THE BOMBAY SHOPS & ESTABLISHMENTS

ACT, 1948

- Ms. SONI CHARDE

ROLL NO. 866

INTRODUCTION• Legislation to regulate conditions of work in shops

& commercial establishments has been in force in the State of Maharashtra for nearly 71 years.

• The first Shop Act of the State was enacted in 1939.

• By repealing the old "Bombay Shops & Establishments Act, 1939", a new enactment known as "The Bombay Shops & Establishments Act, 1948" was brought into force from 11th January 1949 on the basis of Mr. Shantilal Shah’s Committee’s Report.

• The present Shop Act of 1948, is an improved version of the 1939 Act.

Definition Of a Shop • Shop is, an establishment where goods are

sold or an establishment where services are rendered to the Customers.

• A place where services are sold on Retail basis is also called a Shop. Therefore, an establishment engaged in arranging for musical performance on occasions such as marriages etc., is a Shop.

• An association, which is neither carrying on any trade or business nor rendering any services to outsiders, will NOT come within the definition of the term ‘Shop’ or ‘ Commercial establishment’. Like Association of Flat Owners, Church

Applicability/ Field of Operation of the Act

• The operation of the Act is confined to the municipal areas specified in Schedule I of the Act.

• But the State Government is required to extend the operation of the Act to other areas having population of 25,000 & more.

• The Act applies to all employees (including apprentices) and also covers indirect labour, that is contract labour

• If any shop or commercial establishment situated within the precincts of a factory is not connected with the manufacturing process of the factory, it will be governed by the Shops & Establishment Act. But State Government can apply all or any of the provisions of the Factories Act to such shop or commercial establishment. (S.70)

Types of Premises governed by the Act

Registration of the Establishments

The procedure for getting an establishment registered under the Act is:

• Any establishment situated in Mumbai has to identify in which area/ward the Shop or commercial establishment is situated and accordingly make an application for registration to the respective ward along with prescribed fees. The establishment has to make an application for registration in Form "A" along with following documents.

1.Memorandum & Article of Association

2. List of Directors with their Residential Address

3. Proof of place viz. Copy of Leave & License Agreement.

4.. Proof of payment made to any local authority viz. Copy of Electricity bill,  Telephone bill etc.

5. A/c Payee Cheque towards the Registration Fee depend on the number of employees in favour of ‘Municipal Corporation of Greater Mumbai'

• In case where the establishment is situated outside the Mumbai Municipal Corporation Jurisdiction but within the State of Maharashtra, they have to approach to the office of the Commissioner of Labour for registration in Form "A" together with challan after remitting fees into the Government treasury / State Bank of India as prescribed in the Rules.

• On receipt of the application & the fees, the Inspector, on being satisfied about the correctness of the particulars contained in the application, will register the establishment & will issue a ‘Registration Certificate’.

Time limit of Registration• The Employer of an establishment has to

apply to the Inspector of the local area concern in Form "A" along with prescribed fees and necessary documents for getting the establishment registered under the Act within 30 days on which the establishment commences its work.

• On an application from the employer, the Registration Certificate can be granted for a period of 3 years at a time on payment of fees for that period.

Notice Of Change• 1.In case of any changes in the information furnished at

the time of registration or renewal in Form "A" & "B" respectively, the employer has to notify such changes to the Inspector in prescribed form along with such fees. The changes has to be notified in Form "E" which shall be submitted to the Inspector of the area within 15 days in case of change in employment strength and within 30 days in case of any other changes.

• 2. The notice of change in Form "E" shall be accompanied by the Original Registration Certificate with the necessary documentary evidence. On physical verification of the changes by the Inspector, he shall endorse the changes on the Registration Certificate and return back duly authenticated, within two weeks time.

Renewal of the Registration Certificate

• The Registration Certificate is generally valid up to the end of the calendar year for which it is granted under Sec. 7(2A) it is required to get every Registration Certificate renewed for next calendar year

• The employer has to get the registration certificate renewed every year by applying to the Shop Inspectors in the prescribed form (Form B) accompanied by prescribed fees.

Renewal is made under sec 7(2A) of the Bombay Shops and Establishment Act,1948

• The application for renewal should be made not less than fifteen days before the date of expiry of the registration certificate.

• As per Sec. 7(2B)The registration certificate may be renewed at the option of the employer, for a period of three years

• In such cases the Registration Certificate shall be valid up to the end of 3rd calendar year including and from the year to which it is granted or renewed as the case may be.

