One of the major regulation that most business shall comply is the Shop and Establishment Act. It is enacted by every state in India. The Act is designated to define and regulate the payment of wages, hours of work, leave, holidays, terms of service, and other working conditions of the people who are employed in the shops and commercial establishments within a state. Regulated by the Department of Labor, the area of regulation is much beyond the premises of any trade or business. It also extends to societies, charitable trusts, printing establishments, educational institutions, banks, and other places. In this regard, any shop or commercial establishment must apply for a Shop and Establishment Act License with the Chief Inspector. The application is filled in a prescribed format that is different for each state and must contain information regarding the name of the employer, name, category, and address of the establishment, number of employees, and other specific information.
The assent of the President of India, the Act was first published in the Madhya Pradesh Gazette on the 3rd of October, 1958. It has been subsequently amended four times in 1967, 1982, 1990, and 1995. The Act aims to provide regulation of working conditions and employment in the shops, commercial establishments, residential hotels, restaurants, eating houses, theatres, and other public places of amusement and entertainment. Since its enactment in 1958, the Act has been extended to the whole of Madhya Pradesh. In 2000, the Government of India reorganized the state of Madhya Pradesh to create a new state of Chhattisgarh. Seven eastern districts of the old state were constituted in the new one, and the act continued to enact on the new found boundaries of the state of Madhya Pradesh.
The definitions of certain terms that are commonly used have been defined specifically. This includes; apprentice, child, closed, wage, commercial establishment, day, employee. Employer, establishment, factory, goods, holiday, inspector, labour commissioner, leave, local authority, manager, members of the family of an employer, opened, period of work, register of establishment, registration certificate, residential hotel, restaurant or eating-house, shop, spread-over, theatre, week, year, and young person.
The Act is not applicable to persons whose work is inherently occurring at irregular intervals such as a traveler, canvasser, a watchman or a caretaker. Moreover, the persons employed in the offices of the Union or state government or local authorities are excused. This includes the employees of the Reserve Bank of India, the State Bank of India, and the Life Insurance Corporation.
According to the Act: 'establishment' means a shop, commercial establishment, residential hotel, restaurant, eating-house, theatre, or another place of public amusement or entertainment to which this Act applies and includes such other. establishment of like nature as the Government may, by notification declare to be an establishment for the purposes of this Act.
Registration of establishments is necessary and is applicable for all those who are eligible. Within 30 days from the date of enactment of the Act, the owners of the establishments are required to send their application for registration to the Inspector of the area. Along with it, a fee is a charge. The application must contain:
The name of the employer
The name of the manager and the persons holding various positions of management.
The postal address of the business establishment and its date of commencement of operations.
Category of the establishment.
Other particulars that may be required.
On the receipt of the application and the fees, it is the duty of the Inspector to check the application. Once being satisfied with the correctness of the details provided, registration of the establishment is done. In case of any doubt or difference in opinion occurs between an employer and the Inspector at any time, the Inspector may refer to the Labour Commissioner who shall decide the category of the establishment. Further, the registration certificate is issued to the employer that must be displayed at the premises of the establishment.
The registration certificate is issued at least for the period of 5 years. After this, it shall be renewed on payment of the fee prescribed by the Inspector. Both the registration and renewal fee shall not exceed two hundred and fifty rupees per establishment. However, since the process is lengthy and may require professional help, there may exist a professional help fee that one may pay.
Moreover, any change in respect of the information contained in the statement or application provided to the Inspector shall be communicated to the Inspector. It is the duty of the employer to make the changes in the register of the establishment within 7 days of the change. In case, the employer chooses to close the establishment, the employer shall notify the Inspector within 10 days of closing his establishment. Once the Inspector is satisfied with the correctness of the statement provided, the Inspector shall remove the name of the establishment from the register of establishments. The registration certificate is canceled thereof.
Shops and Commercial Establishments: The government shall fix different working hours or closing hours for different classes of shops and commercial establishments depending upon their area of operation and time of the year. The establishments shall open not be opened earlier than the hours prescribed by the government. It shall be kept open only till the time fixed by the government. Hawking is prohibited before and after closing hours of the shop. The employees in such establishments are not required to work for more than 48 hours in a week. The spread-over of an employee shall not exceed 12 hours a day.
Residential hotels, Restaurants, and Eating houses: The Act provides that no restaurants or eating houses shall remain open for service before 5 a.m. and later than 1:30 a.m. Beyond this time, no goods shall be sold in any such establishments except for consumption within premises. No employee should work for more than 48 hours and nine days a week. The employee must be given at least one day as a holiday in a week. Also, it is the duty of the employer to issue an identity card to every employee which shall be kept with the employee at the time of duty.
Theatres or Other Places of Public Amusement or Entertainment: the closing hours of theatres or any other public places of public amusement and entertainment shall not exceed 1 a.m. after the hours fixed for closing, no goods shall be sold except for consumption on the premises. The spread over of an employee must not exceed 12 hours a day and must be given one holiday in a week. It is the duty of the employer to provide an identity card to the employee with his or her details furnished on it.
No child shall work in any establishment shall be allowed to work. For this matter, a child has been defined in the Act as a person who has not attained the age of 14 years. Also, young persons and women should work only from 7 a.m to 9 p.m. The case may be different if a child, young person or a woman is a family member of the employer.
Moreover, young person or women are not allowed to perform work which has been declared as dangerous by the State Government. This includes work that involves danger to life, health or morals.
An employee is eligible for casual and privilege leaves after 12 months of continuous employment. The privilege is to take a leave for a total period of one month. Every year casual leaves shall not exceed 14 days. An employer cannot deny paying an employee half of the total amount due to him for the period of such leave.
The premises of every establishment must be kept clean such that it is free from any kind of dirt and nuisance. Moreover, proper ventilation is important in every establishment. To ensure the safety of employees, the employer must provide precautionary measures against the emergence of fire in the establishment.
Subject to the jurisdiction, the Act enables the local authority to enforce the Act within the area. For this purpose, the government is enabled to exercise effective control over a local authority in the performance of duties. A local authority is empowered under the provisions of this Act to make bye-laws. These laws so created must be consistent with the provisions of the act.
Every Shop and Establishment local authority has a sufficient number of inspectors appointed with powers assigned to them within the local limits. It is the duty of the local authority to submit an annual report to the government within 3 months after the closure of every year. On the other hand, if the local authority defaults, the government shall appoint some person to perform it.
If an employer fails to send the statement to the shop and establishment inspector within the prescribed time period or if any establishment has any contravention of any section or order, it shall be considered as an offense. If any person contravenes, it is considered a punishable offense with fines extending to one hundred rupees.
If an employer or manager makes an entry that is false in any material particular with the intention of deception, then it is considered an offense. On conviction, there are chances that the person convicted is given imprisonment up to one year and a fine. Depending upon the severity of the offense, both may also be awarded.
Besides this, there are penalties imposed for obstructing an inspector which is punishable by a fine. In some offenses, under Sections 47, 48, and 49 of the Act, summons are to be served to the accused. If an accused is pleaded guilty and remits the sum, no further proceedings shall take place in respect of that offense.
There are also provisions for maintenance of registers and records. This includes the display of notices that must be kept on the premises of the establishment. Further, wages for overtime are also specified such it should be twice that of ordinary wage rate. Also, it is the duty of the employer to provide Provident Fund to its employees. The amount should ideally be equal to the amount contributed by the employee that should not exceed 6.5% of his wages.
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