Shops and Establishments

This article is written by Vaibhav Bhatia.


We all have by now heard daunting stories of someone we probably know working specifically in a private establishment regarding the horrendous working hours, especially during the novel coronavirus pandemic. And the first question that pops up in one’s mind is whether an employer can do away with provisions relating to working hours owing to the pandemic situation. The present times are unprecedented. There has been a huge shift and businesses are carrying out the work through a work-from-home based model, which the Indian law lacks in content. Change is happening at a fast pace, and the legislature needs to act quickly to keep up with it. This article will explain the general provisions as to work hours, holidays, as well as leaves in the organized or unorganized sector that are provided in relevant law relating to labor and employment in India.


The much anticipated four labor codes are on the verge of implementation in India. The bills have already been passed by parliament and also received assent from the President. It consolidates 29 labor laws into 4 labor codes namely, Code on Wages, 2019, National Security Code, 2020, Industrial Relations Code, 2020, and Occupational Safety, Health and Working Conditions Code, 2020 in order to promote ease of doing business and remove complexity from the system of governance. Since labor falls under the concurrent list under the 7th Schedule of the Constitution of India, stating division of powers between the Centre and States; meaning, both the Union and State can make laws relating to labor. The above 4 codes will be implemented by the Union, whereas every state amends, in a timely manner, and in consonance with Model Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2016 as issued by the central government should the state decide to adopt it based on its needful requirement. Such is the Maharashtra Shops & Establishment Act which provides provisions for regulation of employment and working conditions of workers employed in any establishment.

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Whom does this act apply to?

The Maharashtra State & Establishment Act, 2017 applies to establishments employing 10 or more workers.

To better understand the provisions relating to working hours, holidays, overtime, and leaves, it is important to look at some important definitions provided under this act:

  1. “Employer” is one who owns or has control over the affairs of an establishment.[1]
  2. The word “establishment” has been given a wide meaning under the Act.[2]
  3. A “worker” means any person except an apprentice, employed to do any manual, unskilled, skilled, technical, operational, or clerical work for hire or reward, whether the terms of employment be expressed or implied.[3] But, any worker occupying a position of confidential, managerial or supervisory is excluded from the definition of worker.[4]
  4. The word “shop” means premises where goods are sold whether retail or wholesale or where services are rendered to customers, and includes an office, store-room, warehouse, or workplace used in connection with such trade or business.[5]

It is to be noted that the state government reserves the right to reverse and declare any establishment to which this act or any provisions thereof does not apply and the same shall be made applicable to such establishment.[6] And also to suspend all or any of the provisions of this Act for such time period as it deems fit.[7]

The state specific Shops and Establishment Acts runs parallel to other national labor laws. For instance, the centre has the power to regulate wages or bonuses which will be applicable to both public as well as private enterprises under Code on Wages, 2019.

Who is a facilitator?

A facilitator is a public servant as defined by Indian Penal Code. The facilitator is appointed by the state government for advising the employers or workers for them to effectively comply with the provisions of this act or for inspection of the establishment to which he is assigned. [8]

Law relating to work hours and leaves

The Maharashtra Shops & Establishment Act, 2017 states the number of hours a worker is required to work, provisions relating to leaves, holidays, and other welfare benefits for employees working in an establishment as defined under this act to be provided by the employer. Chapter III of the act provides for “hours of work, rest, overtime, and week day off.”

So, the question is, how much can the employer sweat a worker in a day? The answer is a total of 9 hours in a day and 48 hours a week. Additionally, a rest interval is to be provided for not less than half an hour for every five hours worked. Conversely, subject to permission from the facilitator, such working hours or weekly holiday can be relaxed.[9]

Let us understand with the help of an example of Mr. X, who is working in a private bank named ‘NPB’ in Mumbai. X is frustrated and irritated by his employer as he is making him work for 10 or 12 hours a day and sometimes 7 days a week. Is this legal?

In this case, Mr. X needs to know about the ‘spread over’, that is, the period between start and end of work of a worker on any day, which is 10 hours in any day. This spread-over cannot exceed 12 hours in a day in case of urgent or intermittent nature of work.

