Model Shop & Establishment Bill, 2016

  • by IAS Score

The objective is to regulate the conditions of work and employment in shops, commercial

    Cabinet has approved the Model Shops and Establishment (Regulation of Emp & Conditions of Service) Bill 2016.
What is the mandate of the Act? The objective is to regulate the conditions of work and employment in shops, commercial establishments, residential hotels, restaurants, eating houses, theatres and other places of public entertainment.
What were the provisions of the previous Shop and Establishment Act, 1953?
    • IT laid down the hours of work per day and week alongwith guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work.

Other features were:

1. No employee is allowed to work MT 9hrs in a day or for 48 hrs in a week

2. An employee may be allowed to work upto 3 hrs a week over and above this limit and upto 26 hrs or NMT 6 days in a year for purposes of making of accounts, stock taking settlements or prescribed occasions.

3. No employee is allowed to work for more than 5 hrs at a stretch unless he is given rest for half an hour if in case of commercial establishment engaged in manufacturing process, and 1 hr in any other cases.

4. The spread over of an employee in shop will not exceed 11 hrs on any day.

5. Every shop or commercial establishment will remain closed on any one day of the week. The list of closing days to be notified to the Inspector and displayed in the premises of the establishment.

6. Rules for employment of children, young persons and women

7. Lays down the minimum wages to be paid, etc.

What are the salient features of the new Bill? The main features of the model Act are:

1. It will cover only establishments employing 10 or more workers except manufacturing units. The draft law proposes to cover all premises, barring factories, or shops with work related to printing, banking, insurance, stocks and shares, brokerage or theatres, cinema and “any other public amusement” which is currently not covered under the Factories Act 1948.

2. It provides for freedom to operate 365 days in a year and opening/closing time of establishment.

3. Women to be permitted during night shift, if the provision of shelter, rest rooms, ladies toilets, adequate protection of their dignity and transportation, etc., exists.

4. No discrimination against women in the matter of recruitment, training, transfer or promotions.

5. One common online registration through a simplified procedure.

6. Powers of government to make rules regarding adequate measures to be taken by the employer for the safety and health of workers.

7. Clean and safe drinking water.

8. Lavatory, crèche, first aid and canteen by group of establishments, in case, it is not possible due to constraint in space or otherwise by individual establishment.

9. Five paid festival holidays in addition to national holidays, etc.

What are the proposed benefits of the new provisions? At present, states have their own rules related to shops and establishments which cover physical shops or workplaces regardless of the size of the unit. The law lays down statutory obligations and rights of employers and employees.For the first time, godowns, warehouses or workplace related to packaging activities are proposed to be covered under the law, as per the draft model Act. This will bring many e-commerce companies under the labour law rulebooks as many of these companies face problems while operating godowns in various states.

It will lead to increased consumer spending as establishments stay open for longer hours, leading to increased revenue for establishments, and corresponding increase in the tax base for the government. It will generate employment and improve the tax collection of the government.

It also mandates that if women are being employed, facilities like a crèche and cab services should be provided for them. Such a move would have a sweeping effect on the nature of women’s work in the country.

The provision of operating 24X7 is expected to boost up the retail market across the country and will give customer flexibility and convenience to shop any time.

The model law provides for exemption of highly skilled workers (for example workers employed in I.T., Bio-Tech and R&D) from, daily working hours of 9 hrs and weekly working hrs of 48 hrs subject to maximum 125 over-time hrs in a quarter. This flexibility will enable the establishment to better services to their clients who cater to international customers especially in the IT sector.

What are the challenges in implementation? 1. Lack of reliable public transport

2. Women safety issue

3. Sociological impact on the family and value system

4. Criminal activities may increase due to Weak law enforcement

5. Infrastructure to handle the changes are poor

It would bring about uniformity in the legislative provisions, making it easier for all the States to adopt it and thereby ensuring uniform working conditions across the country and facilitate the ease of doing business and generate employment opportunities but the two areas that need urgent reform in all States are provision of reliable public transport and strong law enforcement.