Sunday, 17 September 2017

Maharashtra Shops and Establishments Act, 2017

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

The Government of Maharashtra, vide notification dated 7th September 2017 has notified the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017.

Key Highlights:

  • Definition of “Establishment”: Under the Act of 2017 “establishment” u/s 2(4) continues to include: “society registered under the Societies Registration Act, 1860, and a charitable or other trust, whether registered or not, which carries on, whether for purposes of gain or not”.
  • Applicability: However, as a welcome change, the regulation of conditions of service and employment under the 2017 Act does not apply to establishments employing less than ten workers. This is in contrast with the 1948 Act which applies to all establishments irrespective of the number of workers employed. Thus, this amendment comes as a significant compliance relief to smaller entities.
  • Online Application: To register an establishment, the employer shall now submit an online application within sixty days from commencement of the 2017 Act or commencement of business. Upon acceptance of the application and verification, a ‘Labour Identification Number’ (LIN) will be issued by the Facilitator. The 1948 Act does not provide for an online system of registration. Also, 1948 Act mandates registration within thirty days from commencement of business.
  • Facilitators’: The 2017 Act provides for appointment of ‘Facilitators’, instead of ‘Inspectors’ to enforce the provisions of the 2017 Act. In addition to the duties of the Inspectors, the Facilitators shall also advice the employers and workers for complying with the provisions of the 2017 Act. In addition to powers of search and seizure, ‘facilitators’ will also be responsible for advising workers and employers for better compliance.
  • Validity: The validity of registration certificate granted by the Facilitator under 2017 Act shall be for a period requested by the applicant, for a maximum of ten years. Further, the time period for submitting an online application for renewal of the certificate is not less than thirty days. Validity period of the certificate under the 1948 Act is between one to three years, with a prescribed period of fifteen days for making an application for renewal.
  • Cancellation: A new provision providing for cancellation of registration has been introduced. Registration obtained through misrepresentation or suppression of material facts or by submitting false or forged documents or false declaration or by fraud, gives ground to the Facilitator to cancel registration of the establishment. The employer shall notify the Facilitator within thirty days of closure of business, as opposed to ten days prescribed under 1948 Act.
  • Opening & Closing Hours: The 2017 Act provides that opening and closing hours of different classes of establishments, different premises, shopping complex or malls, will be prescribed by the State Government by notifying separate rules. This is opposed to the 1948 Act, which provides a uniform opening time, unless prescribed otherwise, for all establishments. Taking cue from market demand, the Government is expected to come up with separate opening and closing hours for different classes of establishments such as malls and shopping complexes. Though a specific prohibition on discrimination with women workers has been introduced, an option has been provided to extend their working hours with their consent. This reflects a great degree of flexibility being introduced in the functioning of shops and establishments in the State of Maharashtra. Accordingly, a new provision prohibiting discrimination against women workers, and separately regulating their conditions of work has been introduced. The provision prohibits discrimination of women in matters of recruitment, training, transfers or promotion or wages. Further, it provides that woman workers shall not be allowed to work except between 7:00 am and 9:30 pm. However, women workers may be allowed to work beyond these hours, if they consent and the employer ensures adequate facilities to provide them with adequate security. The 1948 Act only provides that women shall not be allowed to work beyond 9:30 pm, though certain industry exceptions were made by the Government in the Schedule to the 1948 Act.
  • Leave: The provisions on leave have been streamlined by providing casual leaves and earned leaves to workers. Further, the welfare provisions have also been widened, with a specific duty created on the employer to provide adequate health and safety measures. The 2017 Act has thus incorporated provisions to improve the conditions of service for the workers. Accordingly, a new provision has been introduced, which entitles every worker to eight days of casual leave in a year. The workers can accumulate earned leave up to a maximum of forty-five days. Further, every worker who has worked for a period of two hundred and forty days or more shall be allowed paid leave for a number of days calculated at the rate of one day for every twenty days of work performed during the previous year.
  • Electronic records: Registers can now be maintained electronically as well, by the employers.
  • Health & Safety: The 2017 Act creates a specific obligation on every employer to take measures relating to the health and safety of the workers, including prevention of accidents. As opposed to the 1948 Act, these measures have been broadened further, and include cleanliness, lighting, ventilation and prevention of fire, first aid, canteen, creche facilities, etc.
  • Penalties: The 2017 Act provides for enhanced penalties for violation to a maximum fine of INR 100,000 and in the case of a continuing contravention, with an additional fine which may extend to INR 2,000 every day. This is in stark contrast to the 1948 Act, which provides for a minimum fine of INR 1,000 and a maximum fine of INR 5,000 for violations.

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