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Employers’ Duties – New Maharashtra Shops and Establishment Act

Posted by: on 14 December 2018 in Business Strategies, Finance, HR, Human Capital Management, Payroll

This post is part of the Coffee Break Guide to Compliance by Anandan Subramaniam. Please subscribe to the blog updates if you’d like to be notified of these posts. Please comment below with your doubts and queries.

The Coffee Break Guide to Compliance – Vol. 23 {Employers’ Duties – New Maharashtra Shops and Establishment Act}

In line with the progression and change in functioning of shops and commercial establishments in India, the Union Government had revisited the Shops and Establishments Act (S&E Act) in the year 2016. The Maharashtra Government was the first to implement the amended S&E Act in the year 2017. The amended Act has many significant provisions, added in the interest of both the employer and the employee.  A brief is as follows:

Registration: Every establishment employing 10 or more workers shall apply for registration with appropriate documents. The Registration Certificate is valid for such period as requested by the applicant to the maximum of 10 years. Application of renewal must be applied online before 30 days of expiry. After expiry of 30 days, an additional fee of 50% is levied for such renewal.

Employer of every establishment employing fewer than 10 workers shall give an intimation of having commenced the business by submitting an online application. If, at any point of time, the number of workers engaged in the establishment becomes 10 or more, an application for Registration Certificate must be submitted. During this process, every time there is an increase in head count, it is the duty of the employer to inform the head count.

Closure: The employer shall notify within 30 days from the date of closing of the business that the establishment has been closed for business in such form and manner, as may be prescribed.

“Managerial Functions” means all such functions which are inherently supervisory in nature and are bestowed with powers and authority to take all policy and administrative decision in an organisation, e.g. power to sanction leave, award increment, take disciplinary action, to terminate, suspend or dismiss a worker or indulge in policy making decision regarding any aspect of the business or service, conditions of workers and such other similar powers.

Intimation of persons doing confidential work: Every employer shall inform in Form ‘U’ the names of such persons who are occupying position of confidential character in an establishment. However, the number of such persons shall not be more than 1% of the total strength of workers of the establishment, subject to a maximum of fifty persons. The information in Form “U” shall be submitted annually and whenever there is any change during the year.

Working Hours: No adult worker shall be required or allowed to work in any establishment for more than nine hours in any day and forty-eight hours in any week. No adult worker shall be asked to work continuously for more than five hours unless he has been given a break of not less than half an hour. An establishment may be kept open for business on all days in a week subject to the condition that every worker shall be allowed weekly holiday of at least 24 consecutive hours of rest.

Working hours or weekly holiday may be relaxed in case of work of urgent nature with the previous permission of the Facilitator. The spread-over of a worker in an establishment shall not exceed 10 and a half hours in any day, and in case a worker has been entrusted with intermittent nature of work or urgent work, the spread-over shall not exceed twelve hours.

Where a worker in any establishment is required to work beyond nine hours a day or forty-eight hours a week, he shall be entitled, in respect of the overtime work, wages at the rate of twice his ordinary rate of wages. The total number of overtime hours shall not exceed 125 hours in a period of three months. If a worker is denied weekly holiday, the compensatory leave in lieu thereof shall be given within two months of such weekly holiday. Where a worker is required to work on a day of his rest, he shall be entitled to wages at the rate of twice his ordinary rate of wages.

Engaging Women Employees: No woman worker shall be discriminated in the matter of recruitment, training, transfers, promotions or wages. No woman worker shall be required or allowed to work in any establishment except between the hours of 7:00 a.m. and 9:30 p.m. Provided that, the woman worker, with her consent, shall be allowed to work between 9:30 p.m. and 7:00 a.m. in any establishment in which adequate protection is provided of their dignity, honour and safety, protection from sexual harassment and their transportation from the establishment to the doorstep of their residence.

Part-time Employment: It shall be lawful for the employer to engage a part-time worker provided that he shall not be allowed to work for more than five hours in a day. No part-time worker shall be allowed to work overtime under any circumstances. Wages payable to a part-time worker shall be computed by dividing the per-day rate of Minimum Wages applicable to that schedule employment by eight (hours) with 15% rise in it or by dividing the prevailing rate of per-day wages fixed for permanent workers doing similar nature of work in that establishment by eight (hours) with 15% rise in it, whichever is higher.

Health, Safety and Welfare Committee: In every establishment where 100 or more workers are ordinarily employed, there shall be constituted a Health, Safety and Welfare Committee, consisting of equal number of employer and workers’ representatives. It shall include,-

  • Senior official who by his/her position in the organisation can contribute effectively to the function of the said Committee and he/she shall be the Chairman.
  • Representatives of heads of all the Departments or In-charge of Sections of the establishment, e.g. sales, purchase, material, personnel, marketing, finance etc., if any.
  • Maximum 10 worker representatives, nominated by the workers of the establishment, as members of the said Committee. The said Committee shall have sufficient number of representatives of women workers, wherever women workers are employed.

Leave: Every worker shall be entitled to eight days casual leave with wages in every calendar year, but shall lapse if un-availed at the end of the year. Every worker who has worked for a period of 240 days or more in an establishment during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of one day for every 20 days of work performed by him during the previous calendar year. Every worker shall be permitted to accumulate earned leave up to a maximum of 45 days.      

National & Festival Holidays: A worker shall be entitled to eight paid festival holidays in a calendar year, namely, 26th January, 1st May, 15th August and 2nd October and four such other festival holidays as may be agreed to between the employer and the workers as per the nature of business, before the commencement of the year.

Other Specific Provisions under the Act:

  1. In every establishment wherein 50 or more workers are employed, there shall be provided and maintained a suitable room or rooms as crèche for the use of children of such workers.
  2. The employer of an establishment shall furnish to every worker an identity card.
  3. Welfare amenities such as first aid, drinking water, urinals and latrines to be provided
  4. Canteen to be provided if 100 or more workers are engaged
  5. Statutory Records/registers to be maintained manually or electronically
  6. Annual return to be filed
  7. Name board should be primarily in Marathi. If any other language is used, Marathi should on the top and the font should be same as other scripts
  8. A separate registration should done for ware-house, store room, godown, if any.

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