Maharashtra notifies new Shops and Establishments Law

The Government of Maharashtra (Government) has notified the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (New Act), through a notification dated 7 September 2017. The New Act would come into effect from the date to be appointed by the Government in the official gazette and would repeal the Bombay Shops and Establishments Act, 1948 (Old Act).

Some of the key highlights of the New Act are:

  • The provisions of the New Act apply only in relation to the establishments employing 10 (ten) or more workers. The establishments employing 9 (nine) or lesser workers are required to only intimate the commencement of business to the jurisdictional “Facilitator” introduced and appointed under the New Act (Facilitator).
  • Erstwhile “Inspectors” have now been replaced with the Facilitators to, inter alia, enforce and advice the employers and workers about the provisions of the New Act.
  • The term “Employer” now includes (i) partners or members, in the case of a firm or association of individuals; (ii) director of a company; and (iii) person(s) appointed to manage the affairs, in case of the Central Government or a State Government or any local authority.
  • The definitions of the terms “Commercial Establishment” and “Establishment” under the Old Act have been merged into the definition of the term “Establishment” under the New Act which now includes establishments carrying on any manufacture, journalistic or printing work, business of banking, insurance, stocks and shares, brokerage or produce exchange, but does not include an establishment of any legal practitioner.
  • Employer of an establishment is now required to submit an online application to the Facilitator, for registration of the establishment (as well as when there is any change in the particulars of such application, in future) under the New Act, along with other documents and applicable fees. Upon receipt of which, the Facilitator would issue a registration certificate, online, along with the Labour Identification Number (LIN), to the employer. Such registration certificate would be valid for such period as may be requested by the employer, subject to a maximum period of 10 (ten) years and thereafter it may be renewed. Moreover, the Facilitator can cancel the registration of any establishment, if at any time, it is found or brought to the notice of the Facilitator that such registration has been obtained through misrepresentation or suppression of material facts or by submitting false or forged documents or false declaration or by fraud. Also, the New Act permits the employer to maintain records, as may be prescribed, either electronically or manually.
  • As opposed to the Old Act, which prescribed 10 (ten) days, the New Act requires an employer to notify the Facilitator regarding close of business of its establishment within 30 (thirty) days from such closure.
  • While the Old Act prescribed consistent opening and closing hours for establishments, as set out in the Old Act, the New Act gives power to the Government to fix, by notification in the official gazette, in the public interest, hours for opening and closing of different classes of establishments and for different premises, shopping complex or mall or for different area(s) and for different period.
  • Supplementing the erstwhile provision which prohibited requiring or allowing women to work in any establishment after 9:30 PM, the New Act provides that a woman worker, with her consent, would be allowed to work during 9:30 PM to 7:00 AM in any establishment in which adequate protection of her dignity, honour and safety, protection from sexual harassment and her transportation from the establishment to the doorstep of her residence, as may be prescribed, are provided by the employer. Also, the New Act prohibits discrimination against women in the matters of recruitment, training, transfers or promotion or wages.
  • The New Act provides every worker a right to 8 (eight) days of casual leave with wages in a calendar year. The workers are permitted to accumulate earned leaves up to a maximum of 45 (forty five) days. Also, every worker who has worked for a period of 240 (two hundred and forty days) or more in an establishment during a calendar year, is permitted, during the subsequent calendar year, to have leave with wages for a number of days calculated at the rate of 1 (one) day for every 20 (twenty) days of work performed during the previous calendar year.
  • As opposed to the Old Act, which provided for a maximum fine of INR 15,000 (Rupees fifteen thousand) in case of repeated contravention, the New Act makes provisions for extension of fine to INR 500,000 (Rupees five hundred thousand) and also for imprisonment extending to 6 (six) months.

The New Act may be accessed through the following link: