Key Amendments to Maharashtra Shops and Establishments Act 2017
On 26th June 2016, the Union Cabinet of Government Of India passed Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016 (Model Bill) as a part of its initiatives on ‘ease of doing business’ and digitization. The bill in itself is not a binding requirement, State Governments were expected to either adopt the Model Bill or adapt their existing laws to it, after accounting for regional requirements.
Salient features of Model Bill are as follows:
1. It will cover establishments employing 10 or more workers except for manufacturing units
2. To provide freedom to operate 365 days in a year and opening/closing time of establishment. This could mean that shops and establishments can operate 24/7
3. Women to be permitted during the night shift if necessary amenities and adequate protection of their dignity exists
4. Powers of government to make rules for adequate measures to be taken by the employer for safety and health of workers
5. No discrimination against women in the matter of recruitment, training, transfer or promotions.
6. Five paid festival holidays in addition to national holidays etc.
7. Lavatory, crèche, first-aid and canteen by a group of establishments, in case it is not possible by individual establishments
8. Model Bill to bring about uniformity in legislative provisions, making it easier for all the States to adopt it
9. To ensure uniform working conditions across the country and ease of doing business, generate employment opportunities
In the due course of time, Maharashtra became the first State to modify its shops and establishments legislation based on the Model Bill. The Government of Maharashtra has issued Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (hereinafter referred to as the "Amendment Act") vide notification dated September 07, 2017. The Amendment Act extends to the whole of the State of Maharashtra and has come into force on 19th December 2017. The Amendment Act has repealed the Maharashtra Shops & Establishments Act, 1948 (hereinafter referred to as the "Act"). The law is applicable to all commercial establishments in the state, (not covered under the Factories Act), which employ 10 or more workers.
Under the New Act, the term ‘employee’ has been replaced with the term ‘worker’ and the definition has also changed significantly. ‘Worker’ under the New Act has been defined on the same lines as the term ‘workman’ under the Industrial Disputes Act, 1947 (ID Act). Persons in ‘positions of confidential, managerial or supervisory character’ would not be included within the definition of ‘workers’ and employers would be required to list out such individuals on their website or other conspicuous places in their establishment. Employers would also have to send a list of such persons to the specified authority. Further, while the 1948 Act applies even to individuals ‘employed through an agency’ (i.e. contract workers), the New Act would be limited to workers directly ‘employed’ by the establishment.
Key Amendments are discussed below:-
Registration and Licence
Firms that employ more than 10 workers must obtain a license under the Maharashtra Shops and Establishments Act within 60 days after the new Act comes into effect or once a firm’s current license expires. The registration under the act shall not be applicable for establishments having less than 10 employees. However, the same shall not be applicable for establishments already registered and having the valid S&E and till the expiry of the said registration. Establishments which employ less than 10 workers shall give intimation to the Facilitator appointed under the Amendment Act in a prescribed format. The registration can be done online, and all records will be maintained electronically. Further, the commercial entity can determine the validity period of its registration, which cannot exceed 10 years.
No women shall be discriminated in the matter of recruitment, training, transfers, promotion, and wages (earlier, there was no such provision). Additionally, women worker shall not work in any establishment except between 07:00 AM and 09:30 PM. However, women workers with their consent shall be allowed to work between 09:30 PM and 07:00 AM, in any establishment in which adequate protection of their dignity, honour, and safety, protection from sexual harassment and their transportation from the establishment to the doorstep of their residence as may be prescribed are provided by the employer or his authorized representative or manager or supervisor. The State Government may, by notification in the Official Gazette, in the public interest, prohibit or regulate the employment of women workers after 09:30 PM and before 07:00 AM in such shops, establishments, hotels, restaurants, residential hotels, permit rooms, bars, spa-massage parlours, lodges or any business or any trade or occupation in such area or areas as it may deem fit.