Therefore, if Mr. X is made to work beyond 9 hours in a day or 48 hours a week then, he shall be entitled to overtime wages which shall be calculated at a rate twice of what he is entitled to. Here, it is pertinent to note that the said overtime hours cannot exceed 125 hours in 3 months.[10] [11]

To answer the second part of the question, a weekly holiday is mandatorily given to a worker working in any shift. And if he is called to work on the day of his rest, then he shall be entitled to twice his ordinary rate of wages and a compensatory leave is to be provided within 2 months of such weekly holiday if denied. Additionally, no deduction shall be made from his weekly holiday. Provided that Mr. X has been in continuous employment for more than 6 days.[12]

For Women

As far as women are concerned, the stipulated work hours are between 7:00 a.m. – 9:30 p.m. However, if you consent to work during 9:30 p.m. and 7:00 a.m. then you are at the freedom to do so provided that the establishment in which you are working is providing a safe working environment and also transportation facility to the consenting woman employee. Additionally, no discrimination shall be made in promotion, training, or wages against women workers. Although the state government here reserves the right to change the standard timing for women workers as it may deem fit upon notification in official gazette.[13]

Provisions relating to Leaves under Maharashtra Shops & Establishment Act, 2017 [14]

As discussed above, a weekly holiday is to be allowed to a worker, and for such holiday no deduction shall be made from his wages. Weekly-off is mandatory. Apart from that, let us now understand the provisions relating to different types of leaves under this act.

Casual leave

  • 8 days of casual leave is provided under the act for a worker which can be used in a calendar year. If unused, such leave shall lapse at the end of the year.

Earned leave

  • Worker who has worked for more than or equal to 240 days in a year, shall be allowed, in the subsequent year, a holiday of 1 day for every 20 days worked by him in such a previous calendar year.

Section 18(8) provides that, for the calculation of 240 days or more, the following days shall be assumed to be the days on which the worker has worked in any establishment:

  1. Lay-off, by agreement or as under model standing orders issued under Industrial Employment (Standing Orders) Act, 1946 on this behalf.
  2. Maternity leave.
  3. Earned leave prior to that in which leave is availed (which basically means, paid leave which is earned in the year prior to the year in which leave was taken).
  4. Absenteeism on ground of temporary disablement caused by accident “arising out of and in the course of employment”. But for such days he shall not earn leave for these days – simply put, these days are to be included only for calculating 240 days so that you as a worker are at least entitled to the earned leave but such paid leave earned shall be entitled to you after subtracting for such abovementioned days.

For instance, let’s suppose, last year you suffered an accident arising out of and in the course of employment and you took a leave for say, 20 days for the sake of simplicity. So, if you were absent from work for 20 days excluding other entitled leaves and holidays then the calculation for you to get eligible to earn such paid leaves, the said 20 days shall be assumed as if you worked on those days under Section 18. But, to calculate your actual earned leave, 20 days shall be subtracted from required 240 days for eligibility which equals to 220 days which further when divided by 20, for final calculation as discussed under point(a), comes 11. Therefore, the paid leave that you earned for this year is 11 days.

  • Otherwise, a worker who has been employed for not less than 3 months in any year shall be allowed leave for a period maximum of 5 days for every 60 days worked in a calendar year. Consecutively or otherwise.

Points to remember:

  1. Sub-section 5 of section 18 provides that maximum earned leave that can be accumulated is 45 days. Exception being given under sub-section 6 of Section 18, where the employer refuses to sanction leave under point (a), wherein the worker has worked for 240 days or more, and on application of 15 days in advance, the worker shall have right to encash the earned leave in excess of the statutory limit of 45 days. Furthermore, it is provided that full wages shall be paid for the leave for other than casual or festival leave due to him in case of refusal and he quits due to retirement, resignation, death, or permanent disability, or if the employer discharges him before the leave has been allowed.
  2. The leaves earned under points (a) and (b) respectively shall be paid to the worker according to his daily average wages for days he actually worked excluding his overtime earnings. And such leave with wages shall be exclusive of all holidays.

Festival leave

  • Festival leave is entitled up to a period of 8 days. Four mandatory, and remaining as agreed between the employer and the worker. For such holidays, he shall be paid as the daily average of his wages that he earns.
  • If in case, an employer makes a worker work on such leave period(s) then such person shall be entitled to double of his daily average wages plus leave on any other day instead of the compulsory holiday.

