Recently, the Haryana government realized it has a Shops and Establishments Act that it needs to urgently implement. So, it suddenly decided that Gurgaon’s thriving shopping malls, which are open all week, must be shut every Tuesday. The malls’ businesses were clearly unhappy with this decision — so, probably, were the mall rats!
Illustration: Jayachandran / Mint
Probably very few people outside the legal community are aware that most states in India have a specific law that prescribes rules for working conditions and benefits for employees working in shops, commercial establishments, hotels, restaurants, theatres and other places of public entertainment.
These Shops and Establishment statutes are intended to safeguard the interests of employees by ensuring that employers provide comfortable working conditions. They regulate, among other things, the working hours of employees, including opening and closing hours, the number of days the establishment should remain closed, and how much overtime work employees are allowed to do.
Every state has its own Shops and Establishments Act, so there is no uniformity in the statutory provisions covering the various states.
For example, the Bombay Shops and Establishments Act, 1948 (“Bombay Act”), is applicable to establishments of legal practitioners, architects, engineers, accountants, tax consultants and professional consultants while the Punjab Shops and Commercial Establishments Act, 1958 (“Punjab Act”), excludes offices of lawyers.
So, the branch office of a legal firm in Gurgaon would be exempt from the provisions of the Punjab Act (which is applicable to Haryana), but another branch office of the same firm in Mumbai will fall within the purview of the Bombay Act. It is hard to do business in this environment.
A booming Indian economy and globalization have led to a huge increase in the number of businesses in the country. This is especially true of the services sector. At call centres that operate all day, night and year, prescribing opening and closing hours is meaningless.
Today, even in consultancy and accountancy firms, and in BPOs, it has become the norm to work late hours as well as on holidays. As a result, establishments that support these businesses, such as restaurants, stationery shops and private transport operators, also stay open longer.
But, the Bombay Act, for instance, states that it is illegal for an employer to call an employee to work on a day when the office is closed or when the employee has a scheduled day off. The Bombay Act also prohibits employees from working more than nine hours a day and 48 hours a week. In addition, it says employees must rest every five hours for at least an hour.
It is common knowledge that these rules are never followed in any establishment. Besides, it is practically impossible to monitor compliance of such provisions.
Some of the shops and establishment rules require establishments to get their walls whitewashed once a year or once in two years, and to maintain a register in a prescribed format to record the dates on which lime washing or colour washing was carried out. Further, there are detailed provisions relating to cleanliness, proper ventilation and lighting, maintenance of first-aid boxes in shops and establishments.
In today’s era of ultra-modern designer offices in fashionable commercial complexes, such rules are likely to draw a laugh and serve only as an example of irrelevance.
Clearly, provisions of the various states’ decades-old Acts that relate to holidays, the number of days offices must remain shut and working hours can’t realistically be followed due to the exigencies of the new business environment. This is not to suggest that the work environment should be unregulated. There are certain provisions in the Acts, particularly those dealing with the employment of women and young people, safety, etc., which are absolutely essential.
What is needed, though, in today’s business environment is a balance between working conditions for employees and, based on business requirements, flexibility for employers. For instance, in Gurgaon, instead of forcing all malls to shut on Tuesdays, the Haryana government could have tried to enforce a law that states all employees get one day off a week and get paid for any extra hours put in.
There are some heartening signs that states are beginning to realize how unsuited these old Acts are in the new economic order. For example, in Karnataka, exemption has been granted to allow women to work at night, subject to employers observing certain conditions relating to their safety, security and transportation.
This was done keeping in mind the proliferation of call centres, which are open all day and night, in the state.
The Shops and Establishments Acts are well meaning, yes, but many of their provisions have lost relevance and become outdated over the decades. At the same time, some key provisions to protect employees — that still hold good after all these years — are not enforced, especially by shops and small businesses.
These Acts need to be made uniform across states. They need to be changed keeping in mind the new economic order and, most importantly, need to be enforced where most needed. Why not have one Central law applicable to all states? That could be one step in the right direction.
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This column is contributed by Chandni Dugal of AZB & Partners, Advocates & Solicitors.