (b) has not appealed under section 4 against a cancellation under sub-section (5) or a revocation under sub-section (6), or whose appeal has been dismissed,

shall employ any employee in the establishment.

This is the sharpest sanction in Chapter II. It is not a fine; it is a prohibition on operating at all. And note the structure of clause (b): an employer whose registration is cancelled or revoked may keep employing while his appeal is pending, and must stop if he does not appeal or the appeal fails.

Section 3(8): establishments already registered

Notwithstanding anything in the Code, an establishment already registered under:

• (a) any Central Labour law; or
• (b) any other law notified by the Central Government which applies to an establishment in existence at the commencement of the Code,

shall be deemed to have been registered under this Code, subject to the condition that the registration holder provides the details of the registration to the registering officer within the prescribed time and form.

Compare the proviso to section 3(1) of the Social Security Code, which deems an existing registration to be registration under that Code and requires nothing further. Here the deeming is conditional on furnishing the details. The two Codes differ, and the difference is examinable.

Section 4: appeal

Section 4(1). Any person aggrieved by an order made under section 3 may, within thirty days from the date the order is communicated, appeal to an appellate officer notified by the appropriate Government.

The proviso. The appellate officer may entertain an appeal after those thirty days if satisfied that the appellant was prevented by sufficient cause from filing in time.

Section 4(2). On receipt of the appeal the appellate officer shall, after giving the appellant an opportunity of being heard, dispose of it within thirty days of receipt.

Thirty days to appeal and thirty days to decide. That symmetry is easy to remember and easy to state.

Section 5: notice of commencement and cessation

Section 5(1). No employer of an establishment being a factory or mine, or relating to contract labour or building or other construction work, shall use the establishment to commence the operation of any industry, trade, business, manufacturing or occupation without sending notice of that purpose, in the prescribed form and manner, to the prescribed authority and within the prescribed time; and shall also intimate the cessation of it.

Section 5(2). The notice or intimation shall be given electronically.

Note that section 5 does not apply to every establishment. It is confined to a factory, a mine, contract labour, and building or other construction work, which are the four highest risk categories.

A worked example

Rehan opens a chemicals unit in March 2026 with twelve workers, using power. He engages contract labour and employs four workers recruited from Odisha.

Must he register? Yes. The establishment came into existence after the commencement of the Code and the Code applies to it. He must apply electronically within sixty days from the date of applicability: section 3(1).

But his unit is not a factory, having only twelve workers. That does not matter for registration. By the second proviso to section 2(1)(v), for the purposes of Chapter II an establishment counts at ten or more, notwithstanding the factory threshold in clause (w).

What must the application state? The prescribed particulars including information relating to the employment of inter-State migrant workers: section 3(2). His four Odisha workers must be disclosed.

He applies on day seventy. The registering officer may still entertain it, on payment of the prescribed late fees: the proviso to section 3(1).

The officer does nothing for months. On the expiry of the prescribed period the establishment is deemed registered, the certificate is auto generated, and the responsibility for the failure is on the registering officer: the proviso to section 3(3).

Must he give any other notice? Yes. His unit relates to contract labour, so section 5(1) forbids him to commence operations without sending the prescribed notice to the prescribed authority, electronically, and requires him to intimate cessation.

He later changes the managing partner. He must intimate that change electronically within thirty days, and the officer amends the certificate: section 3(4).

Two years on he closes the unit. Within thirty days of closing he must inform the closure and certify payment of all dues to the workers; the officer then removes the establishment from the register and cancels the certificate within sixty days, failing which cancellation is deemed and auto generated: section 3(5).

Suppose instead it emerges that he understated his headcount when registering. That is misrepresentation or suppression of a material fact under section 3(6)(a). It is deemed a contravention for prosecution under section 94, but it does not affect the registration or the running of the establishment.

Suppose the registration was obtained so fraudulently that it is useless to run the establishment. Then section 3(6)(b) applies and the registering officer may revoke it, but only after giving him an opportunity to be heard, and the process must be completed within sixty days of the facts coming to notice.

His registration is revoked. May he keep working? Only if he appeals under section 4. Section 3(7)(b) forbids him to employ any employee where he has not appealed, or where the appeal has been dismissed. He must appeal within thirty days, and the appellate officer must decide within thirty days of receipt after hearing him.

