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Haryana Shops and Establishment Act

December 11, 2022

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This article is written by Rachna Kumari of the National University of Study and Research in Law, Ranchi. This article provides an in-depth analysis of the Haryana Shops and Establishment Act, 1958. This article jots down the applicability of this Act, Important definitions and provisions in the Act, the registration process, and important exemptions, amongst other things.

It has been published by Rachit Garg.

Table of Contents

Introduction

In the 21st century, the era of globalisation and when every country is working towards making their economy better, we often forget the ones who have the biggest contribution to growing the economy; the workers and employees.

The Haryana Shops and Establishment Act (hereinafter referred to as the ‘HSE Act’) was enacted in 1958 with the intention to safeguard the rights of the workers and employees. Section 1 of the HSE Act discusses its extent, commencement and application. Further, the Act provides definitions such as, “commercial establishment”, “employee”, “factory”, “inspector”, “register of establishments”, “shop”, “wages”, “young person”, etc. Further provisions like applicability of this Act, the Government’s power to expand the provisions of this Act, conditions of employment for young persons, hours of employment, registration of establishments, leave, wages for close days and during the leave period, enforcement and appointment of inspectors, inspection of registers and calling for Information, notice of removal, power to compound offences, power to grant exemptions, prohibition of employment of children, work of conditions for women, maternity benefits, and power to make rules and repeal are discussed in the Act.

For the protection of the workers/employees of shops and commercial establishments, the Haryana Shops and Establishment Act provides regulations for the payment of wages, terms of the service, number of working hours, rest intervals, opening and closing hours, working conditions, holidays, maternity leave, etc.

Applicability of the Haryana Shops and Establishment Act

In accordance with Section 1 of the Act, the application of this Act extends to all the shops and commercial establishments based in the areas notified by the Government of Haryana. Haryana Shops and Commercial Establishment Act follows the Punjab Shops and Commercial Establishments Act, 1958.

Important definitions under the Haryana Shops and Establishment Act

Definitions are given under Section 2 of the Haryana Shops and Commercial Establishments Act. The most important ones are discussed below:

Commercial establishment

‘Commercial’ establishment is defined as the premises where any profession, business or trade is carried out for monetary benefits. It includes printing establishments and businesses of banking, insurance etc. Further, the commercial establishment also includes hotels, restaurants, cafes, cinema halls etc set up for financial advancements. In the case of P.B. Nayak and Ors. v. Managing Director, Bhilai Steel Plant and Ors (2021) and Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978) the Apex Court held that an establishment is identified by its actual working, functioning and character and only these factors will decide whether an establishment is an establishment. In the P.B. Nayak judgement, the Court had to decide whether a club specially made for the officers of Bhilai Steel Plant can be considered to be an establishment. The Court referred to the findings of the High Court and pointed towards the definition of a Club from Halsbury, 4th Edn., Vol,6, para 201, P.56 that a club, except as proprietary or an investment club, cannot be considered as an establishment if it is constituted by a society of persons associated together for cultural, spiritual, promotion of sports, politics purposes.

Employee

‘Employee’ refers to a person who is working for an establishment in his/her entire capacity, whether permanently, periodically, on a contract basis or piece-rate wages. Any family member of the employer cannot be considered as an employee.

Employer

‘Employer’ can be understood as a person who owns and has complete charge of an establishment, he/she has got the final control over the affairs of the establishment. The definition of employer includes the members of the family of the employer, an agent or manager acting on behalf of the employer.

Factory

‘Factory’, under the HSE, Act, is the same as it is in the Factories Act, 1948, i.e., any premises including the place where ten or more workers are working or were working on the day previously in any part of an establishment where manufacturing is/was being carried out.

Family

‘Family’ in reference to an employer means: spouse, children, stepchildren, parents, sisters, and brothers if they’re residing with and wholly dependent upon him.

Shop

‘Shop’ refers to the area where any business or trade activity is carried out or services are delivered to the consumers, it includes offices, store-rooms such as warehouses, godowns etc, be on the same property or any other property in connection with the same establishment, but it doesn’t include the shops linked with the factory where those who are employed in the shop are allowed to avail the benefits provided for workers under Factories Act, 1948.

The registration process of the Haryana Shops and Establishments Act

Section 13 of the Haryana Shops and Establishment Act discusses the Registration of Establishments. Under Section 13(1) of the HSE Act, the employer of every establishment that exists in areas to which this Act is applicable or where this Act is extended, all the new establishments in such areas, the employers of such establishments shall send a statement in the prescribed form (accompanying the fee as may be prescribed), to the prescribed authority within thirty days.

The form must include the following details:-

(a) name of the employer and the manager,

(b) postal address and name of the establishment,

According to Section 13(2)(i), on receiving the statement and fee prescribed, on being satisfied with the authenticity of the statement, the authority has to register the enterprise in the register of establishments in the prescribed manner and shall issue a registration certificate to the employer.

