Shops and Establishments
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This article is written by Nirmalya Bhattacharya, pursuing a Certificate Course in Labour, Employment and Industrial Laws for HR Managers from LawSikho.com. Here he discusses “What are the changes introduced by the new Shops and Establishments Act in Maharashtra?”. 

Introduction

With the introduction of Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017 (hereinafter referred as MSEA 2017), on December 19, 2017, the previous act, i.e, Maharashtra Shops and Establishments Act 1948 (hereinafter referred as MSEA 1948), has been revoked. If we look into the background and the reason behind enactment of this statute, we will see that in July 2016, Central Government published Model Shops and Establishment (Regulation of Employment and Conditions of Service) Act 2016 and the states were free to adopt the same with necessary state-specific modifications. The introduction of this Model SEA 2016, was having three major reasons behind this – i) to make these legal provisions more contemporary ii) to enhance the ease of doing business and iii) to implement a more or less uniform statute throughout the country.

Maharashtra is the first state to adopt the Model SEA 2016, with few state-specific amendments to remain at the forefront of industrial development and reforms. It is the first state to change the 70 year old statute. Considering the fact that Maharashtra is having two leading commercial and industrial cities of the state – Mumbai and Pune, this is surely a long step forward.

While making the adaptation of Model SEA 2016 and while repealing the earlier applicable statute of 1948, few changes have been introduced.

Applicability of the Act

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

It was applicable to all such establishments irrespective of the number of employees employed.

 

All provisions, except section 7, shall be applicable to all such establishments throughout the state of Maharashtra who is employing 10 or more workers. However, the provisions of section 7 shall only be applicable to such establishments who are employing less than 10 workers

1(3)

It was applicable to all employees employed either directly or through an agency, whether for wages or other considerations. This included the apprentices also but did not include the family member(s) of the employer

2(6)

The definition of employee has been replaced by that of the worker doing CUSTOM (Clerical, Unskilled, Skilled, Technical, Operational, and Manual) work for hire or reward. The terms of employment can be expressed or implied. Unlike the earlier definition of employee, it does not include the apprentices.

Moreover, as per section 3(11), the provisions of the act shall not apply to a worker who is holding the position of confidential, managerial or supervisory nature in an establishment.

2(26)

The MSEA 1948 had separate definitions for Establishment and Commercial Establishment

2(8) and 2(4) respectively

MSEA 2017 has one detailed definition of establishment which includes trades, professions and various businesses specifically.

2(4)

Both MSEA 1948 and MSEA 2017 are not applicable to the factories covered under the Factories Act 1948.

Employer

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

MSEA 1948 simple defined the term Employer as a person owning an establishment or having ultimate control over its affairs

2(7)

MSEA 2017 broadened the scope of the definition and has included the partners of firms, directors of companies and persons appointed by the Government to manage affairs.

2(3)

Registration of Establishment

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Registration was mandatory for all establishments irrespective of the number of employees employed.

The time limit for making the application was 30 days as per section 7(4)

7(1)

It is applicable to establishments where 10 or more workers are employed.

Establishments employing less than 10 workers are not needed to apply for registration. The application is to be made within 60 days.

However, establishments already covered under MSEA 1948 are not required to get registered under MSEA 2017 till the earlier registration is valid

6(1)

The validity of the registration or its renewal was between 1 to 3 years and within 15 days the application for renewal had to be made.

7(2-A) and 7(2-B)

The term of the registration certificate is not fixed. It will be entirely based on the application made by the applicant. However, the maximum tenure can be of 10 years.

The application for renewal of the registration certificate or the renewed registration certificate has to be made at least 30 days prior to the date of expiry with required fees

6(3)

Opening Hours & Closing Hours

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Commercial Establishments were allowed to get opened on or after 8.30 am and closed not later than 9.30 pm unless there was a specific exemption from the State Government. MSEA 1948 had separate provisions w.r.t the opening and closing hours of restaurants, residential hotels, theatres or other places of amusement and entertainment

13

Under MSEA 2017 nothing is prescribed about the opening and the closing hours. State Government holds the authority to notify in the official gazette opening and closing hours for different establishments, premises, shopping complex or mall. This may vary for different area for a different period.