Now take a unit that existed before the Code and was registered under the Factories Act. By section 3(8) it is deemed registered under this Code, provided it furnishes the details of that registration to the registering officer in the prescribed time and form.

What this does NOT mean

Registration is not required at the factory threshold. For Chapter II the count is ten or more, by the second proviso to section 2(1)(v).

A late application is not fatal. The registering officer may entertain it on payment of late fees.

Misrepresentation does not by itself cost the registration. Section 3(6)(a) leads to prosecution under section 94 without affecting the registration and the running of the establishment.

Revocation is not summary. It requires an opportunity to be heard and must be completed within sixty days.

An earlier registration is not automatically enough. Section 3(8) deems it, subject to the condition that the details are furnished to the registering officer.

Limits and criticism

"Responsibility shall be on the registering officer" states no consequence. The provisos to sections 3(3) and 3(5) fix the blame and say nothing about what follows from it.

Section 3(7) is a heavy sanction with no gradation. An establishment which has not registered may not employ anybody, whatever the reason for the delay and however many people already work there.

Section 3(6)(b) is vague. Registration obtained "so fraudulently or otherwise that the registration has become useless or ineffective to run the establishment" is a test with no clear content.

Section 5's notice duty is confined to factories, mines, contract labour and construction, so other establishments commence operations with no notice to anybody beyond registration.

Quick revision

• Section 3(1) and (2): apply electronically within sixty days, late applications on late fees; particulars must include inter-State migrant workers. Threshold for Chapter II is ten or more, by the second proviso to section 2(1)(v).
• Section 3(3): certificate issued electronically; on the officer's failure, deemed registration, auto generated certificate, responsibility on the officer.
• Section 3(4): thirty days to intimate a change of ownership, management or particulars.
• Section 3(5): thirty days to inform closure and certify payment of all dues to workers; cancellation within sixty days, else deemed and auto generated.
• Section 3(6): (a) misrepresentation or suppression, prosecution under section 94 but registration unaffected; (b) fraud making the registration useless, revocation after a hearing, within sixty days.
• Section 3(7): an unregistered employer, or one who has not appealed or whose appeal has failed, shall not employ any employee.
• Section 3(8): registration under another Central labour law is deemed registration, subject to furnishing the details.
• Section 4: thirty days to appeal to a notified appellate officer, extendable for sufficient cause; decided within thirty days after a hearing.
• Section 5: for a factory, mine, contract labour or building or other construction work, notice before commencing operations and intimation of cessation, electronically.

Test yourself

1. Within what time must an establishment apply for registration, and to whom? Within sixty days from the date the Code becomes applicable to it, electronically, to the registering officer appointed by the appropriate Government: section 3(1). A late application may be entertained on payment of prescribed late fees.

2. The registering officer does nothing. What happens? On the expiry of the prescribed period the establishment is deemed to have been registered, the electronic certificate is auto generated, and the responsibility for the failure is on the registering officer: the proviso to section 3(3).

3. What must an employer do when he closes an establishment? Within thirty days of the closing, inform the registering officer of the closure and certify payment of all dues to the workers employed. The officer must then remove the establishment from the register and cancel the certificate within sixty days, failing which cancellation is deemed and auto generated: section 3(5).

4. Distinguish the consequences of clause (a) and clause (b) of section 3(6). Under clause (a), registration obtained by misrepresentation or suppression of a material fact is deemed a contravention of the Code for prosecution under section 94, without affecting the registration or the running of the establishment. Under clause (b), where the registration was obtained so fraudulently or otherwise that it has become useless or ineffective to run the establishment, the registering officer may revoke it, after giving the employer an opportunity to be heard, the process to be completed within sixty days.

5. An employer's registration is revoked. May he continue to employ his workers? Only while an appeal under section 4 is pending. Section 3(7)(b) forbids him to employ any employee where he has not preferred an appeal against the revocation, or where the appeal preferred has been dismissed.

6. An establishment was registered under the Factories Act before this Code. Must it register again? No, but it must act. Section 3(8) deems it registered under this Code, subject to the condition that the registration holder provides the details of the registration to the concerned registering officer within the prescribed time and form.

7. Which establishments must give notice before commencing operations? Those being a factory or a mine, or relating to contract labour or building or other construction work: section 5(1). The notice, and the intimation of cessation, must be given electronically.