Shops & Establishment


 Registration of establishments (Section 6)
(1) Within thirty days from the date on which this Act applies to an establishment, its employer shall send to the Inspector of the area concerned a statement, in the prescribed form, together with such fees, as may be prescribed, containing
(a) the name of the employer, the manager and the person holding positions of management, if any;
(b) [the postal address of and the date of starting the business by the establishment;
(c) the name, if any, of the establishment;
(d) the category of the establishment, i.e. whether it is a shop, commercial establishment, residential hotel, restaurant, eating-house, theatre, or other place of public amusement or entertainment; and
(e) such other particulars, as may be prescribed.
(2) On receipt of the statement and the fees, the Inspector shall, on being satisfied about the correctness of the statement, register the establishment in the register of establishment in such manner as may be prescribed and shall issue in the prescribed form, a registration certificate to the employer. The registration certificate shall be prominently displayed at the establishment.
(3) The Government may, by notification, require renewal of registration certificate issued under this section at such intervals not being less than five years, and on payment of such fee as may be prescribed.

Scope of The Shop and Establishment Act.
  • Employers must send a statement in prescribed form along with a prescribed fee to Inspector of the local area, within 30 days of the commencement of the establishment.
  • A state legislation; each state has framed its own rules for the Act.
  • The statement contains, i) name of employer or manager if any; ii) the postal address of the establishment; iii) category of the establishment; iv) any other particulars as may be prescribed.
  • The establishment may then be registered if the Inspector id satisfied with the correctness of the statement and the Certificate of Registration is issued.
  • Certificate of Registration is prominently displayed at the premises of the establishment.
One of the important regulation to which most businesses in India are subject to is the Shop and Establishment Act, enacted by every state in India. The Act is designed to regulate payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in shop and commercial establishments. In this article we look at the salient features of the Shop and Establishment Act.
The Shop and Establishment Act is regulated by the Department of Labor and regulates premises wherein any trade, business or profession is carried out. The act not only regulates the working of commercial establishments, but also societies, charitable trusts, printing establishments, educational institutions run for gain and premises in which banking, insurance, stock or share brokerage is carried on. This act regulates areas such as working hours, rest interval for employees, opening and closing hours, closed days, national and religious holidays, overtime work, rules for employment of children, annual leave, maternity leave, sickness and casual leave, etc.,
Premises Regulated by the Shop & Establishment Act
The Shop and Establishment Act in India is promulgated by the state and may slight differ from state to state. However, as per the Act, all shops and commercial establishments operating within each state are covered by the respective Shop & Establishments Act. Shops are defined as 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 work place. Establishments are defined as shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment. Further, establishments as defined by the act may also include such other establishments as defined by the Government by notification in the Official Gazette. However, factories are not covered by the shops & establishments act and are regulated by the Factories Act, 1948.
Any shop or commercial establishment that commences operation must apply to the Chief Inspector for a Shop and Establishment Act License within the prescribed time. The application for license in the prescribed form must contain the name of the employer, address of the establishment, name of the establishment, category of the establishment, number of employees and other relevant details as requested. On submission of the application and review by the Chief Inspector, the shop or commercial establishment will be registered and a registration certificate will be issued to the occupier. The registration certificate must be prominently displayed at the shop or commercial establishment and renewed periodically, as per the act. In case the shop or establishment would like to close down the business, the occupier should notify the Chief Inspector in writing within fifteen days of the closing. The Chief Inspector after reviewing the request for closure can remove the shop or commercial establishment from the register and cancel the registration certificate
Change to be communicated to Inspector (Section 7)

It shall be the duty of an employer to notify to the Inspector, in the prescribed form, any change in respect of any information contained in his statement under section 6 within seven days after the change has taken place. The Inspector shall, on receiving such notice and on being satisfied about its correctness, make the change in the register of the establishment in accordance with such notice and shall amend the registration certificate or issue a fresh registration certificate, if necessary.

 Opening and closing hours (Section 9)
(1) No shop or commercial establishment shall on any day
(a) be opened earlier than such hour as may be fixed by the Government by a general or special order in this behalf;
(b) be kept open later than such hour as may be fixed by the Government by general or special order in this behalf:

Provide that any custom; who was being served or was waiting to be served at the closing hour so fixed in any shop may be served in such shop during half hour immediately following such hour.

No child to work in any establishment (Section 24)
No child shall be required or allowed to work whether as an employee or otherwise in any establishment notwithstanding that such child is a member of the family of the employer.

