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| Brief | FAQs |           THE BOMBAY SHOPS & ESTABLISHMENTS ACT, 1948


 

Legislation to regulate conditions of work in shops and commercial establishments has been in force in the State of Maharashtra for nearly 57 year. The first Shop Act of the State was enacted in 1939. The present Shop Act of 1948 is an improved version of the 1939 Act. Though the present Act has undergone several improvements during the last forty eight years, it has failed to fulfill the legitimate expectations of its beneficiaries due to its inadequate provisions and unsatisfactory implementation.

 

What is the field of operation of the Act?: In the first instance the operation of the Act is confined to the municipal areas specified in Schedule I to the Act. But the State Government is required to extend the operation of the Act to other areas having population of 25,000 and more. {Section 1}

 

What types of premises are governed by the Act?: Broadly speaking the premises governed by the Act are shops, commercial establishments, residential hotels, clubs, restaurants, eating houses, theatres and other places of public amusement or entertainment. {Preamble}

 

Is the Act applicable to the establishments of the Central Government and the State Government?: The establishment of the Central Government and the State Government are exempted from all provisions of the Act {Section 4 & Schedule II Entries 1 & 2}

 

Is the Act applicable to a Shop or commercial establishment situate within the precincts of a factory?: If such a shop or commercial establishment is not connected with the manufacturing process of the factory the provisions of the Act will apply to it. Otherwise the provisions of the Factories Act will apply to it. {Section 70}

 

Is an establishment where services are rendered to customers a shop?: According to the definition of a shop, an establishment where goods are sold or an establishment where services are rendered to customers is a shop. {Section 2(27)}

 

Is an establishment carrying on the business of playing music on occasions such as marriages and other social functions a shop?: A place where services are sold on retail basis is also a shop. Therefore, an establishment engaged in arranging for musical performance on occasions such as marriages etc., is a shop.

 

Is an association of flat owners, which is formed to look after the welfare and common interests of the flat owners/residents, a shop or a commercial establishment?: Such an association, which is only for the benefit of its members and 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".

 

Can a church be treated as a shop or commercial establishment?: A church is neither a shop nor a commercial establishment. It will be stranger than fiction to hold that the devotee who goes to the church is a "customer" and the church is a commercial establishment or shop where "services are rendered".

 

What is the procedure for getting an establishment registered under the Act?: (a) The employer of an establishment has to apply to the Inspector of the local area concerned in the prescribed form (Form A) along with the prescribed fees for getting the establishment registered under the Act.

 

(b) On receipt of the application and the fees the Inspector, on being satisfied about the correctness of the particulars contained in the application, will register the establishment and will issue a registration certificate.

 

(c) If there is any change in the said particulars, the employer has to notify the same to the Inspector by applying in the prescribed form (Form E) accompanied by prescribed fees and get the registration certificate suitable amended.

 

(d) The employer has to get the registration certificate renewed every year by applying to the Inspectors in the prescribed form (Form B) accompanied by prescribed fees. {Section 7 & 8 Rule 5 & 8}

 

If an employer, whose establishment is already registered, starts a new business in addition to the original business on the same premises, is he required to obtain a fresh registration for the new business?: As the establishment of the employer is already registered, he has only to notify to the Inspector under section 8 of the Act the change that he has started a new business in addition to the original business on the same premises.

 

Is it necessary for an employer to notify the closing of his establishment?: An employer is required to notify to the Inspector the closing of his establishment within 10 days of his doing so. The Inspector will then cancel the registration of the establishment. {Section 9}

 

What should be done if a registration certificate is lost?: If a registration certificate is lost, destroyed or defaced the employer should obtain a duplicate copy of the certificate by making a necessary application and paying the prescribed fees to the Inspector who had issued the certificate. {Rule 7}

 

What is the provision about the renewal of a registration certificate?: A registration certificate will be valid upto the end of the year for which it is granted. It should be renewed every year. The application for renewal should be made not less than fifteen days before the date of expiry of the registration certificate. A registration certificate may be renewed, at the option of the employer, for a period of three years. {Section 7(2A) & (2AA)}

 

What are the restrictions on the working hours of employees in shops and commercial establishments?: The main restrictive provisions of the Act about the working hours of employees in shops and commercial establishments are as follows:

  1. The general rule about the opening hours of shops is that they are not allowed to be opened earlier than 7 a.m. But shops selling goods like milk, vegetable, fish etc., are allowed to be opened from 5 a.m. onward. {Section 10}

  2. This general rule about the closing hours of shops is that they must be closed at the latest by 8.30 p.m. But shops selling goods like pan, bidi, etc., are allowed to be kept open upto 11 p.m. {Section 11}