• If the renewal application is not made within the period prescribed but it is made within thirty days after the date of expiry of Registration Certificate or the renewed Registration Certificate as the case may be, then in such cases an additional fee as late fee equal to half of the fee payable for normal renewal of Registration Certificate is charged .

Issue of Duplicate Certificate

• In case the Original Registration Certificate is lost, destroyed or defaced the employer shall report the matter to the Sr. Inspector of the area/ward and shall make an application for issue of duplicate certificate along with the fee of Rs. 20/-.

Closing of Establishment• The employer shall inform the Inspector of

the area within 10 days of the closure of the establishment, vide an application on the company letterhead stating the reason of closure and the Original Certificate shall be surrendered along with the application.

• The Government of Maharashtra, by a notification dated 15.12.2003, has revised the fees for :

(1) registration & renewal of registration, & (2) notice of change.

The revised fees are as under:-

Shops & Establishments having

Registration Fees

Fees for renewal of registration certificate per year

Trade refuse charges per year

Nil Employees

Rs. 100/- Rs. 100/- Rs. 300/-

1 to 5 employees

Rs. 300/- Rs. 300/- Rs.900/-

6  to10   employees

Rs.600/- Rs.600/- Rs.1,800/-

11  to  20  employees

Rs.1000/- Rs.1000/- Rs.3000/-

21  to  50  employees

Rs.2000/- Rs.2000/- Rs.6000/-

51  to 100 employees

Rs.3500/- Rs.3500/- Rs.10500/-

101 and above employees

Rs.4500/- Rs.4500/- Rs.13500/-

Fees for Notice of change, to be submitted alongwith Form E

Commercial Establishment Rs.100/-

Shops having Employee Rs.100/-

Shop having no employee Rs.100/-

Residential Hotel Rs.100/-

Restaurants & Eating Houses Rs.100/-

Theatres & Other places of Public Amusement or

Entertainment

Rs.100/-

General point to be noted1.The Registration Certificate to be displayed at the

prominent place in the office premises.

2. It is advisable to display the attested photocopy of the Registration Certificate and the Original may be kept in safe custody of the responsible person of the establishment.

3. The name of the establishment is to be displayed in the local language as well as in English.For the other States the procedure of Registration, Renewal & Notice of Change remains the same, only the Form number and fee defers. The respective location head should collect the information from the office of Commissioner of Labour situated in the area.

Name Board of the Establishment• Rules made under the Act provide that the

name board of every establishment shall be in Marathi in Devanagari Script.

• It is permissible for the employer to have the name board in any other language or script. But the lettering of the name board shall not be less bold than any other language or script.

Trade License

• In the State of Goa and West Bengal before obtaining Shops & Establishment Registration Certificate, employer has to obtain Trade License from the office of Municipal Corporation, on receipt of which the office of the Labour Commissioner shall issue the Shops & Establishment Registration Certificate.

Working Hours of Shops

• The main restrictive provisions of the Act about the working hours off employees in shops & commercial establishments are as follows:-

(a)The general rule about the opening hrs of shops is that they are not allowed to be opened earlier than 7a.m. but shops selling goods like milk, vegetable, fish, etc., are allowed to be opened from 5a.m. onwards.(S.10)

(b)The general rule about the closing hours of shops is that they must be closed at the latest by 8:30p.m. But shops selling goods like pan, bidi etc., are allowed to be kept open up to 11p.m. (S.11)

(c) Commercial establishments are not allowed to be opened earlier than 8:30a.m. & closed later than 9:30p.m. in a day(S.13)

(d) An employee in a shop or commercial establishment cannot be required or allowed to work for more than 9 hrs in a day & 48 hrs in a week. (S.14)

(e) He must be allowed an interval of rest of at least 1 hr after 5 hrs of continuous work. (S.15)

(f) His spread-over cannot exceed 11hrs in a day (Ss.16&17).

(g) Every shop & commercial establishment should remain closed on one day of the week. No deduction can be made from the wages of any employee in a shop or commercial establishment on account of any day on which it has so remained closed. (S.18)

Note: the above restrictions can be relaxed in certain circumstances.