Young persons and women to work between 7 a.m. to 9 p.m. (Section 25)
No young person or women shall be required or allowed to work whether as an employee or otherwise in any establishment before 7 a.m. and after 9 p.m. notwithstanding that such young person or women is a member of the family of the employer.
Prohibition of employment of young persons and women in dangerous work (Section 25-B)
No young person or woman working in any establishment, whether as an employee or otherwise, shall be required or allowed to perform such work as may be declared by the State Government, by notification, to be work involving danger to life, health or morals.]
Employee's right for casual and privilege leave (Section 26)
(1) A person employed in an establishment to which this Act applies shall be entitled
(a) after every 12 month's continuous employment, to privilege leave for a total period of one month; and
(b) in every year to casual leave for a total period not exceeding 14 days:

Provided that the leave under sub-clause (a) shall not at any time accumulate for a total period exceeding 3 months:
Provided further that holidays under sections 13, 18 or 23 falling during the period of such leave shall be included in the leave so granted:
Provided further that casual leave shall not be combined with privilege leave

(2) If any employee entitled to leave under sub-section (1) is discharged by his employer before he has been allowed leave or if, having applied for and been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him the amount payable under section 27 in respect of the leave.

(3) If any employee entitled to leave under sub-section (1) is refused the leave, he may give intimation to the Inspector or any other officer authorized in this behalf by the Government regarding such refusal. The Inspector shall enter such information in a register kept in such form as may be prescribed.
Explanation — An employee shall be deemed to have completed a period of twelve month's continuous service in an establishment notwithstanding any interruption in the service during those twelve months brought about by sickness accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lockout or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days in the aggregate, and authorized leave shall be deemed not include any weekly holiday allowed under this Act which occurs at the beginning or end of an interruption brought about by the leave.
Employer to produce registers records, etc. for inspection (Section 43)
Every employer shall on demand produce for inspection of an Inspector all registers, records and notices required to be kept under and for the purposes of this act.

Maintenance of registers and records and display of notices (Rule 20)
(1) Every employer shall maintain a register of employees showing attendance, wages over-time work, fines and other deductions an account of wages in respect of each employee under him in Form ‘N’.
(2) Every employer shall exhibit in his establishment a notice in Form O, specifying the day or days on which his employees shall be given a holiday. The notice shall be exhibited before the persons to whom it relate cease work on the Saturday immediately preceding the first week during which it is to have effect.
(3) Every employer shall exhibit in his establishment a notice specifying the daily hours to be worked and intervals for rest and meals to be allowed to the employees, if any such notice shall be in Form P and shall be exhibited not later than the closing hour on the Saturday immediately preceding the first week in which the hours of work shall be as specified in such notice. It shall continue to be exhibited so long as the hours of work specified in it are observed.
(4) Every establishment shall prominently display in a conspicuous place a notice showing the day of the week on which the establishment shall remain closed. If there is an alteration in such a day the employer shall give notice to the Inspector in Form Q and exhibit a copy of such notice.
(5) If any day notified as holiday under sub-section (1) of section 13 has been substituted being a day of public festival under provisions of sub-section (2) of the said section, the employer shall give notice of the change to the Inspector in Form R and exhibit a copy of such notice.
(6) Every employer shall exhibit in his establishment in English or in the language of the majority of persons employed by him a copy of leave rules applicable to his employees.
(7) Every employer shall maintain a register in which the original copies of inspection notes handed over by the Inspector to the employer under rule 19 shall be incorporated serially in order of dates and he shall produce it whenever required to do so by an Inspector.

Misconduct (Rule 14)
For the purposes of the proviso to sub-section (1) of section 58, the following acts and omissions shall be treated as misconduct on the part of the employees
(a) willful insubordination to or disobedience of whether alone or in combination with others, any lawful and reasonable order of a superior;
(b) theft, fraud or dishonesty in connection with the employer's business or property;
(c) willful damage to or loss of employer's goods or property;
(d) taking or giving bribes or any illegal gratification in connection with the employer's business;
(e) habitual absence without leave or absence without leave for more than 10 days;
(f) habitual late attendance;
(g) habitual breach of any law applicable to the establishment;
(h) riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline;
(i) habitual negligence or neglect of work;
(j) striking work or inciting others to strike work in contravention of the provisions of any law or rule having the force of law.

Overtime (Rule 21)
The employer shall maintain an account of overtime work taken from the employees from day to day and payments for such overtime in the register in Form N.