On-demand, the certificate shall be shown to the Inspector by the employer.

After every three years, the registration certificate has to be renewed. A grace time of thirty days shall be allowed to renew the certificate after payment of the prescribed fee.

Under sub-section 4 of Section 13, if there are any alterations with respect to any data contained in the employer’s statement, the employer is duty-bound to notify the prescribed authority in the prescribed manner within seven days after the introduction of changes. On receipt of such notice and after being satisfied with the genuineness, the authority shall make the amends in the register of establishments according to the notice and if required, shall alter the registration certificate.

According to Section 13(5), within ten days of an employer’s closing the establishment, the employer shall notify the prescribed authority in writing. On receipt of the information and after being satisfied with the same, the authority shall delete the establishment’s name from the register of establishments and cancel its certificate of registration.

Impact of Haryana Shops and Establishment Act on different sectors

This Act is applicable to all the shops and Commercial establishments based in the areas notified by the Government of Haryana irrespective of the services they’re providing. Hence, it doesn’t have any special impact on different sectors.

Important exemptions

Section 3 discusses the non-applicability of the Act on certain establishments and persons. The establishments upon whom this Act is not applicable are given below;

Those offices that come under the Central or state government, the Reserve Bank of India, any administration related to railways or any local authority.
Any air, marine, railways service, postal service, industry related to sanitation, or business that delivers light, water or electricity to people.
Dining cars on the railway.
A lawyer’s office.
Any individual employed in the business of any undertaking aforementioned.
Any personnel whose employment hours are regulated by the Factories Act, 1948.
Any individual whose work is inherently intermittent.
Establishments that belong to stamp vendors and petition writers.

According to Section 5 of the Act, Through a notification, the Government may declare any class of establishments or persons specified therein not to be exempted from the provisions of this Act.

Important Sections of the Haryana Shops and Establishment Act

Working conditions for young persons

Section 6 discusses the conditions of employment for young persons (a young person is someone who has attained the age of fourteen but has not attained the age of eighteen years). According to Section 6, the working hours of a young person, exclusive of intervals for meals and rest, must not cross a total of thirty hours in one week or five hours every day. Without an interval of at least 30 minutes for a meal or rest, a young person shall not be continuously employed for more than three hours.

The government may prescribe more conditions with respect to the employment of young persons.

In case of any contravention or failure to comply with the provisions of this Section, on conviction, the employer shall be liable to a fine which must not be less than fifty rupees but may extend to two hundred rupees.

Unless the contrary is proved, an individual in respect of whom the offence was committed shall be presumed to be a young person during the proceedings for an offence under this Section.

Employment hours

Section 7 is a provision related to Hours of Employment, according to Section 7(1) no individual shall be employed to work in the undertaking for more than 48 hours in one week and nine hours per day. Sub-section 2 states that in case of occasional or extraordinary pressure of work a person may be employed in excess of the hours mentioned above.

However, the total number of overtime hours by an employee should not exceed fifty hours within a quarter and the person must be reimbursed at twice the rate of his normal wages calculated per hour.

On any day or in any week, no employer shall employ a person who has previously been employed on that day in that in another factory for a longer period than he should have been, together with the time during which he has been employed on that day or week, exceed the number of hours permitted in sub-section (1).

In case there are any proceedings against the employer for infringing the provisions of sub-section (3), for his defence, the employer has to prove that he didn’t know and could not know with reasonable diligence that the person was previously employed by an employer of any other factory.

Section 7(5) states that no person shall work about an establishment(s) or any factory in excess of the time interval during which he may be legally employed under this Act.

Intervals

Section 8 discusses the intervals for rest or meals, according to which, except a chowkidar, watchman or guard, no employee shall be allowed to work in an undertaking for more than 5 hours before an interval for the rest of at least thirty minutes. However, the government by notification may fix such intervals for rest for any undertaking for the entire state or any part as it may consider necessary.

Holidays

Section 12 deals with holidays i.e., every employee shall be allowed a holiday with payment on-

1. Republic day, Independence day and Gandhi Jayanti.

2. Five other holidays in a year in connection with the festivals as the Government may declare.

Leave

Section 14 discusses leave which states that employees who are employed for more than twenty days are entitled to one paid leave every twenty days. A young individual is entitled to a paid leave every fifteen days.

In calculating leave under Section 14, a half-day or more shall be treated as one day’s leave, and leave for less than half a day must be ignored. If any employee doesn’t take a whole leave provided to him under clause (a) of this section, in that case, that leave must be added to the leave to be allowed to that employee in the coming year.

When a leave is applied for, it shall be granted except for a valid reason intimidated in writing from the employer to the employee within fifteen days of the application. If the leave is refused and is applied again by the employee, the leave shall be allowed during the year.

