Shops and Establishments Act

As an enthusiastic entrepreneurs, one must get used to learn new and complicated concepts with the growing time, at least until such time as their operations are large enough to support a person or firm managing legal compliance. The one term that gets discussed very often is Shops & Establishments Registration and  its compliance.

In this blog, we will cover following three points:

1) What is Shop and Establishment Act

2) Registration under Shop and Establishment Act

3) Compliance under Shop and Establishment Act

So Lets get Started;

First question is what is Shop and Establishment Act? Even if you attempt to open a bank account, the manager will likely ask you for Shops & Establishments registration. Each state tends to have its own version "like Maharashtra (Bombay Shops and Establishments Act, 1948), Bangalore (Karnataka Shops & Commercial Establishments Act, 1962), Delhi ( Delhi Shops and Establishments Act, 1954) etc." of this Act, which differ slightly with each other.

The Shops and Establishments Act regulates conditions of work, lists rights of employees in the unorganised sector and provides a list of obligations for every employer. This Act restricts timing of opening and closing hours of Shops and Commercial Establishment. It keeps control on daily and weekly hours of work of the employees, interval for rest, Spread over. It provide overtime wages, paid holiday and Leave with wages to employees. It also provides Health and Safety.

Now, we are moving to know how to get registration under Shops and Establishments Act. Every Shops and Establishments has to take registration under Shops and Establishments Act.

In order to ensure ease of doing Business the Government of many state has simplified the process of issuing the registration of the shops and establishments like:

⇒ labour Department of State Government of Maharashtra has issued Notification dated. 18.05.2015 regarding issuance of the Registration Certificate and Renewal of Registration under the Maharashtra Shops and Establishments Act, 1948 within Seven working days from the date of receipt of the application. Failing of which the Registration or Renewal of the Registration of the establishment shall be deemed to have been granted and 

⇒ labour Department of State Government of Haryana has issued Notification dated 19-06-2017 that concerned registering authority for registration of shops and establishments under Punjab Shops and Commercial Establishment Act, 1958 shall grant the deemed registration certificate and subsequent renewals through E- Services within one day from the day of application and eliminated the requirement of inspection prior to the registration 

Since, as per Ministry of Corporate affairs Data base, most number of companies is registered in Maharashtra, therefore i have explained procedure for registration under Bombay Shops and Establishments Act, 1948 

Note: there is very less difference between registration under different states 

Compliance under Delhi Shop and Establishment Act, 1954 and Rules

The Maharashtra Assembly  passed new Shops and Establishment (Regulation of Employment and Conditions of Service) Bill on 9 August 2017  It will now require clearance from the legislative council, after which it will go to the President approval as the subject is from the concurrent list. 

Delhi is the Second state after Maharashtra which covers most number of registered companies, therefore please refer below compliance under Delhi Shop and Establishments  Act, 1954 and rules made thereunder.

⇒ Changes: It shall be the duty of the occupier to notify to the Chief Labour Inspector, on a prescribed form any change of any information provided while application for registration within thirty days after the change has taken place

⇒Working hours: No employee must work for more than 9 hours per day and 48 hours per week. Work can be extended to 54 hours week subject to the conditions that the aggregate hours so worked shall not exceed 150 hours in a year for stock taking or making of accounts if the employer has provided for notice of such extension 3 days in advance to the Chief Labour Inspector. 

For employing young persons (The Act defines "young person" as a person who is not a child and has not completed his eighteenth year of age ): No young person shall be required or allowed to work for more than 6 hours a day. There must be an interval of at least half an hour for rest or meals after he has continuously worked for 3.30 Hrs on any day. Such young persons and also women, shall not be engaged in work for more than 8 hours per day or between 9 p.m. and 7 a.m. during the summer season and between 8 p.m. to 8a.m. during the winter season "The summer season starts from 1st April and ends on 30th September while the winter season starts from 1st October and ends on 31st March of the following year"

⇒Holidays (Close day): Before the employer declares the holiday or a close day he must display a notice of close day prior to close day in the premises. Every shop and commercial establishment shall remain closed on the close day. Close days will be declared by the government. Different close days can be prescribed for different classes of establishment or different area.There should be a weekly holiday for all employees for which no wages will be deducted.

⇒Privilege leave: Every employee shall be entitled to a 

• long privilege leave of 15 days or more after every twelve months; that of 5 days for every four months, of continuous employment 
• yearly sick leaves of 12 days or more.
• A casual sick leave shall be available to the employee after every month of work.
•  If the person is a caretaker or a watchman his privilege leave will be for 30 days or more.

⇒Timely payment of wages: Wages should be paid, on fixed intervals which are pre-decided and which should not exceed one month. When an employer imposes fine which shall be deducted from his wages  for any damage or loss caused by the employee he must be informed about the reasons of such fine or deduction in writing and shall be recorded in the register kept for this purpose.

