Shops and Establishments

This article is written by Monesh Mehndiratta. The article explains the important provisions of the Punjab Shops and Commercial Establishment Act, 1958, and also provides the objective and purpose of enacting such legislation.


Do you buy things from shops and commercial establishments? 

I am sure everyone does, but have you ever wondered how these shops and other such establishments are regulated? Moreover, the question to be considered is how are these shops and establishments registered, and what are the terms of employment in such shops and establishments?

All these questions paved the way for the present article. The present article deals with one such piece of legislation that provides provisions for regulation, registration, and other rules related to shops and establishments in the state of Punjab. The Punjab Shops and Commercial Establishments Act, 1958, deals with registration, regulation, terms of employment of young persons and women, and wages paid to the employees employed in such shops and commercial establishments. So, let us try and understand the purpose and objective of enacting such legislation and its important provisions.

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Purpose and objective of the Act

The purpose of the Act is to regulate the working conditions in shops and commercial establishments in the State of Punjab. It provides conditions of work and employment in these establishments. It extends to the State of Punjab but is applicable at the first instance to the areas mentioned in the Schedule. 

Non-applicability of the Act

Section 1 provides that the Act is applicable to the whole State of Punjab. However, Section 3 is an exception and provides certain establishments to which the Act is not applicable. These are:

  • Offices of Central or State Government, except for commercial undertakings, railway administration, or local authority, and the Reserve Bank of India.
  • Any railway service, air service, service of water transport, tramway, telegraph, or telephone service, sanitation, or undertaking supplying power, light, or water to the public. 
  • Lawyers’ offices,
  • Dining cars of railway,
  • Any person employed in the above employments,
  • Any employee whose working hours are governed by Factories Act, 1948,
  • Any person with intermittent work,
  • Stamp vendors’ establishments and petition writers. 

Important definitions

The Act provides definitions of some important terms used in the provisions under Section 2. These include terms like commercial establishments, employee, employer, factory, inspector, opening hour, retail trade, shop, spread over, etc. The two most important definitions are explained below:

Employer and employee

The term ‘employer’ is defined under Section 2(vii) of the Act. It means a person who is in charge of owns or controls the affairs of an establishment. The term also includes family members of the employer, manager, agent, or any other person controlling the affairs of the establishment. The employee, on the other hand, means a person who is wholly or principally employed in an establishment, whether permanently, periodically, contractually, or on piece rate wages or commission, even though he does not receive the reward for the labour. However, it does not include family members of the employer, as given in Section 2(vi) of the Act.


A manager is a person who is declared so by the employer of an establishment having five or more employees, where he himself does not work personally, as defined under Section 2(xvi) of the Act.  


The term shop is defined under Section 2(xxv). It means a place where a trade or business is carried on or where services are provided to customers. It also includes offices, store rooms, godowns, sale-depots, or warehouses, either on the same premises or on different premises, that are used in connection with such trade or business. However, it does not include a shop or commercial establishments that are attached to a factory and where the employees are given benefits as mentioned in the Factories Act, 1948. 


The term is defined under Section 2(viii) of the Act. It means a shop or a commercial establishment. Commercial establishment is further defined under Section 2(iv) of the Act. It includes:

  • Premises where any business, trade, or profession is carried out for the purpose of earning profit and includes any journalistic or printing establishments. 
  • Premises in which business of banking, insurance, stocks, shares, brokerage, and produce exchange is being carried on. 
  • Premises used for hotel, restaurant, boarding, theatre, cinema, or other places of public entertainment. 
  • Any other place notified by the government as a commercial establishment. 

Essential provisions of the Act

Employment of young people

The conditions for the employment of young people in shops and establishments are given under Section 6 of the Act. These are:

  • The total number of hours of employment for young people is thirty hours in a week and five hours in a day. This does not include the time for rest and meals, as mentioned in Section 6(1). 
  • Any young person will not be employed for more than three hours continuously, and so must be given an interval of at least half an hour for rest or meal (Section 6(2)). 
  • The government has the power under Section 6(3) to prescribe more conditions with respect to the business of establishment and also the conditions regarding the daily employment period of young people. 
  • If an employer fails to comply with the provision, he will be liable for conviction or a fine of fifty rupees, which may extend to two hundred rupees as given in Section 6(4). 