Wages for close days

Section 15 discusses wages for close days and during the leave period, i.e., any person employed for a time period of fifteen days or more must receive wages at a rate which is not less than the average daily wage earned by him/her. On-demand, the employee whose leave has been allowed (not less than five days in the instance of a young individual and four days in any other case) must be paid for the period of leave he is allowed before his leave begins.

In case the employer doesn’t comply with the rules laid down in Section 16, and a Judicial Magistrate is satisfied that the employer has not paid the due wages of an employee, he shall order the employer to pay the wages along with the remuneration not exceeding eight folds the number of wages held back by the employer. As per sub-section 2 of Section 18 of the Act, the number of wages withheld and compensation payable for the purposes of its recovery shall be deemed to be fine.

Enforcement of appointment of inspectors

According to Section 19 the government, by notification may appoint persons as it thinks capable of being the inspecting officers for the purpose of this Act within local limits as it may assign. The government may also appoint individuals as it may deem fit not below the rank of Deputy Labor Commissioner, to be the chief Inspector or Deputy Chief Inspector under this Act.

An inspecting officer may, within the limits of his appointment-

Enter any establishment which is or which he thinks is an establishment, at all reasonable times and with assistants that are in the service of the government.
Make an examination of the establishment and of any registers, records and notices and evidence of any persons as he may deem necessary for the conformity of the HSE Act.
Exercise any other powers as are important for carrying out the purpose of this Act, except requiring anyone to answer any incriminating question or give any incriminatory evidence.

Records

Section 20 discusses the records to be maintained by the employer which are as follows-

The employer shall keep a notice setting forth the close day, working hours and the period of intervals of the employees and any such other particulars as may be required/ prescribed in the prescribed form and manner.

A record of the hours of work, intervals for rest and the number of leave taken by the employee and particulars of all overtime employment shall be maintained. Attendance of every employee shall be marked in a register and in the case of overtime all entries regarding the start and end of overtime shall be marked.

A picture of every employee who has completed 3 months of continuous service shall be kept.

In case of any contravention, the employer shall be liable to a fine not exceeding five rupees every day on which the contravention continues.

According to Section 21, it shall be the duty of every employer to make all accounts or other records required to be kept for the purposes of this Act, and to give any other information in connection therewith, available to the inspecting officer.

Notice of removal

Mentioned in Section 22 of the Act, which states that no employee shall be removed from service without a notice given to him one month in advance or pay in lieu thereof. If any employee is removed for misconduct he shall not be entitled to the notice or pay in lieu of notice unless and until he has been in the service of the employer for a continuous period of three months.

Section 23 discusses notice by an employee which states that no employee who is in service for a period of three months shall terminate his employment without giving thirty days prior notice or salary in lieu thereof. In case of contravention, the employer may not pay the unpaid wages of the employee for a period of not exceeding 30 days.

Compounding of offences

Section 26A discusses the power to compound offences, according to which the compounding authority as may be notified by the Official Gazette, shall compound the offence committed under this Act. The offender shall be discharged after the recovery of a sum of money not less than fifty percent of the maximum amount of the fine is recovered.

No offence of the same nature can be compounded if it is committed more than twice a year.

No penalty shall be imposed unless the person concerned is given notice in writing to inform him of the grounds on which the penalty is imposed.

Section 28 of the Act empowers the government or any officer empowered by the government exempt from the provisions of this Act for any period it considers necessary any establishment or any class thereof or any employee or employer or class of employees or employers to whom this Act applies on the conditions as the government may think fit.

Section 29 states that no child who has not completed the age of fourteen years shall be employed. This Section is to ensure the right to life guaranteed under Article 21 of the Constitution of India and the Right to Education for a child under the age of fourteen held in the case of Unni Krishnan J.P. and Ors v. State of A.P. and Ors.(1993).

Employment conditions for women

Section 30 discusses the conditions of employment of women-

No woman can be required or allowed to work at night, as an employee or otherwise in any establishment.

No employer shall knowingly employ a woman or engage in employment during six weeks following the day of her confinement or miscarriage.

The Government may prescribe further conditions in respect of employment of women employed in the business of an undertaking, conditions of the daily period of employment, leave etc.

Maternity leave

As per Section 31, every woman employee who has been continuously employed in that establishment for a period equal to or more than six months following her delivery date, is entitled to receive a payment of a maternity allowance for every day during the six weeks preceding and including the day of her delivery of and every day of the six weeks following her delivery, from her employer.

According to Section 33A, no Court can take cognizance of any offence punishable under this Act or any rule made thereof of the abetment of or attempt to commit such offence, save on a complaint made by the employee concerned or by such officer as may be authorised in writing by the Government.

