The present situation
At present, different states have different laws governing commercial establishments. However, shops are required to be closed on 1 day as per prevalent practices. Moreover, the laws do not allow malls, restaurants, shops, etc. to remain open 24 hours.
Why is the model law required?
- Laws lack uniformity. For instance, Bombay Shops and Establishments Act includes offices of lawyers while Punjab's Act does not.
- Moreover, many provisions in these laws are outdated. For instance, provisions such as yearly white washing of walls are irrelevant in the age of ultra-modern glass offices.
- Globalization has led to changes in office timings; hence, restaurants, shops, etc. also need to alter their timings.
Shops, banks, restaurants will soon function 24x7
- The Central government has drafted a new Model Shops and Establishments (Regulation of Employment and Conditions of Services) law which will enable shops, restaurants, cinemas, etc. to remain open 24x7.
- The draft has been presented to gather feedback from various ministeries and departments.
- Since, trade and commerce within a state is governed by state laws, the law will be an advisory to the states.
The important provisions
- The Act for the first time will cover godowns and warehouses, thus bringing warehouses of e-commerce companies under the ambit of these laws.
- Women will be allowed to work in night shifts and facilities such as cab services, crèches, toilets, etc will have to be provided.
- There can not be any discrimination "against women in the matter of recruitment, training, transfer or promotion".
Where will this not be applicable?
The model law will not be applicable to Reserve Bank of India (RBI) and government offices.
Effect of Act on service sector
- The Act will promote revenues of service sector as the establishments will see greater footfalls.
- It will provide a level playing field to online and offline retailers by ensuring that offline retailers can maximise their profits by remaining open 24x7.
- It will also bring in much needed uniformity in such laws, thereby ensuring greater ease of doing business.
Law receives resistance from labor unions
- Labor unions have resisted the move as it violates various domestic and international labor laws and thus affects labor welfare.
- They also attacked it by saying that the law benefits big multinational companies as they can afford to open their stores round the clock.
- They add that, small retailers will eventually lose out on business, leading to losses of jobs.