Working hours

The provision related to hours of employment is given under Section 7 of the Act. According to the section, the hours of employment of any person in an establishment must not exceed forty-eight hours in a week and nine hours in a day. In cases of seasoned or occasional work pressure, if the employee works overtime:

  • The time must not exceed fifty within a period of one quarter and
  • The employee must be paid for overtime, which is equal to twice the rate of normal wages. 

The section also bars an employer from employing any person who has been previously employed on that day or week in another establishment or factory for a longer period of time. In cases of contravention, the employer must prove that he was not aware or could not reasonably ascertain that the person was employed previously in another establishment. Also, the employee is barred from working for more than the hours mentioned in the Act. 

Intervals for rest and meals

The provision related to intervals for rest and meals is given under Section 8 of the Act. Section 6 provided that an employee would not be allowed to work for more than five hours in a day before he had an interval of half an hour to rest or take meals. However, Section 8 gives an exception to this rule, which is chowkidar, watchman, or guard. It also provides that the working hours of an employee will be fixed in such a way that, by including the time for rest and meals, the spreadover must not exceed ten hours a day. 

Opening and closing hours

According to Section 9 of the Act, the opening and closing hours of all classes of employment will be decided by the government, and they might be different for different classes of establishments situated in different areas. However, according to Section 4 of the Act, the above provision is not applicable to:

  • Clubs, hotels, boarding houses, stalls, and refreshment rooms at railway stations. 
  • Barbers and hairdressers’ shops.
  • Establishments dealing with food items. 
  • Chemist shops.
  • Shops dealing with articles required for funerals, burials, or cremations.
  • Places of public entertainment except cinema halls.
  • Establishment of petrol.
  • Tanneries.
  • Oil mills not registered under the Factories Act, 1948. 
  • Brick and lime kilns.
  • Commercial establishments manufacturing bronze and brass utensils.
  • Saltpetre refineries.
  • Cycle stands and repair shops, etc. 

Section 10 further provides that every establishment will be closed on every Sunday, and the government can prescribe any other day as a closed day for the whole State. This is not applicable to the following establishments, according to Section 4:

  • Cinema houses.
  • Establishments of hides and skins.
  • Ice factories.
  • Establishments of motor vehicle services, cycle repairs, spare parts, etc. 
  • Establishments of hire tents, crockery, furniture, gaslights, fans, etc. 
  • Establishments for the retail sale of murmura, sugar-coated gram, reories and other such commodities. 

Section 10 further provides that any establishment may be opened on a close day if:

  • There is a festival. 
  • Employees are paid remuneration that is double their normal wages for working on such days. 

The employer has a duty to inform the prescribed authority about the working hours of employees, interval time, and other necessary information within 15 days of registration of establishment in a prescribed manner. The working hours may be changed by the employer once a quarter in a year, and the same must be informed to the prescribed authority in a prescribed manner 15 days before making such changes. 

Off day of employees in a week and holidays

According to Section 11 of the Act, no employee is allowed to work:

  • Before opening hours and after closing hours.
  • On a close day, as the establishment has to observe a close day. 
  • On one day in a week in any other establishment. 
  • The watchman may be allowed to work on an off day only when he is given one such day in a week. 

Section 12 deals with holidays. It provides the employees of every establishment in the state:

  • Holidays with wages on Independence Day, Republic Day, and Gandhi Jayanti.
  • Three other such holidays on festivals declared by the government with wages. 
  • If an employee is required to work on such holidays, he will be paid double his normal wage calculation per hour. 

Registration of establishments

The following are the steps for registration of establishments in the State as given under Section 13 of the Act:

  • The employer must send the following details in the form of a statement to the prescribed authority in a prescribed manner:
    • Name of employer and manager,
    • Address of establishment,
    • Name of establishment,
    • Persons employed,
    • Other particulars. 
  • The authority will check the correctness of the statement and register the establishment. It will issue a registration certificate to the employer, which must be shown to the inspector if demanded. 
  • The certificate can be renewed every year by March 31, for which the grace time is thirty days. 
  • In case, there is a change in any of the information given in the statement, the employer must inform the authority within seven days of such change, and the authority will make the changes in its register after checking its correctness. 
  • If the establishment is to be closed, the employer will have to inform the same to the prescribed authority within 10 days of closing, who will then remove the name and details of the establishment from the register on being satisfied with its correctness. 