However, For Permit Rooms, Beer Bars, Dance Bars, Hookka Parlors, Discotheques and all such other establishments where liquor in any kind is served or for wine and all kinds of liquor shops, specific opening and closing hours have been specified vide notification dated 19 December 2017.

11

Close Day and Weekly Holiday

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Establishments were required to remain closed for at least one day of the week

18

Establishments can remain open throughout the week without closing the same for one full day. The only clause is that every worker is to be allowed a weekly holiday of at least 24 hours.

16(1)(b)

No provision of Compensatory off in such cases where weekly off is not given

 

In case such a weekly holiday was denied, compensatory off is to be given in lieu of such weekly holiday within 2 months from the date of the weekly holiday along with twice the rate of ordinary wages.

16(1)(c)

Hours of work, Rest Interval, Spread Over Time and Overtime

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

As per MSEA 1948 daily hours of work was limited to 9 hours maximum and weekly it was 48 hours

14(1)

The daily and weekly limit remains same as that of MSEA 1948. However, in case of urgent work, working hours of weekly holidays may be relaxed based on prior permission of the Facilitator

12

Rest interval was provisioned for at least 1 hour for every 5 hours of work performed. Though in case of employees engaged in the commercial activity of any factory the rest interval was of at least half an hour.

15 and 15(a) respectively

Rest interval has been reduced to half an hour for the adult workers employed in any establishment, for every 5 hours of work performed.

12

The spread overtime on any normal day was up to 11 hours for any commercial establishment unless it is exempted specifically.

16

The spread over time has been reduced to 10½ hours on a normal day. However, it can be extended up to 12 hours when the work is of intermittent or urgent nature.

14

In MSEA 1948 the accumulated overtime hours was maximum up to 6 hours in a week. The hours shall be calculated beyond 9 hours a day or 48 hours a week

14(2)

In MSEA 2017 the accumulated overtime hours is allowed maximum up to 125 hours in a period of 3 months. The hours shall be calculated beyond 9 hours a day or 48 hours a week

15

 

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Holidays, Leaves and Leave Encashment

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

4 paid holidays in a calendar year – 26th January, 1st May, 15th August and 2nd October

35(4)

8 paid holidays in a calendar year – 26th January, 1st May, 15th August and 2nd October and 4 others as will be mutually agreed upon between the workers and the employer. These are to be communicated before the commencement of the year.

18(7)

No Provision for Casual Leaves

 

As per MSEA 2017, 8 days casual leave is allotted in a calendar year which is to be credited to the worker’s leave data on a quarterly basis. If unavailed, those leaves will lapse at the end of the year

18(2)

As per MSEA 1948, 21 days of annual leaves with wages were allowed to employees who have worked for at least 240 days in a year.

35(b)

As per MSEA 2017, 1 day of annual leave with wage has been allotted for every 20 days of work performed provided that the worker has worked for at least 240 days in the preceding calendar year. This is parallel to the provision of annual leave with wages under the Factories Act 1948.

18(3)

Annual leave accumulation was allowed up to 42 days

Proviso of 35(b)

Annual leave accumulation is allowed up to 45 days

18(5)

No provision for annual leave encashment

 

In case of refusal of annual leave by the employer (subject to application 15 days in advance), the worker shall get the right to encash the number of annual leaves, as per section 18(3), in excess of 45 days. 

18(6)

Compensatory off for Festival Holidays

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

As per MSEA 1948, employees, for working on designated festival holidays was provided with a compensatory off plus twice the amount of wages for that day

35(4)

The provision (i.e., as per section 35(4) of MSEA Act 1948) is applicable for the workers as per MSEA Act 2017.

 

18(7)

 Working of Women Workers

Maharashtra Shops and Establishment Act 1948

Maharastra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Women employees were prohibited from  working beyond 9.30 pm

33(3)

Women workers are allowed to work after 9.30 pm subject to fulfilment of the following conditions

  1. Consent of the woman worker has been obtained
  2. The employer provides adequate safety and protection of honor & dignity.
  3. The employer provides enough protection from instances of sexual harassment at the workplace.
  4. Women workers are provided with proper transportation facility from their workplace to their doorstep by the employer.

