Shops & Establishments Act

1. Introduction :

1.1 The Bombay Shops and Establishments Act, 1948 (‘the
Act’) regulates the conditions or work and employment in shops, commercial
establishments, residential hotels, restaurants, theatres, other places of
public amusement or entertainment. It applies to the whole of Maharashtra.

1.2 The Act operates in municipal areas specified in Schedule
I to the Act. However, the State Government has power u/s.4 to exempt all or any
of the provisions of the Act to any establishment, employees or other persons.

2. Definitions :

2.1 Establishment — A shop, commercial
establishment, residential hotel, restaurant, theatre, other place of public
amusement or entertainment to which the Act applies and any other establishment
which is notified by the State Government.

2.2 Commercial establishment — It means an
establishment which carries on any business, trade or profession or any work in
connection with or incidental or ancillary thereto. The following establishments
are included within the definition of the term commercial establishment :

2.3 Employer — means a person having owning or having
ultimate control over the affairs of an establishment.

3. Registration :

3.1 Every establishment to which the Act applies must apply
for registration with the inspectors designated under the Act within the
specified time. The application must be made in the prescribed form along with
the prescribed fees.

3.2 The inspector would on being satisfied about the
application, register the establishment and issue a certificate of registration
to the employer. This certificate needs to be renewed every year.

3.3 Any change in the particulars submitted while making the
application must be communicated to the inspector by the establishment. Further,
within 10 days of closure of the establishment, the employer must communicate
such fact to the inspector and get his certificate cancelled.

4. Regulation of establishments :

4.1 The Act lays down the opening and closing hours of shops
and commercial establishments. For instance, no commercial establishment can be
opened earlier than 8.30 a.m. and close later than 9.30 p.m. It also empowers
the State Government to modify the same for different classes of shops and
commercial establishments. Offices which work “It also specifies that no
employee can be made to work for more than 9 hours per day and 48 hours in any
week.

4.2 Every shop and commercial establishment must remain
closed for one day in a week, e.g., a Sunday. The employee cannot be called for
work on this day and must be paid his salaries as if he has attended office on
that day.

4.3 The Act also prescribes similar rules for residential
hotels, restaurants, theatres or other places of public amusement or
entertainment.

4.4 Anybody who is between 15 and 17 years of age is
considered to be a young person. No young person can be required or allowed to
work, whether as an employee or otherwise, in any establishment

(a) after 7.00 p.m.

(b) for more than 6 hours in any day; and

(c) if the work involves danger to life, health or morals.

Women cannot be allowed to work in any establishment after
9.30 p.m.

4.5 Every employee, who has worked for at least 3 months in a
year, shall be entitled to leave of 5 days for every 60 days of service during
the year. However, if he has worked for at least 240 days in a year, then he is
entitled to 21 days leave. Further, he would be entitled to additional holidays
on certain days, such as 26th January, 15th August, etc. An employee is
prohibited from working when he is given a holiday or is on leave as per the
provisions of the Act.

4.6 If an employer wants to terminate the services of any
employee who has been working for a continuous period of one year or more, then
he needs to give him a notice period of 30 days. If this is not done, then the
termination is bad in law and the employee can claim reinstatement with full
wages. However, this provision would not apply in case of a termination due to
misconduct.

4.7 It should be remembered that the State can, on an
application, exempt the operation of the above provisions to any establishment
or employee. For instance various 5-star hotels have got exemptions from the
provisions of S. 33 which mandate that women cannot work after 9 p.m. However,
various conditions have been imposed while granting such an exemption.
Similarly, BPOs have got exemptions from some of the provisions pertaining to
working hours, etc.

5. Application of other laws :

5.1 The State Government may prescribe that the Payment of
Wages Act, 1936 shall apply to any class of establishments or employees to which
this Act applies.

5.2 The provisions of the Industrial Employment (Standing
Orders) Act, 1946 apply to any establishment to which this Act applies as long
as it employs more than 50 employees.

5.3 The State Government may prescribe that the Maternity Benefit Act, 1961 would apply to any establishment to which this Act applies.

    6. Health & Safety :

6.1 Every establishment shall be kept clean and have proper ventilation. It must be sufficiently lit during all working hours. The Act prescribes standards for the same.

6.2 Every establishment must take precautions against fire. Further, certain types of establishments must also maintain a first-aid kit.

    7. Registers & inspection :

7.1 The Act requires establishments to maintain such registers and records and display such notices as may be prescribed. The rules framed under the Act require every establishment’s name board to be in Marathi in addition to any other language. However, the lettering of the Marathi script should be of the same size as that of the other language.

7.2 The inspectors appointed under this act have power of entering and inspecting any establishment, examine the prescribed registers and records, take evidence of any persons he considers necessary.

7.3 The Act prescribes various penalties for contravention of the provisions of the Act. For instance, S. 52 lays down the penalties for contravening a majority of the provisions of the Act. It specifies a penalty of Rs.1,000 to 5,000 for each offence. There is also an enhanced penalty for repeat offenders who have already been convicted under the Act.

    Role of a CA :

A CA can make his clients about the provisions of this Act and enlighten them about the requirements of compliance with the Act. This would be a value-added service which he can provide to his clients. He can also undertake a compliance audit for his clients. By broadening his peripheral knowledge, a CA can add value to his services.