Centre clears Model Shops and Establishment Bill

30 Jun 2016 | By Ramya
Model Shops and Establishment Act

The Centre cleared the Model Shops and Establishment bill proposing that shops, banks, malls, cinema houses, restaurants, banks or any such workplaces be run round-the-clock.

Establishments could now employ women on night shifts provided that the workplace has mandatory cab services, adequate security, and good working conditions.

Establishments with over ten employees, except manufacturing units, are free to operate 365 days with flexible timings.

In context: Model Shops and Establishment Act

IntroductionWhat is Shops and Establishment Act?

The Shops and Establishment Act is a state legislation act, which has been modified by each state according to its rules.

It provides statutory obligation, employee rights, employer rights in the unauthorized employment sector, i.e., shops and establishments.

It applies to all employees of an institution and gives rules for daily and weekly working hours, employment of children/youngsters/women, holiday/overtime work, and regulations for leave/termination.

Jan 2016Centre proposes to bring a model law

The Centre was keen to bring a model law to provide greater flexibility to retailers, while trade unions opposed this move.

The Labour Ministry held discussions on the Model Shops and Establishments Bill, 2015.

Later, a new law allowing restaurants, banks, cinema houses, and other workplaces to be open 24x7 was framed.

However, the law wouldn't apply to the RBI and government offices.

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30 Jun 2016Centre clears Model Shops and Establishment Bill

Objective of the law is to bring in uniformity

The Centre received several suggestions to enact the law, which could be enforced by states either by adopting the central law or modifying it according to the state law. The law is designed to bring uniformity in legislative provisions and working conditions across India.
No Parliament approval required

Covered EstablishmentsNo Parliament approval required

The Bill that has been cleared by the Cabinet wouldn't require approval from the Parliament.

Except factories, the law covers shops/workplaces related to banking, printing, insurance, stocks, shares, brokerage, cinema, theaters, or any other public amusement that aren't currently covered under Factories Act, 1948.

It is expected to generate more employment as establishments are free to operate for longer hours and require more manpower.

Modifications, ExemptionsHighly-skilled workers exempted

In accordance with the proposal suggested by Labour Ministry, states can adopt the law with a provision to make required modifications.

Highly-skilled workers like those in biotechnology and IT are exempted under the law from daily (9 hours) and weekly working hours (48 hours).

Despite opposition from trade unions, the Centre kept warehouses under the scope of the Act after several discussions with stakeholders.

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RetailersRetailers welcome Centre's move

Retailers welcomed the Centre's decision as it would create more jobs and be convenient for the customers.

Kumar Rajagopalan, CEO-Retailers Association of India, said it is a win-win for all, including consumers, businesses, and government.

Confederation of All India Traders, concerned about increasing costs and security threat, suggested that states should run a pilot project in any market in a city for impact assessment.

Beneficial for businesses, consumers and the government

Kumar Rajagopalan stated: "Some states like Maharashtra and Andhra Pradesh have already adopted retail policy. This will benefit not just businesses but also consumers and government in the form of taxes and higher employment. Retailers will experiment for sure."

30 Jun 2016Level playing field for offline and online retail brands

Govind Shrikhande, Managing Director and Customer Care Associate-Shoppers Stop, stated the Centre's decision would help in opening a new level of retail and end the 'permission raj'.

Abhishek Bansal, Executive Director-Pacific Mall India, stated the decision would enable level playing field for brands in offline and online retail platforms.

Rahul Shinde, Managing Director-KFC India, stated the move would definitely boost the industry and economy.