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Shops and Establishment

Shops and Establishment is to provide for the regulation of conditions of work and employment in shops and commercial establishments. By this law it is intended to promote industrial peace and welfare of the employees. The Department of Labour in the state level is administering this law.

Shop means any premises where any trade or business is carried on or where services are rendered to customers and establishment will include commercial or trading or banking or insurance establishment in which person employed are mainly engaged in office work. All most all kinds of establishments will fall under the purview of this act.

Within 30 days from the date of commencement of work the employer of every establishment shall register under this act and in case of closure, the same has to be communicated to the authorities within 15 days from the closing of the establishment.

By this the department of Labour regulate the working hours, opening and closing hours, holidays, overtime work, young person and women, prohibiting the employment of children, leave such as annual leave, maternity leave, casual leave etc. rule relating to employment and termination, maintaining the registers and records, display of notices, obligation of employer and employee etc.

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The conditions of employment in an establishment and related regulatory compliance is governed by the Shops and Commercial Establishment Act. This is regulated by the state government in each state. By this Act,

Each shops and commercial establishment need to take registration with appropriate authority within 30 days from the date of commencement of the business. The employer need to submit an application with the appropriate authority along with the supporting documents and the fee. The Registration fee will vary depending on the number of employees in the establishment. The registration certificate need to be displayed in the business premises, and any change in respect of any information contained in his statement, within fifteen days after the change has taken place.

The act regulate the requirement of issuing appointment letter, working hours, opening and closing time rules for rest interval, closed days, national and religious holidays, overtime work, spread-over, leave policies, maternity leave, sick leave, casual leave, annual leave etc. employment of women and children in the establishment.

The child labour is not allowed in any kind of establishment. Anyone below the age of 14 is considered as child. No woman, or a young person (person aged between 14-18 years), shall be required or allowed to work whether as an employee or otherwise in any establishment during night.

What is a Shop?

Shop means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the Factories Act, 1948 is applicable.

What is an Establishment ?

A Commercial Establishment shall mean a commercial or trading or banking or insurance establishment, an establishment or administrative service in which person employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a café or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such establishments as the State government may by notification declare to be a commercial establishment for the purpose of this Act.

Who need to register under Shops and Establishment ?

The registration under the act need to be taken by all the establishments except the following:

  • Offices of or under the Central or State Governments or local authorities, except commercial undertakings;
  • any railway service, water transport service, postal, telegraph or telephone service, any system of public conservancy or sanitation or any industry, business or undertaking which supplies power, light or water to the public;
  • establishments for the treatment or care of the sick, infirm, or the mentally unfit;
  • establishments of the Food Corporation of India
  • offices of legal practitioners and medical practitioners in which not more than three persons are employed;
  • persons whose work is inherently intermittent such as drivers, care-takers, watch and ward staff, or canvassers; and Persons directly engaged in preparatory or complementary work, such as, clearing and forwarding clerks responsible for the despatch of goods.

When the registration to be taken by a shop or establishment?

The shop or establishment need to take registration within 30 days from the date of commencement of the establishment.

How to register an entity under Shops and Commercial Establishment.?

The employer need to file an application in specified from (FROM A) with the inspector having jurisdiction in the area with following information;

  • The name of the employer and the manager, if any;
  • The address of the establishment;
  • The name, if any, of the establishment;
  • Number of employees in the establishment and
  • Such other particulars as may be prescribed.

Shops and Establishment Registration Procedure.

Documents required

  • Photograph of the Authorised Person or Owner
  • Address proof for the establishment or shop - rent or lease agreement
  • Identity Proof of the authorised signatory (PAN card or Driving license or Voter Card etc.)
  • Statutory Documents (Partnership deed or incorporation Certificate or Memorandum & Article)
  • Authorisation letter or Resolution for Authorised signatory or self-attestation Letter for Owner

  • The application need to be filled (in most states it is online application now) with the relevant information and submitted along with payment challan. The documents need to be scanned and attached to the application. After verification of the application, if all the requirements of the act is complied, the inspector will issue registration certificate.

    What all are the compliance under the Shops and Establishment Act?

    • Issue appointment Letter to employee
    • Maintain muster roll-cum-register of wages in prescribed format
    • Maintain Leave Register in the prescribed format Maintain visit book
    • File annual return

    What all are the restriction of employment of children and women?

    • No child shall be required or allowed to work in any establishment.
    • No woman, or a young person (person aged between 14-18 years), shall be required or allowed to work whether as an employee or otherwise in any establishment during night.
    Employer seeking to engage women employees during night shift shall make an application to the appropriate authority (commissioner of labour or the deputy labour commissioner) and obtain exemption for same.

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