Working Hours of Restaurants

• The main restrictive provisions of the Act about the working hrs of employees in residential hotels, restaurants & eating houses are as follows:

(a)A restaurant or eating house cannot be opened earlier than 5a.m. & closed later than 12 midnight for service. (S.19)

(b)An employee in a reestaurant or eating house may be required to commence work from 4:30a.m. onward. He cannot be required to work after 00:30a.m. (S.19)

(c) An employee in a residential hotel, restaurant or eating house cannot be required or allowed to work for more than 9 hrs in a day & 48 hrs in a week. (S.21)

(d) He must be allowed an interval of rest of at least 1 hr after 5 hrs of continuous work. (S.22)

(e) His spread-over cannot exceed 12hrs in a day (S.23)

(f) He must be given at least one day as a holiday. No deduction can be made from the wages of any employee on account of such holiday. (S. 24)

Working Hours of Theatres

• The main restrictive provisions of the Act about the working hrs of employees in theatres & other places of public amusement or entertainment are as follows:

(a)A theatre or other place of public amusement or entertainment must be closed at least by 00:30 a.m. (S.26)

(b)An employee in a theatre or other place of public amusement or entertainment cannot be required or allowed to work for more than 9 hrs in a day or 48 hrs in a week. (S.28)

(c) He must be allowed an interval of rest of at least 1 hr after 5 hrs of continuous work. (S.29)

(d) His spread-over cannot exceed 11hrs in a day (S.30)

(e) He must be given at least one day as a holiday. No deduction can be made from the wages of any employee on account of such holiday. (S. 31)

Employment Of Children & Women

• The employment of children is totally prohibited. Anybody who is below the age of 15 yrs is considered to be a child. No child can be required or allowed to work whether as an employee or otherwise in any establishment. (S.32)

• Anybody between the age of 15yrs & 17yrs is considered to be young person. No young person can be required or allowed to work, whether as an employee or otherwise, in any establishment-

(a)After 7:00p.m.;

(b)For more than 6 hrs in a day &;

(c)If the work involves danger to life, health or morals. (Ss.33, 34 & 34-A)

• Restrictions are placed on the opening & closing hrs for women as well as on giving them dangerous work. Thus, no woman can be required or allowed to work, whether as an employee or otherwise, in any establishment after 9:30p.m. In other words, women cannot be required or allowed to addend work late in the evening.

• Similarly, no woman working in any establishment, whether as an employee or otherwise, can be required or allowed to perform work involving danger to her life, health or morals. (Ss.33 & 34-A)

Wages For Overtime Work

• When any employee is required to work overtime, i.e. in excess of the limit of hours of work, he must be paid for such a work at double the rate of his ordinary wages.

• The limit of hours of work for the purpose of calculating overtime is 9 hrs in any day & 48 hrs in any week.

• Limit for working overtime shall not exceed 3 hrs & the employer may engage additional number of employees for the purpose of the work beyond the said overtime hours. (S.63)

Leave With Wages

• The main provisions of the Act about the grant of annual leave with wages are as follows:

(a)An employee is entitled to annual leave with pay of 21 days for 240 days of work.

(b)An employee who has not worked for one year is entitled to leave with pay for 5 days for every 60 days of work.

(c)An employee is entitled to be paid before his leave begins, half the amount of his leave pay.

(d)Leave with pay can be accumulated up to 42 days

• A discharged employee is entitled to leave pay for the balance of leave to his credit. (Ss. 35 to 37)

• In addition to annual leave with pay, an employee of a shop or establishment is entitled to a paid holiday on 26th January, 1st May, 15th August & 2nd October every year. (S.35(4))

• An employee who is given a holiday or is on leave in accordance with the provisions of the Act is prohibited from working in any establishment on such holiday or during such leave. (S.65)

Applicability of other ActsPayment of Wages act, 1936• Section 38 of the Bombay shops &

Establishment Act gives power to the State Government to extend the application of the Payment of Wages Act to any class of establishments or any class of employees to which the Bombay Shops & Establishment Act applies. Accordingly, the State Government has extended the application of the Payment of Wages Act to establishments situated in Greater Bombay, Thane, Poona, Sholapur, Kolhapur & Nagpur.

Workmen’s Compensation Act, 1923• According to Section38-A of the Bombay

Shops & Establishments Act,1948, the provisions of the Workmen’s Compensation Act are applicable to the employees or the establishments to which the Bombay shops & Establishments Act, 1948 applies.

• An employee working in a clerical capacity in an establishment to which the Bombay shops & Establishments Act, 1948 applies is entitled to claim compensation under the Workmen’s Compensation Act,1923. by virtue of section 38-A of the Bombay Shops & Establishments Act,1948 he is deemed to be a workman within the meaning of the Workmen’s Compensation Act & therefore, it is not necessary for him to prove that he is a workman under the said Act.

Industrial Employment (Standing Orders)

Act, 1946• According to Section 38-B of the Bombay

Shops & Establishments Act,1948 the provisions of the Industrial Employment (Standing Orders) Act, 1946 in its application to the State of Maharashtra, are applicable to all establishments wherein 50 or more employees are employed & to which the Bombay Shops & Establishments Act,1948 applies.