Leave and Holidays
Workers are allowed one day of earned leave for every 20 days of work, (previously, employees were entitled to 21 days of earned leave in a year) and 8 days of casual leave (earlier there was no such provision for casual leave). Workers shall be entitled to holidays on 26th January, 01st May, 15th August and 02nd October and FOUR such other festival holidays, agreed by the employer and workers as per the nature of the business, before the commencement of the year (previously, there was no provision for festival holidays). Maximum accumulation of Earned Leave shall not exceed 45 days. In case the worker applies for earned leave and not granted by the employer, the earned leave which exceeds 45 days to be encashed at the rate of actual wages. At the time of separation, the earned leave which is due to a worker should be encashed (earlier employees were allowed to accumulate Earned Leave up to 42 days and there was no such provision for encashment in case the leaves exceeds the accumulation limit).
Working Hours and Overtime
The State Government may fix, by notification in the Official Gazette, opening, and closing of different classes of establishments and for different premises, shopping complex or mall or for different area or areas and for a different period. No adult worker shall be required or allowed to work in any establishment for more than NINE hours in any day and 48 hours in any week. The total number of overtime hours shall not exceed 125 hours in a period of THREE months (previously, overtime hours were limited to SIX hours in a week). The spread-over of an employee in an establishment shall not exceed 10.5 hours in any day. If a worker is entrusted with urgent work, the spread over shall not exceed 12 hours. If an employee is denied weekly holiday, the compensatory leave in lieu thereof shall be given within TWO months of such weekly holiday (earlier there was no such provision). No adult worker shall be asked to work continuously for more than FIVE hours unless he has been given a break of not less than half an hour. However, the working hours or weekly holiday may be relaxed in case of work of urgent nature with the previous permission of the facilitator.
The employer of an establishment shall furnish to every worker an identity card. Such card shall contain the following and such other particulars as may be prescribed, namely – the name of the employer; the name, if any, and the postal address of the establishment; name and age of the worker; Date of Joining; Department and Nature or Work, Designation, the signature (with date) of the employer or manager; Blood Group and Aadhaar Card Number.
The Amendment Act has provided for welfare provisions of workers wherein employers have to take measures relating to the health and safety of the worker including cleanliness, lighting, ventilation, and prevention of fire. Also, employers have to ensure the provision of adequate supervision of the workers employed in the establishment. Some of the welfare provisions introduced are –
1. Establishment wherein 50 or more workers are employed, there shall be provided and maintained a suitable room or rooms as crèche for the use of children of such workers. Provided further that, if a group of establishments, so decide to provide a common crèche within a radius of one kilometer, then, the same shall be permitted by the Chief Facilitator, subject to such conditions as may be specified in the order.
2. Establishments employing 100 or more workers must provide and maintain a canteen for the use of its workers.
3. Provision of separate washroom facilities for men and women.
4. Provision of first-aid facilities in the place of work.
5. Provision and maintenance of sufficient and clean drinking water at suitable points, conveniently situated for all persons employed in the establishment.
Rights of Facilitators
The Amendment Act provides for the appointment of Facilitator. The functions of the Facilitator include without limitation to making examination of premises and of any prescribed registers, records and notices, examination of person who is found in any premises of the establishment and whom, the facilitator has reasonable cause to believe, is a worker of the establishment, search, seize or take copies of register, record of wages or notices and exercise such other powers, as may be prescribed. The penalty for contravention of the Amendment Act and the rules have been enhanced to INR 100,000 and in case of continuing contravention an additional fine which may extend to INR 2,000 for every day during which the contravention continues. Further, for repeat offenders, the fine may extend to INR 200,000.
The Amendment Act provides establishments with greater flexibility in managing their compliances using electronic methods. However, some provisions such as crèche, displaying a list of persons and computation of leave may pose compliance challenges for employers. There would also be a greater onus on employers to ensure that compliances are up to the mark under the risk of significantly larger penalties. However, it is useful to note that by not regulating the working conditions in firms engaging less than 10 workers, the Amendment Act, provides significant compliance relief for micro, small and medium-sized firms (MSME’s).
The author Sanjeev Himachali is an expert in HR and IA. For any clarification and discussion, contact Sanjeev.firstname.lastname@example.org