However, the state government can prohibit the employment of women workers after 9.30 pm and before 7 am of the following day for any business or trade or occupation in such areas as deem fit.

13

Double Employment

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Double employment on a holiday or during leave had been prohibited

65

No such provision for the prohibition of double employment

 

Termination of Employment

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Employer was needed to provide 

  1. 30 days notice period or payment in lieu of the same to employees who had been in continuous employment for at least one year.
  2. 14 days notice period or payment in lieu of the same to employees who had been in continuous employment for less than a year but more than 3 months

66(a) and 66(b) respectively

No provision

 

Inspection and Enforcement

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Inspectors were appointed for implementation of the provisions of MSEA 1948

48

Instead of Inspectors MSEA 2017 has introduced Facilitators.

  1. The State Government shall appoint the Chief Facilitator for the state and other Facilitator(s) having a specific demographic area within the State.
  2. The main objective of the Facilitator is to advise the employers and the workers towards better compliance of the act.
  3. Instead of inspection at any reasonable time based on the discretion of the labour authorities, inspections will be done on a random web-generated way.

28

Offences & Penalties

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

For statutory violations of the provisions of the act, the penalties were ranged from Rs.1000/- to Rs.15000/-.

52 to 57

For statutory violations of the provisions of the act, the penalties are ranged from Rs.1,00,000/- to Rs.5,00,000/-. In case the contravention is continued, additional fine of Rs.2000/- per day shall be imposed. However, the total fine shall not exceed Rs.2000/- per worker employed

29 to 31

No imprisonment provision was their under MSEA 1948

 

MSEA 2017 states that if the employer is found guilty in case of contravention of any provision(s) of the act that has resulted in the bodily injury or death of the worker, the employer will be awarded punishment of imprisonment up to 6 months or fine not less than Rs.2,00,000/- and up to Rs.5,00,000/- or with both.

30

Identity Card

Maharashtra Shops and Establishment Act 1948

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2017

Legal Provision

Section

Legal Provision

Section

Identity Card to be provided to the employees by the employer for any residential hotel, restaurant or eating house.

25

Identity Card to be provided to the workers by the employer for any establishment. Apart from employer’s and worker’s basic details, it must contain worker’s blood group and Aadhaar card number

17

New Provisions in MSEA 2017

  • Displaying a list of workers in the managerial, supervisory or confidential role either in the website of the employer or at a conspicuous place of the establishment. These workers will be covered within the scope of the act. [Section 3(11)]
  • Casual Leaves of 8 days in a calendar year. [section 18(2)]
  • In line with the Equal Remuneration Act 1976, MSEA Act 2017 brings the provision of no discrimination for women workers in matters like recruitment, promotion, wage, training or transfer. [Section 13(1)]
  • Earn Leaves shall not be calculated for the availed maternity benefit of the women workers. However, these days shall be taken into consideration for computation of 240 days in a year. [Section 18(8)(b)]
  • Crèche Facility for establishments employing 50 or more workers. A group of establishments may operate a common crèche within a radius of one kilometre, subject to prior conditional permission by the Chief Facilitator. [Section 23]
  • Canteen Facility is to be provided by the employer where at least 100 workers are employed. A group of establishments may operate a common canteen, subject to prior permission by the Chief Facilitator [Section 24]
  • Employer has the discretionary power to run any department or any section of the same in more than one shift. The worker will get the work in any shift, as will be decided by the employer. [Section 16(1)]
  • Employers are now permitted to keep records in electronic format. They will be required to submit duly signed hard copies of the same to the Facilitators upon demand at the time of inspection. [Section 25(2)]
  • MSEA 2017 states that if the employer is found guilty in case of contravention of any provision(s) of the act that has resulted in the bodily injury or death of the worker, the employer will be awarded punishment of imprisonment up to 6 months or fine not less than Rs.2,00,000/- and up to Rs.5,00,000/- or with both. [Section 30]

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