Critical analysis of the Haryana Shops and Establishment Act

The Haryana Shops and Establishment Act was enacted to ensure the rights, and liabilities of workers/ employees as well as the employers, the safety and security of workers, healthy work conditions and security of the workers. However, when the COVID-19 pandemic hit the world it was very evident that the current laws are not able to secure the workers either economically or psychologically. The Indian migrant workers faced loads of hardships during the pandemic. There was not just scarcity of food, water, shelter, and health but also the fear of getting infected and spreading infection. On top of it, as soon as the lockdown was imposed, many employers either fired their workers/employees or cut their wages so short that they were forced to leave their place of residence and shift to their native place for the time being. During the pandemic, the International Labor Organization (ILO) predicted that because of the pandemic and subsequently the lockdown as many as 400 million workers would be stricken by poverty. With the introduction of new Labor Codes, i.e., the Industrial Relations Code of 2020, Social Security Code of 2020, Code on Wages and Occupational Safety, Health and Working Conditions Code of 2020, changes should be made in the Haryana Shops and Establishment Act as well ensuring that during unprecedented times like COVID, any natural calamity or human-made disaster, these poor, helpless workers don’t have to worry.

Another aspect that the Act lacks is to give attention to the mental health of the workers. The Act should be amended to include contract workers, gig workers and IT professionals for the benefit of other workers. Further, as this Act exempts offices under the Central or state government, the Anganwadi workers are deprived of their pension and other such benefits. In the case of Maniben Maganbhai Bhariya v. District Development Officer Dahod and Ors. (2022) concerning the contributions of Anganwadi workers towards the nation, the Hon’ble Supreme Court held that the legislature can give a thought to consider the applicability of gratuity being a social security measure, be extended to the employees who have been serving the establishment in an organized or unorganised sector which is contributing to the sustainable development of the country. The Payment of Gratuity Act, 1972, can be reconsidered by the Legislature giving benefits to all the workers working for the sustainable development of India. In this case, the Supreme Court also cited the case of State Bank of India v. Shri N. Sundara Money(1976), Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors(1978), Steel Authority of India Ltd. and Ors v. National Union Waterfront Workers and Ors. (2001) where a liberal approach was taken for the welfare of the workers.

Forms for Compliance

The employer has to comply with the following-

Form A: Intimidation Under Section 10(2)(i) of the Punjab Shops and Commercial Establishment Act

In this form, the employer has to provide details to the Inspector of Shops and Commercial establishments regarding the working hours and intervals for rest of the persons employed in his establishment.

Form B: Display of Notice

All the shops and establishments have to maintain Form B, i.e., Display of Notice to the Labour Inspector, get the notice acknowledged by him and display it on the company notice board or security entrance gate where it is visible to all employees.

Form C: Register of Employees

This form contains employee-wise details Name of the Establishment, name of the employee, interval for rest & meals, overtime, leave, remuneration and deductions.

Form D: Register of Wages

This form contains details of wages fixed, Arrears from last month, wages earned during the month, overtime, wages due, deduction shown in Register – E, advance made on and payments made.

Form E: Register of deduction

This form contains details like the name of the employee, wage, wages payable, the amount deducted, the fault for which deductions were made, date of deduction, and whether the employee showed cause against deductions, amount of deduction and purpose for which utilised, date of utilisation and balance with the employer. In case there are no deductions in a month, the employer can maintain the NIL Register.

Form F: Statement of Registration of the Establishment

Under Punjab Shops & Commercial Establishments Act 1958, New establishments have to fill this form and submit the same to the labour department to register their establishment.

Form G: Form of change of information

Whenever there are changes in the organisation such as change in the list of directors, work hours, authorised signatory, address etc., the same must be intimated to the Labour Department and this form needs to be filled and submitted to the Labour Inspector.

Form H: Registration of Establishment

For the purpose of registering their establishments under the Haryana Shops & Commercial Establishments Act, all new establishments have to fill this form and submit it to the labour department.

Conclusion

The Haryana Shops and Establishment Act was passed by the government to ensure the rights and duties of employers and employees. It is applicable to all the shops and commercial establishments in the areas notified by the Government of Haryana. This Act introduces various provisions relating to the establishments and lays down the rules and regulations with which employers and employees have to comply. For compliance of all the rules and regulations, the government has made provisions for penalties to be imposed on those employers who do not comply with the Act. Various uncertainties about rules, duties, and rights contributed to the development of this Act.

Frequently Asked Questions

Does this Act also apply to the establishments set up by the State government and Central government?

No, the establishments set up by the State government and Central government are exempted from the rules and regulations of the Haryana Shops and Establishment Act.

Which establishments fall under the jurisdiction of this Act?

The establishments such as shops, hotels, Commercial establishments, clubs, cafes, movie theatres, etc., fall under the jurisdiction of this Act.

Is the fee for the registration of an establishment uniform throughout the country?

No, the registration fee for any shop or establishment differs according to the laws of the respective state. There is no fixed fee for registration on a national scale.

References

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