  3. Commercial establishment are not allowed to be opened earlier than 8.30 a.m. and closed later than 8.30 p.m. in a day {Section 13}

  4. An employee in a shop or commercial establishment cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 14}

  5. He must be allowed an interval of rest of at least one hour after five hours of continuous work {Section 15}

  6. His spread-over cannot exceed 11 hours in a day. {Subsection 16 & 17}

  7. Every shop and commercial establishment must 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. {Section 18}

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

 

What are the restrictions on the working hours of employees in residential hotels, restaurants and eating houses?: The main restrictive provisions of the Act about the working hours of employees in residential hotels, restaurants and eating houses are as follows:

  1. A restaurant or eating house cannot be opened earlier than 5 a.m. and closed later than 12 midnight for service. {Section 19}

  2. An employee in a restaurant or eating house may be required to commence work from 4.30 a.m. onwards. He cannot be required to work after 00.30 a.m. {Section 19}

  3. An employee in a residential hotel, restaurant or eating house cannot be required or allowed to work for more than 9 hours in a day and 48 hours in a week. {Section 21}

  4. He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 22}

  5. His spread-over cannot exceed 12 hours in a day. {Section 23}

  6. He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 24}

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

 

What are the restrictions on the working hours of employees in theatres and other places of public amusement or entertainment?: The main restrictive provisions of the Act about the working hours of employees in theatres and other places of public amusement or entertainment are as follows:

  1. A theatre or other place of public amusement or establishment must be closed at the latest by 00.30 a.m. {Section 26}

  2. An employee in a theatre or other place of public amusement or entertainment cannot be required or allowed to work for more than 9 hours in a day or 48 hours in a week {Section 28}

  3. He must be allowed an interval of rest of at least one hour after five hours of continuous work. {Section 29}

  4. His spread-over cannot exceed 11 hours in a day. {Section 30}

  5. He must be given at least one day in a week as a holiday. No deduction can be made from his wages on account of such holiday. {Section 31}

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

 

Is there any restriction placed by the Act on the employment of children?: The employment of children is totally prohibited. Anybody who is below the age of 15 years is considered to be a child. No child can be required or allowed to work whether as an employee or otherwise in any establishment. {Section 32}

 

Are there any restrictions place by the Act on the employment of women?: Restrictions are placed on the closing hours for women as well as on giving then dangerous work. Thus no woman can be required or allowed to work, whether as an employee or otherwise, in any establishment after 9.30 p.m. In other words, women cannot be required or allowed to attend 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. {Subsection 33 & 34A}

 

Are there any restrictions placed by the Act on the employment of young persons?: Anybody who is between the age of 15 years and 17 years is considered to be a young person. No young person can be required or allowed to work, whether as an employee or otherwise, in any establishment:

  1. after 7.00 p.m.;

  2. for more than 6 hours in any day; and

  3. if the work involves danger to life, health or morals. {Section 33, 34 & 34A}

What are the provisions of the Act about the grant of annual leave to the employees?: The main provisions of the Act about the grant of annual leave with wages are as follows:

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

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

  3. An employee is entitled to be paid before his leave begins half the amount of his leave pay.

  4. Leave with pay can be accumulated upto 42 days.

  5. A discharged employee is entitled to leave pay for the balance of leave to his credit. { Subsection 35 to 37}

Are the employees of shops and establishments entitled to any additional holidays over and above leave with pay?: In addition to annual leave with pay an employee of a shop or re-establishment is entitled to a paid holiday on 26th January, 1st May, 15th August and 2nd October every year. {Section 35(4)}

 

Is the Payment of Wages Act, 1936 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?: Section 38 of the Bombay Shops and Establishments Act gives power to the State Government to extend the application of the Payment of Wages Act to any class of establishments or any glass of employees to which the Bombay Shops and Establishments 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 and Nagpur.

 

Is the Workmen's Compensation Act, 1923 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?: According to Section 38-A of the Bombay Shops and Establishments Act, the provisions of the Workmen's Compensation Act are application to employees of establishments to which the Bombay Shops and Establishments Act applies.

 

Can an employee working in a clerical capacity in an establishment covered by the Bombay Shops and Establishments Act claim compensation under the Workmen's Compensation Act, 1923? Is he required to prove that he is a workman under the Workmen's Compensation Act?: An employee working in a clerical capacity in an establishment to which the Bombay Shops and Establishments Act applies is entitled to claim compensation under the Workmen's Compensation Act. By virtue of Section 38-A of the Bombay Shops and Establishments Act he is deemed to be a workman within the meaning of the Workmen's Compensation Act and, therefore, it is not necessary for him to prove that he is a workman under the said Act.

 

Is the Industrial Employment (Sanding Orders) Act, 1946 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?: According to Section 38-B of the Bombay Shops and Establishments Act the provisions of the Industrial Employment (Standing Orders) Act, in its application to the State of Maharashtra, are applicable to all establishments wherein fifty or more employees are employed and to which the Bombay Shops and Establishments Act applies.

 

Is the Maternity Benefit Act, 1961 applicable to employees of establishments covered under the Bombay Shops and Establishments Act?: Section 38-C of the Bombay Shops and Establishments Act as well as the proviso to sub-section (1) of Section 2 of the Maternity Benefit Act give power to the State Government to extend the application of the Maternity Benefit Act to women employees in any establishment 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 and eating houses to which the Bombay Shops and Establishments Act applies but the Employees' State Insurance Act does not apply.

 

What are the measures to be taken by an establishment in respect of the health and safety of the employees?: Every establishment must take appropriate measures as

  1. per the provisions of the Act and the Rules:

  2. to keep the premises clean;

  3. to keep the premises ventilated;

  4. to keep the premises sufficiently lighted during working hours;

  5. to protect the premises against fire; and

  6. if a manufacturing process is carried on in the premises to provide and maintain a first-aid box.

What are the powers of the Inspectors appointed under the Act?: An Inspector appointed under the Act has power:

  1. to enter any place which is an establishment;

  2. to make examination of the premises, registers, records and notices;

  3. to take evidence of any person;

  4. if he suspects that an employer has committed an offence under Section 52 or 55, to seize the necessary registers, records or other documents and retain them for a reasonable period for examination thereof or for prosecution of the employer. {Section 63}

What is the rate of wages prescribed under the act 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 a such work at double the rate of his ordinary wages. The limit of hours of work for the purpose of calculating overtime is 9 hours in any day and 48 hours in any week {Section 63}

 

What are the requirements of the Act regarding notice of termination of service of an employee?:(1) If an employer wants to terminate the services of any employee who has been in his continuous service 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 notice.

(2) 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 three months, the employer can terminate his services by giving him 14 days' notice in writing or wages in lieu of such notice. {Section 66}

 

What is the effect of the termination of services of an employee without giving such person notice or wages in lieu of notice as per Section 66 of the Act?: If the services on 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 and he is entitled to reinstatement with continuity of service and full back wages.

 

Is it necessary to give such notice even when an employee is discharged or dismissed for misconduct?: 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. {Section 66 Proviso}

 

What is the effect of other laws conferring on an employee rights or privileges which are more favourable than those conferred under the Shops and Establishments Act?: 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 and Establishments Act, then, the former will prevail over the latter. {Section 69}

 

What type of registers or record is required to be maintained under the Act by an employer?: Every employer or manager of a shop or commercial establishment has to maintain various registers like register of employment, a register of leave, a visit book, etc, as detailed in Rules made under the Act. He has also to maintain certain records and display certain notices as per the Rules. {Section 62 & Rule 20}

 

Is an employee permitted to work in any establishment when he is given a holiday or when he is on leave?: An employee who is given a holiday or who 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. {Section 65}

 

Is the Act applicable to a shop or commercial establishment situate in any factory precincts?: If any shop or commercial establishment situate within the precincts of a factory is not connected with the manufacturing process of the factory, it will be governed by the Shops and Establishments Act. But the State Government can apply all or any of the provisions of the Factories Act to such shop or commercial establishment. {Section 70}

 

Is the establishment of a legal practitioner a commercial establishment?: The professional activity of a legal practitioner could not be included in the definition of "commercial establishment".

 

Is is permissible for the Government to exempt establishments from the provisions of the Act?: Exemptions are of two kinds, temporary exemption from the "operation" of the provisions of the Act and permanent exemption from the "application" of the provisions of the Act are as follows:

  1. 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.

  2. 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 requirement of that establishment. {Subsection 4 & 6}

Can a Nationalized Bank claim exemption from the provisions of the Act?: A Nationalized Bank is not an establishment of the Central Government nor is there any specific exemption from the provisions of the Act for Nationalized Banks as in the case of the Reserve Bank of India and the State Bank of India. A Nationalized Bank cannot, therefore, claim exemption from the provisions of the Act.

 

What are the offences under the Act and punishment for them?: There is a large number of offences under the Act and the majority of them are punishable with fine which would be not less than fifty rupees and which may extend to five hundred rupees. {Subsection 52 to 61}

 

Did the Bombay Shops and Establishments Act, an existing State Act, stand automatically or impliedly repealed on coming into operation of the Motor Transport Workers Act, a Central Act?: The provisions of the two Acts are neither inconsistent nor repugnant and, therefore, there is not question of either automatic or implied repeal of the Bombay Shops and Establishments Act on coming into operation of the Motor Transport Workers Act.

 


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