⇒Letters of Appointment: Employer to furnish letters of appointment to employees.The object of the enactment is to furnish an accurate proof of employment to an employed person.Letter of appointment should contain the following particulars:-

• Name of employer.
• Name, if any, and the postal address of the establishment.
• Name, father's name and the age of the person employed.
• Hours of work.
• Date of Appointment.
• Rate of wages or salary.
• Designation or nature of work for which employed; whether employed for clerical, supervisory, managerial, manual work, etc.
• Any other concession or benefits, if any, that may be special to his appointment.

⇒Over Time: any person employed on overtime shall be entitled to remuneration for such overtime work at twice the rate of his normal remuneration calculated by the hour. Overtime will be calculated as prescribed under the act.

⇒Restriction on double employment: No person shall work for the  two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed under this Act.

⇒Interval for rest and meals: no period of continuous work shall exceed 5 hours before employee had an interval for rest and meals of at least half an hour. The time for such interval shall be fixed by the employer and intimated to the Chief Inspector a week before such fixation and shall remain operative for a period of not less than three months.

⇒Period of work inclusive of rest ( Spread over): The periods of work on any day of an adult person  inclusive of his interval for rest or meals, they shall not spread over for more than 10.30 Hrs in any commercial establishment or for more than 12 hours in any shop.

⇒Prohibition of employment of children: No child shall be required or allowed to work win any establishment ( Although a child has been defined as a person who has not completed his twelve year of age but it is to be read as fourteen year because of Child Labour (Prohibition & Regulation) Act, 1986 ).

⇒Weekly holiday: Every employee shall be allowed at least 24 consecutive hours of rest (weekly holiday) in every week. No deduction from salary is to be made for this rest.

⇒Time for payment of wage: The wages of every employee in any shop or establishment shall be paid on a working day before the expiry of the 7th day of the last day of the wage period in respect of which the wages are payable.

⇒Recording of deductions: All deductions and realizations from wage shall be recorded in a register maintained in a form as may be prescribed.

Deduction include 

(i) Fines

(ii) Deductions for absence from duty;

(iii) Deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;

(iv) Deductions for house accommodation supplied by the employer;

(v) Deductions for such amenities and services supplied by the employer as the Government may by general or special order authorize;

(vi) Deductions for the recovery of advances or for adjustment of over-payments of wages, provided that such advances do not exceed an amount equal to wages for two calendar months of the employed person and; in no case, shall the monthly installment of deduction exceed one-fourth of the wages earned in that month.

(vii) Deductions of income-tax payable by the employed person;

(viii)Deductions required to be made by order of a Court or other competent authority;

(x) Deductions for payment to co-operative societies or to a scheme of insurance approved by the Government.

⇒Cleanliness: The premises of every establishment shall be kept clean and free from arising from any drain, unpleasant and harmful odour, discharge nuisance and shall be cleaned at such times and by such methods as may be prescribed. These methods may include lime washing, colour washing, painting and disinfecting.

⇒Lighting and ventilation: The premises of every establishment shall be kept sufficiently lighted and ventilated during all working hours. Suitable arrangements shall be made for supply of drinking water to the employees.

⇒Precautions against fire: In every establishment, except such establishments or class of establishments as may be prescribed, such precautions against fire shall be taken as may be prescribed.

⇒Notice of dismissal: No employer shall dispense with the services of an employee who has been in his continuous employment for not less than 3 months, without giving such person at least 1 months' notice in writing or wages in lieu of such notice 

Provided that such notice shall not be necessary where services of such employee are dispensed with for misconduct, after giving him an opportunity to explain the charge or charges against him in writing.

No employee who has put in 3 months' continuous service shall terminate his employment unless he has given to his employer a notice, of at least one month, in writing. In case he fails to give 1 month's notice he will be released.

⇒Records: The occupier of every shop or commercial establishment shall, in the prescribed form and in the prescribed manner, keep display in the shop or establishment a notice setting forth the close day.

The occupier of any shop or establishment, about the business of which persons are employed, shall in the prescribed form and in the prescribed manner keep a record of the hours worked and the amount of leave taken by, and of the intervals allowed for rest and meals to, every person employed about the business of the shop or establishment, and particulars of all employment overtime shall be separately entered in the record.

Form G:   The register of employment and wages, duly bound and pages serially numbered

Form H:  Register of employment where the opening and closing hours are ordinarily uniform

Form  I:     Register of wages and record of leave 

Form J:     In the case of an establishment which is not required to observe a close day the occupier has to display in a conspicuous place in his establishment a notice in Form 'J' 

Form K:  Every occupier shall exhibit in his establishment  close day, the daily working hours and usual period of the rest, interval fixed for employees 

⇒Closing of establishment: The occupier shall within 15 days of his closing the establishment, notify to the Chief Inspector in writing accordingly.The Chief Inspector shall on receiving the information remove such establishment from the register of establishments.

CONCLUSION 

As an employee, it is essential for you to know about your rights and entitlements that have been granted to you by law. As an employer also, one should be aware of the limitations that have been imposed by law.

****

Writer –  Akash Vij

Email ID: Akashvij20@gmail.com

Disclaimer:  The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. For Authentication of Data/Information provided please refer the respective acts, law, rules, regulations and notifications. This is only a knowledge sharing initiative and writer do not intend to solicit any business or profession. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.