Model Shops and Establishment Bill

The Union Cabinet, led by Prime Minister Shri Narendra Modi, after extensive discussions with employee representatives, businesses, State Governments, and the general public, has approved the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016. The Bill has not yet been sent to the State Governments and Union Territories, enabling them to modify the existing Shops and Establishment Act enforced by each State Government. In this article, we will explore some of the major changes expected from the approval of the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016.

Applicability

The Model Shops and Establishment Bill applies to establishments or businesses employing ten or more workers, except manufacturing units. The operation of manufacturing units would be governed by other acts like the Factories Act. Further, small businesses and establishments employing less than 10 persons are exempt from the application of the proposed Bill.

Employee Benefits

The Model Shops and Establishment Bill mandates that every shop or establishment must provide clean and safe drinking water to its employees on its premises. Furthermore, shops and establishments are required to provide facilities such as lavatories, creches, first aid, and canteens for their employees. These facilities can be provided by a group of establishments if an individual establishment cannot provide them due to space or resource constraints.

Highly skilled workers, such as those employed in IT, Biotechnology, and R&D divisions, would be exempted from the standard daily working hours of 9 hours and weekly working hours of 48 hours, subject to a maximum of 125 overtime hours in a quarter. Additionally, the Bill calls for five paid festival holidays in addition to national holidays for all employees.

Women Employee Empowerment

The current Shops and Establishment Act in force restricts the employment of women in night shifts. The proposed Shops and Establishment Bill seeks to remove many such restrictions, allowing women to work during night shifts. However, if an establishment employs women in the night shift, it must provide safe shelter, adequate transportation, and restrooms for women, ensuring their dignity and protection. Furthermore, establishments cannot discriminate against women in recruitment, training, transfer, or promotions.

Open and Closing Time for Businesses

One of the most significant changes proposed by the Model Shops and Establishment Act is that shops and establishments would have the freedom to operate 365 days a year and function 24/7. According to the existing legislation, the definition of shops and establishments is as follows:

Shop: "shop" means any premises where goods are sold either by retail or wholesale or where services are rendered to customers, and includes an office, a store-room, godown, warehouse or workhouse or workplace, whether in the same premises or otherwise, used in or in connection with such trade or business but does not include a factory or a commercial establishment.
Establishment: "establishment" means a shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment to which this Act applies and includes such other establishments as Government may, by notification in the Official Gazette, declare to be an establishment.

Consequently, restaurants, malls, theatres, and offices will soon be able to operate 24/7 and remain open 365 days a year without any restrictions.

Shops and Establishment Act Registration

With the Model Bill being adopted by the State Governments, shops and establishment act registration is expected to become simpler through an online common registration portal with a simplified procedure. Additionally, the Bill proposes granting powers to the Government to make rules ensuring the safety and health of workers.

This change aims to streamline the process and help establish a more consistent and uniform regulatory framework across different states in India. Ensuring the well-being of workers while also empowering businesses with greater flexibility is at the core of these legislative updates.

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Frequently Asked Questions

Common questions about Model Shops & Establishment Bill.

The Model Shops and Establishment Bill is a proposed legislation approved by the Union Cabinet chaired by Prime Minister Narendra Modi. It aims to provide a model framework for states to modify their existing Shops and Establishment Acts, which govern the working conditions and employment regulations for shops and commercial establishments.

The Model Bill applies to establishments or businesses employing ten or more workers, except for manufacturing units. Manufacturing units would be governed by other Acts like the Factories Act. Small businesses and establishments employing less than 10 persons are exempt from the application of this Bill.

The Bill mandates that shops and establishments must provide clean drinking water, lavatory, creche, first aid, and canteen facilities for their employees. It also allows highly skilled workers in sectors like IT, Biotechnology, and R&D to work overtime up to 125 hours per quarter, exempting them from the 9-hour daily and 48-hour weekly limits. Additionally, it calls for five paid festival holidays for all employees.

The Model Bill removes restrictions on employing women in night shifts, which was previously prohibited under existing Shops and Establishment Acts. However, it mandates that establishments hiring women for night shifts must provide shelter, safe transportation, rest rooms, and ensure adequate protection of their dignity. The Bill also prohibits discrimination against women in recruitment, training, transfer, or promotions.

One of the major changes proposed is that shops and establishments would have the freedom to operate 365 days a year and operate 24/7, without any restrictions on opening and closing times.

The Bill proposes the establishment of an online common registration portal with simplified procedures for shops and establishments to register under the Act. It also empowers the government to make rules to ensure the safety and health of workers.

As per the existing Acts, a "shop" refers to premises where goods are sold (retail or wholesale) or services are rendered to customers, including offices, storerooms, godowns, warehouses, or workplaces used in connection with such trade or business. An "establishment" is a broader term that includes shops, commercial establishments, residential hotels, restaurants, eating-houses, theaters, or other places of public amusement or entertainment.

According to the definitions in the existing Acts, businesses such as restaurants, malls, theaters, and offices can potentially operate 24/7 and 365 days a year without any restrictions under the Model Bill.

While allowing greater flexibility in working hours and operations, the Model Bill also proposes to provide powers to the government to make rules to ensure the safety and health of workers in shops and establishments.

The Model Bill has been sent to state governments and union territories to enable them to modify their existing Shops and Establishment Acts based on the framework and guidelines provided in the Model Bill, to bring uniformity and modernize the regulations governing shops and establishments across the country.