Section 78 of the Factories Act 1948 - Application of Chapter
Section 78 formed the opening provision of Chapter VIII of the Factories Act, 1948 dealing with annual leave with wages. It protected a worker from losing a more favourable leave entitlement available under another law, an award, a settlement, an agreement, or a contract of service.
What Section 78 provided
Chapter VIII of the Factories Act dealt with annual leave with wages. Section 78 defined how that Chapter interacted with other sources of employment rights. Its central purpose was protective: the statutory leave provisions were not intended to reduce a better right already available to a worker.
Section 78 - Application of Chapter
Sub-section (1): The Chapter was not to operate to the prejudice of any right to which a worker was entitled under another law or under an award, agreement including a settlement, or contract of service.
The proviso dealt with a situation where an award, agreement, settlement, or contract provided longer annual leave with wages than Chapter VIII. In that case, the worker's quantum of leave was governed by the more favourable instrument. For matters not covered there, or dealt with less favourably, the provisions of sections 79 to 82 applied so far as applicable.
Sub-section (2): Chapter VIII did not apply to workers in a factory of a railway administered by the Government where those workers were governed by leave rules approved by the Central Government.
Meaning and effect of Section 78
- Better rights were protected: Chapter VIII did not take away a superior leave benefit available from another applicable source.
- Longer annual leave prevailed: Where an award, settlement, agreement, or service contract granted a longer period of annual leave with wages, that longer entitlement governed the quantity of leave.
- Statutory safeguards could fill gaps: Sections 79 to 82 could continue to apply to matters omitted from the more favourable instrument or treated less favourably there.
- Railway factory exception: Government railway factory workers governed by Central Government-approved leave rules were excluded from Chapter VIII.
Related provisions of Chapter VIII
Section 78 operated with the succeeding provisions on annual leave with wages. In particular, Section 79 dealt with annual leave with wages, while Section 80 dealt with wages during the leave period. The former Chapter also included provisions concerning advance payment, recovery of unpaid wages, rule-making, and exemptions.
Amendment history
Chapter VIII, including Section 78 in its substituted form, was introduced by Act 25 of 1954 with effect from 7 May 1954. The Factories (Amendment) Act, 1976 further amended Section 78 with effect from 26 October 1976, including the reference to an agreement including settlement, substitution of the proviso, and the wording concerning railway factories.
Present law after the OSHWC Code 2020
The Occupational Safety, Health and Working Conditions Code, 2020 consolidates central legislation relating to occupational safety, health, and working conditions. Its recorded enforcement date on India Code is 21 November 2025. For current compliance, readers should therefore consult the Code and the applicable rules and notifications rather than relying only on Section 78 of the repealed Factories Act.
The repeal does not necessarily erase the legal effect of everything previously done under the former enactments. The Code contains repeal and savings provisions, and the General Clauses Act principles may also be relevant to accrued rights, liabilities, proceedings, rules, orders, and actions arising under the earlier law. The applicable transitional position depends on the facts and the relevant notification or rule.
Official legal sources
India Code - Factories Act, 1948
India Code - Occupational Safety, Health and Working Conditions Code, 2020
This page is an explanatory legal reference. For a current compliance issue, verify the latest Central and State rules, notifications, exemptions, and transitional provisions applicable to the establishment.