Maternity Benefit Act, 1961• Section 38-C of the Bombay Shops &

Establishments Act,1948 as well as the proviso to sub-section (I) of Section 2 of the Maternity Benefit Act gives power to the State Government to extend the application of the Maternity Benefit Act to women employees in any establishments or class of establishments.

• Accordingly, the State Government has extended the application of the Maternity Benefit Act to all shops, commercial establishments, residential hotels, restaurants 7 eating houses to which the Bombay Shops & Establishments Act,1948 applies but the Employees’ State Insurance Act does not apply.

NOTE:

If the rights or privileges conferred on an employee under any other law, contract, custom, usage, award, settlement or agreement are more favourable than those conferred under the Shops & Establishments Act, then the former will prevail over the latter. (S.69)

Health & Safety Measures

Every establishment must take appropriate measures as per the provisions of the Act & the rules-

(a)To keep the premises clean;

(b)To keep the premises ventilated;

(c)To keep the premises sufficiently lighted during the working hours;

(d)To protect the premises against fire; &

(e)To provide & maintain a first aid box if a manufacturing process is carried on in the premises (Ss.39 to 42-A)

Powers Of the Inspectors

An Inspector appointed under Bombay Shops & Establishments Act, 1948 has power-

(a)To enter any place which is an establishment;

(b)To make examination of the premises, registers, records & notices;

(c)To take evidence of any person;

(d)If he suspects that an employer has committed an offence under Section 52 or 55, to seize the necessary registers, records or other documents & retain them for a reasonable period for examination thereof or for prosecution of the employer. (S.49)

Termination Of ServiceRequirements:(a)If an employer wants to terminate the services

of any employee who has been in his continuous employment for one year or more, the employer can terminate his services by giving him 30 days’ notice in writing or wages in lieu of such a notice.

(b)If an employer wants to terminate the services of any employee who has been in his continuous service employment for less than one year but more than 3 months, the employer can terminate his services by giving him 14 days’ notice in writing or wages in lieu of such notice. Not required in case of less than 3 months. (S.66)

(c) If the services of an employee are terminated without giving such person any notice or wages in lieu of notice, as per section 66 of the Act, his termination is bad in law & he is entitled to reinstatement with continuity of service & full back wages.

(d) When an employer terminates the services of any employee (by way of Discharge or Dismissal) for misconduct, the employer need not give any notice to the employee. (S.66 Proviso)

Maintenance of Registers

• Form-A {Rule 5}Register showing dates of Lime Washing etc

• Form-H, Form-J {Rule 20(1)} (if opening & closing hours are ordinarily uniform)Register of Employment in a Shop or Commercial Establishment

• Form-I {Rule 20(3)}, Form-K (if opening & closing hours are ordinarily uniform)Register of Employment in a Residential Hotel, Restaurant, Eating-House, Theatre, or other places of public amusement or entertainment

• Form-M {Rule 20(4)}Register of Leave – This and all the above Registers have to be maintained by the Employer

• Visit BookThis shall be a bound book of size 7” x 6” containing at least 100 pages with every second page consecutively numbered, to be produced to the visiting Inspector on demand. The columns shall be:

• Name of the establishment or Employer

• Locality

• Registration Number

• Date and

• Time

Exemptions

Temporary exemption from the “Operation” of the provisions of the Act

Permanent exemption from the “Application” of the provisions of the Act

Government’s power to exempt establishments from the provisions of the Act are as follows:

(a)The Government, by issuing a general notification, can temporarily exempt all establishments from all or some of the provisions of the Act by suspending the operation of such provisions on account of any holidays or festive occasions.

(b)The Government, by issuing a special notification, can permanently exempt any establishment from all or some of the provisions of the Act by making such provisions inapplicable to that establishment on account of the special requirements of that establishment.

(Ss.4 &6)

Government can suspend the operation of the provisions of the Act on account of the following holidays or occasions:-

(a)Diwali

(b)Ganesh Chaturthi

(c)Dasshera

(d)Pateti

(e)Christmas

(f) Ramzan & Ramzan Id

(g)Any occasion on which a public emergency is declared in this behalf by the Government

Conclusion

• Though the present Bombay Shops & Establishments Act, 1948 has undergone several improvements during past several years, it has failed to fulfill the legitimate expectations of its beneficiaries due to its inadequate provisions & unsatisfactory implementation.

• Thus, it has to be reviewed again & should be implemented properly.