India: Proposed Law On Shops & Establishments In Maharashtra: A Step In The Right Direction?

Last Updated: 19 September 2017
Article by Anshul Prakash, Parag Bhide and Shivani Vij

Most Read Contributor in India, August 2018

Introduction

The Government of Maharashtra, vide notification dated 7 September 2017 had notified the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (2017 Act). It shall come into force on a date to be specified by the State of Maharashtra in the Official Gazette (Effective Date) and from the Effective Date, the 2017 Act will repeal the Maharashtra Shops & Establishments Act 1948 (1948 Act).

Amendment

The key highlights of the 2017 Act are:

  • Applicability: The 2017 Act applies to and regulates the establishments employing ten or more workers. Therefore, the requirements under the 2017 Act will not apply to establishments employing less than ten workers. The only requirement for establishments with less than ten workers is intimation of commencement of business to the 'facilitator' appointed under the 2017 Act (Facilitator).

This is in contrast with the 1948 Act which applies to all establishments irrespective of the number of workers employed.

  • Employer: The definition of employer has been expanded under the 2017 Act to specifically include (i) a partner, in case of a firm or members in case of an association, (ii) director in case of a company, and (iii) designated persons in case of Government owned or controlled entities.
  • Registration & Labour Identification Number: To register an establishment, the employer shall now submit an online application within sixty days from commencement of the 2017 Act or commencement of business. Upon acceptance of the application and verification, a Labour Identification Number (LIN) will be issued by the Facilitator.

The 1948 Act does not provide for an online system of registration. Also, 1948 Act mandates registration within thirty days from commencement of business.

  • Registration Certificate: The validity of registration certificate granted by the Facilitator under 2017 Act shall be for a period requested by the applicant, for a maximum of ten years. Further, the time period for submitting an online application for renewal of the certificate is not less than thirty days.

Validity period of the certificate under the 1948 Act is between one to three years, with a prescribed period of fifteen days for making an application for renewal.

  • Cancellation of registration: A new provision providing for cancellation of registration has been introduced. Registration obtained through misrepresentation or suppression of material facts or by submitting false or forged documents or false declaration or by fraud, gives ground to the Facilitator to cancel registration of the establishment.
  • Notifying closure of establishment: The employer shall notify the Facilitator within thirty days of closure of business, as opposed to ten days prescribed under 1948 Act.
  • Opening/closing hours: The 2017 Act provides that opening and closing hours of different classes of establishments, different premises, shopping complex or malls, will be prescribed by the State Government by notifying separate rules.

This is opposed to the 1948 Act, which provides a uniform opening time, unless prescribed otherwise, for all establishments.

  • Prohibition of discrimination against women: A new provision prohibiting discrimination against women workers, and separately regulating their conditions of work has been introduced. The provision prohibits discrimination of women in matters of recruitment, training, transfers or promotion or wages. Further, it provides that woman workers shall not be allowed to work except between 7:00 am and 9:30 pm. However, women workers may be allowed to work beyond these hours, if they consent and the employer ensures adequate facilities to provide them with adequate security.

The 1948 Act only provides that women shall not be allowed to work beyond 9:30 pm, though certain industry exceptions were made by the Government in the Schedule to the 1948 Act.

  • Leave: A new provision has been introduced, which entitles every worker to eight days of casual leave in a year. The workers can accumulate earned leave up to a maximum of forty five days. Further, every worker who has worked for a period of two hundred and forty days or more shall be allowed paid leave for a number of days calculated at the rate of one day for every twenty days of work performed during the previous year.
  • Registers: Registers can now be maintained electronically as well, by the employers.
  • Welfare measures: The 2017 Act creates a specific obligation on every employer to take measures relating to the health and safety of the workers, including prevention of accidents. As opposed to the 1948 Act, these measures have been broadened further, and include cleanliness, lighting, ventilation and prevention of fire, first aid, canteen, crèche facilities, etc.
  • Facilitators: The 2017 Act provides for appointment of 'Facilitators', instead of 'Inspectors' to enforce the provisions of the 2017 Act. In addition to the duties of the Inspectors, the Facilitators shall also advice the employers and workers for complying with the provisions of the 2017 Act.
  • Penalties: The 2017 Act provides for enhanced penalties for violation to a maximum fine of INR 100,000 and in the case of a continuing contravention, with an additional fine which may extend to INR 2,000 every day.

This is in stark contrast to the 1948 Act, which provides for a minimum fine of INR 1,000 and a maximum fine of INR 5,000 for violations.

Comment

The 2017 Act has been introduced as one of the major labour law reforms in the State of Maharashtra, a state with a significant concentration of service industry with an objective to provide an industry friendly approach and to bring ease in compliance regarding labour and employment laws in the state.

As a welcome change, the regulation of conditions of service and employment under the 2017 Act does not apply to establishments employing less than ten workers. This comes as a significant compliance relief to smaller entities and multi-nationals who intend to or have just set up its presence in India. Another significant amendment is that for establishments with more than ten workers, the registration can now be obtained for ten years at a stretch. As a practice of good governance, the process of registration and maintenance of registers has been made electronic, and LIN has been introduced. Penalties for violation of the 2017 Act have also been made stringent.

Taking cue from market demand, the Government is expected to come up with separate opening and closing hours for different classes of establishments such as malls and shopping complexes. Though a specific prohibition on discrimination with women workers has been introduced, an option has been provided to extend their working hours with their consent. This reflects a great degree of flexibility being introduced in the functioning of shops and establishments in the State of Maharashtra.

The provisions on leave have been streamlined by providing casual leaves and earned leaves to workers. Further, the welfare provisions have also been widened, with a specific duty created on the employer to provide adequate health and safety measures. The 2017 Act has thus incorporated provisions to improve the conditions of service for the workers.

Lastly, taking cue from the concept of facilitators introduced under the Labour Code on Wages Bill 2017, the 2017 Act has attempted to achieve better implementation of the provisions of the statute by introducing Facilitators, who, in addition to powers of search and seizure, will also be responsible to advise workers and employers for better compliance.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions