An Overview of Shop and Establishment Act

Last Updated On: July 10, 2021, 11:26 p.m.
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SHOP AND ESTABLISHMENT ACT

Introduction-

The Act is designed to regulate the payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in the shop and commercial establishments.

 

What is a Commercial Establishment?

According to the Shop and Establishments Act, a commercial establishment is a place where any trade, profession, business or any work related to any of this is undertaken. Under the Act, a commercial establishment can be,

  • A society registered under SRA 1860
  • Registered or unregistered trusts (Charity/Non-charity)
  • Journalistic or related printing businesses
  • Contractors & auditors
  • Quarries and mines not included in the Mines Act 1952
  • Private educational institutions
  • Cinema theatres and entertainment halls
  • Businesses such as banking, insurance, stocks exchange etc
  • Restaurants and cafes
  • Hotels and clubs
  • Any other entertainment-related businesses

 

 ‘Commercial Establishment’, as given in the Act is:

  • Commercial Sectors such as banks, trading or insurance establishments.
  • Any establishment where people are employees provide service or do office work.
  • Hotels, small cafes, boarding houses, refreshment houses.
  • Entertainment places such as amusement parks, theatres, etc.

 

 

Applicability of Shop & Establishment Act

  • Shop and Commercial Establishment Act applies to all shops, restaurants, eating houses, hotels, theatres, places of public entertainment and amusement and other commercial establishments.
  • All the aforementioned establishments need to register under the Act within 30 days of the commencement of work.

The Shop and Establishment Act essentially regulates the following –

  • Working hours, overtime, leave policy
  • Rest interval for employees
  • Opening and closing hours
  • Closed days, national and religious holidays
  • Annual, maternity, sickness, and casual leave
  • Time and conditions of payment of wages
  • Deductions from wages
  • Dismissal of employment
  • Cleanliness, Lighting and ventilation
  • Precautions against fire
  • Accidents reporting and Record keeping
  • Maintain various Registers
  • Display of notices/certificate
  • Rules for the employment of children

 

How to register an establishment under this act?

1. As each state in India has its own Shop Act and follows separate regulations. The process, fee structure, documentation may be different depending on the State regulations.

2. On starting a Shop or Establishment, one needs to apply for Shop Act Registration within the stipulated period set by State regulations.

3. Application is to be submitted to the Chief Inspector in the prescribed Form according to the state regulations, containing following details:

  • Name of the employer
  • Name of the establishment
  • Address of the establishment
  • The category of the establishment
  • Number of employees
  • The date on which the establishment started working
  • The Labour department of each state is responsible for the establishment act processing and registration.
  • Usually, the district labour officer takes charge as the Inspector in charge under the Shop and Establishment Act.
  • The inspector has the authority to grant shop and establishment registration certificates.
  • If your registration meets certain requirements put forth by the inspector in charge, the employer will receive the registration certificate.
  • The registration certificate must be displayed at the shop or establishment.
  • It must be renewed periodically.

 

Documents Required for Registration:

  • Photo of the Shop/Establishment that must have the name board at the entrance.
  • Incorporation Certificate.
  • MOA & AOA of Company or LLP Agreement of the Company or LLP.
  • PAN card/Passport/ Aadhar Card/ Driving License/ Voter ID Card.
  • List of the Directors/ Partners and their ID and Address proof.
  • Commercial address proof.
  • Board Resolution or Partners Consent.
  • Details of all the employees.
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