Maternity leave

Maternity leave is increased to 182 days i.e., 26 weeks under Maternity Benefit (Amendment) Act, 2017. For this, a minimum of 80 days must have been worked in the last 12 months immediately to the preceding date of expected delivery and up to 56 days can be availed before delivery. It is to be noted that such benefit is now extended to commissioning mothers (who engage another female to conceive a child) and also to adopting mothers for adopting a child not more than 3 months old for a period of 12 weeks from the date when child is handed over to such woman. Also, a woman with a third child shall be provided with 12 weeks of maternity leave. Lastly, a new provision regarding work from home is provided by this amendment whereby given the nature of work, such work can be performed at home subject to conditions as agreed between the employer and woman. Information about all such benefits in detail needs to be provided to her at the time of joining by the employer. The maternity benefit act also applies to shops and establishments as well employing 10 or more employees except women workers who are covered by Employees’ State Insurance Act, 1948.

Paternity Leave

In India, there still seems to be the notion that only the mother has the responsibility to take care of the child and father has no such duty at all. Since there exists no provision for paternity leave under Indian labor laws. However, male employees working in the central government can take leave for 15 days either before or within 6 months from the date of delivery of the child.

Penalty for contravention of provisions under Maharashtra Shops & Establishment Act, 2017

Penalty is a fine up to Rs. 1 Lakhs. And an additional amount of Rs 2,000 for each day if the contravention continues. Also, if the same offence is continued again then the fine may extend to Rs. 2 Lakhs.[15]

In case if such contravention results in accident to the worker

Employers shall be liable to imprisonment up to 6 months, or fine not less than Rs. 2 Lakhs extendable up to Rs. 5 Lakhs, or with both in case such contravention results in any serious injury or death of a worker.[16]

Work-from-home provisions in India?

The International Labor Organization (“ILO”) through the convention no. 177 has defined teleworkers vide recommendation no. 184 under the term “home-work” as employees who use information and communication technologies (ICT) to perform their work at home outside employer’s premises permanently as opposed to those who take their work at home occasionally. And the rules regarding the same raising concerns relating to discrimination that may arise against ones who are not physically present. However, the same is not yet signed up by India. Also, the new labor codes have failed to identify proper courses of conduct that would be applicable to the employees working from home. The task is for the policymakers to take the work-from-home model into consideration seriously, especially post Covid-19 pandemic. It is also interesting to see that the majority of employers in India are considering flexible remote work models. At present, companies are resorting to its internal policies for better functioning of work flow between employer and the worker.


This is a short piece concerning only hours of work, overtime, and leaves of much larger substance under Maharashtra Shops & Establishment Act which also includes other important provisions relating to working conditions in an establishment employing 10 or more workers. For instance, registration of establishments with the facilitator, health and safety of workers, and other important welfare laws. As an employee, most don’t know much about the legalities they are tied to when they join the workforce. Knowing the basics would save you from being exploited at the hands of your employer. Remember, as a worker, you are a part of a much bigger idea. If something you know is wrong, do stand up for yourself, as no one is above the law.


[1] Section 2(3) of MSEA 2017

[2] Section 2(4) of MSEA 2017 “establishment” means an establishment which carries on, any business, trade, manufacture or any journalistic or printing work, or business of banking, insurance, stocks and shares, brokerage or produce exchange or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession or manufacture; and includes establishment of any medical practitioner (including hospital, dispensary, clinic, polyclinic, maternity home and such others), architect, engineer, accountant, tax consultant or any other technical or professional consultant; and also includes a society registered under the Societies Registration Act, 1860, and a charitable or other trust, whether registered or not, which carries on, whether for purposes of gain or not, any business, trade or profession or work in connection with or incidental or ancillary thereto; and includes shop, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment; to whom the provisions of the Factories Act, 1948 does not apply ; and includes such other establishment as the State Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act

[3] Section 2(26) of MSEA 2017

[4] Section 3(11) of MSEA 2017

[5] Section 2(21) of MSEA 2017

[6] Section 4 of MSEA 2017

[7] Section 5 of MSEA 2017

[8] Section 28 of MSEA 2017

[9] Section 12 of MSEA 2017

[10] Section 14 of MSEA 2017

[11] Section 15 of MSEA 2017

[12] Section 16 of MSEA 2017

[13] Section 13 of MSEA 2017

[14] Section 18 of MSEA 2017

[15] Section 29 of MSEA 2017

[16] Section 30 of MSEA 2017

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