Wage period

A wage period is a period within which wages are paid to employees. Section 16 deals with the wage period and provides that it must be fixed by a person who is responsible for making the payment of wages to the employees. It further provides that no wage period must exceed a month and that wages must be paid before the expiration of the seventh day from the date when wages became due. If any employee is terminated, he must be paid wages within two days of such termination or when he quits, on or before the next payday. 

Deductions from wages

According to Section 17 of the Act, the wages will be paid without any deductions except those authorised under the Payment of Wages Act, 1936

Removal of employees 

Section 22 of the Act provides that no employee will be removed from the establishment unless and until he is served with one month’s prior notice or pay. No such notice is required to be served if the employee is removed due to his misconduct or if he has not been in service continuously for three months. 

In cases of contravention of the above provision, the judicial magistrate may award compensation, which is two months’ salary, to the employee if he has been removed without reasonable cause. No compensation will be given until it has been claimed by the employee within six months of such removal. 

Section 23 further provides that an employee who has been in service for three months continuously is not allowed to terminate or quit the service unless he has given notice to the employer seven days prior. If no notice is served, the employer may forfeit his unpaid wages for seven days and not more. 

Employment of women


Section 30 of the Act provides conditions of work for the employment of women in any establishment in the State. These are:

  • No woman will be allowed to work in any establishment during the night. However, this is not applicable to any establishment engaged in the treatment of sick, destitute, mentally unfit, or infirm people. 
  • No woman will be employed in any establishment for six weeks after her miscarriage or confinement. 

Maternity benefits under the Act

According to Section 31, every woman employed in an establishment in the State continuously for a period of six months or more will be entitled to maternity benefits. The government will set the payment or amount. It will be paid for six weeks before delivery, including the day of delivery, and six weeks after delivery. 

Power of government

The government has the following powers under the Act:

Enforcement and inspection

According to Section 19, the government has the power to appoint officers to make inspections under the Act. These are empowered to:

  • Enter any place of establishment at any reasonable time with assistants.
  • Examine the premises, registers, records, and notices related to establishment. 
  • Any other power prescribed by the government to carry out the purpose of the Act. 

Power to make rules

According to Section 34, the government may make rules regarding:

  • The manner in which registers are to be kept.
  • Officers are required to make inspections and call for necessary information.
  • Rules and regulations regarding which agency and the manner in which prosecution is to be instituted.
  • The manner in which the statement has to be submitted for registration of establishment.
  • The manner in which any notice is to be given to the authority under the Act.
  • The manner in which the employer is required to submit the details of the close day, opening and closing hours, and other particulars. 
  • Health and safety of employees. 

Penalties under the Act

According to Section 26, if any person contravenes the provisions of this Act and no penalty has been prescribed, he shall be liable to pay a fine which is one hundred rupees for the first offence and three hundred rupees for subsequent offences. Also, the fine for every subsequent offence in the same year will not be less than one hundred rupees. 


Shops and commercial establishments play an important role in our daily lives as they easily provide us with the essentials and other necessary materials. If there is no legislation regulating them, it will pose great challenges to the customers. This is why it is necessary to have proper legislation in this regard. The State of Punjab has been successful in enacting one such legislation to regulate shops and commercial establishments in the state. The Act provides terms and conditions of work for the employment of young persons and women in such establishments and other benefits. It also provides penalties if an employer fails to comply with any of the provisions of the Act. This Act can serve as an inspiration for the other states in the country to enact similar legislation in their respective states to regulate shops and other commercial establishments. 

Frequently Asked Questions

Which Act was repealed by the 1958 Act? 

The Act repealed the Punjab Trade Employees Act, 1940, according to Section 35 of the 1958 Act. 

What do you mean by spread over?

According to Section 2(xxvi), the period between the commencement and termination of employment or work is known as spread over. 

What is the meaning of normal wages under the Act?

It means basic wages plus allowances, which include cash, equal to the advantages accruing by the concessional sale, which the worker is entitled to but does not include a bonus. 

Can a child be employed in an establishment under the Act? 

No, a child who has not completed the age of fourteen years cannot be employed in any establishment under the Act. This is also given under Section 29 of the Act. 



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