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24/7 operations of retail shops, restaurants; mixed response from trade


The Union cabinet chaired by prime minister Narendra Modi has approved the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016, which will allow round the clock operations of retail shops, mall, multiplexes, restaurants and other such establishments.

The Bill will now be sent to states and UTs to enable them to modify their individual Acts, if they so desire either by adopting the said Bill as it is or after modifying its provisions as per their requirements. This Bill was finalised after detailed deliberations and discussions with public through Internet and with employees/labour representatives, employers’ associations/federations and state governments through tripartite consultative process, informed the Union government in a statement.

According to the Union government, the Model Bill would bring about uniformity in the legislative provisions, making it easier for all the states to adopt it and thereby ensuring uniform working conditions across the country and facilitate the ease of doing business and generate employment opportunities.

Welcoming the step, Riyaaz Amlani, president, National Restaurant Association of India, stated, “This is extremely wonderful news and a victory for NRAI. We have been lobbying hard for the past many years for the freedom of operational timings in restaurants. We are delighted as this will go a long way in boosting the economy and employment in India. We are hopeful that the state and local authorities would cooperate and adopt this model.”

However there are concerns as well like those related to labour issues. According to a statement by Retailers Association of India (RAI), labour, being a concurrent subject, the state governments are required to adapt the model Act or required to carry out the changes in the existing Shops Acts.

Nevertheless, RAI welcomed the initiative undertaken by the Central government and commit to working with the state governments to ensure hassle-free adoption. Kumar Rajagopalan, CEO, RAI, said, “The move is likely to prove highly beneficial for restaurants, retailers, malls, movie theatres and other entertainment entities, will also help bring incremental tax income into the government’s kitty and generate employment. It’s a win-win situation for all the parties involved – companies, employees, government and consumers.”

The Model Act also allows women to work late hours, leading to increase in employment of women in retail in the country. The IT sector in India has benefitted, thanks to women being able to work in the industry without gender-based discrimination.

While he lauded the government for the initiative, he felt that this is merely one of the steps for facilitating ease of doing business as Shops and Establishments Act covers only certain aspects of retail. The need is to look at retail as a driver for the nation’s economy and address all aspects through a comprehensive national retail trade policy.

“Three states in the country have already done quite a bit on this front — Karnataka, Maharashtra and Andhra Pradesh have announced retail policies for their respective states that address aspects over and above labour laws such as skill development and development of retail and entertainment zones. However, the move from the Central government is a great step towards getting the state governments to start thinking retail, start thinking employment and start thinking customer efficiencies,” he concluded.

The following are the major differences from the earlier Acts, says RAI
1. The definition of shop is elaborated. As per new definition, “Warehouse or work house or work place for distribution of or packaging or repackaging or finished goods is carried on.”

This will help retailers who are using distribution centres (DC). Currently, in some places, retailers are compelled to take factory licence as the activity of cold storage and repacking comes under the definition of Factories Act.

2. Earlier, the maximum allowed overtime was 120 hours per year. It is now proposed to increase it to 120 hours per quarter (3 months) with increase in wages too.

3. Establishments that employ 30 or more women, have to provide a crèche. Group companies can together put a common crèche. This is borrowed from Factories Act.

4. Records can now be maintained in electronic form.

5. Web-based inspection is now allowed. AP and Telangana have already implemented this.

Meanwhile, the Confederation of All India Traders (CAIT), which is the largest body of traders in India involved in retail business while appreciating the move said that government by allowing round the clock working hours of the shops and other business establishments is bound to pose several threats to the trading community.

The CAIT has suggested that before implementing the decision by the states, a pilot project in any one bigger market of any city may be conducted for its impact assessment. The CAIT also said that a study must be done to understand the quantum of increase in footfall in markets if shops are open in the night viz-a-viz establishment expenses. It further said that perhaps the decision of the Supreme Court not allowing any activity beyond 11 pm in night might have escaped attention of the authorities which have prepared the law.

CAIT national president B C Bhartia and secretary-general Praveen Khandelwal in a joint statement released here said that the decision to allow business establishments to remain 24×7 would have far reaching consequences in terms of law & order, environment, health, social and family issues.

They said that even in the day working hours, the law & order situation is not so good. What will happen when shops & other business establishments will open throughout the night? Will the law enforcing agencies be able to provide enough security to markets? It is a well-known fact that both life & property is at stake especially if shops are open in night.

They further questioned the working hours and stated that asking labourers to do work for round the clock is another problem. The existing format of small businesses does not allow them to arrange different shifts of labourers and if it is so, it will bring more extra financial burden on the traders. They further said it may have adverse effect on health of people since round the clock working is against the basic fundamentals of health.

Facts about the Bill
• It will cover only establishments employing 10 or more workers except manufacturing units.

• The Bill provides for freedom to operate 365 days in a year and opening/closing time of establishment.

• Women to be permitted during night shift, if the provision of shelter, restroom ladies toilet, adequate protection of their dignity and transportation etc. exists.

• No discrimination against women in the matter of recruitment, training, transfer or promotions.

• Online one common registration through a simplified procedure.

• Powers of government to make rules regarding adequate measures to be taken by the employer for the safety and health of workers.

• Clean and safe drinking water.

• Lavatory, creche, first aid and canteen by group of establishments, in case, it is not possible due to constraint in space or otherwise by individual establishment.

• Five paid festival holidays in addition to national holidays etc.

• Exemption of highly skilled workers (for example workers employed in IT, biotechnology and R&D division) from daily working hours of 9 hours and weekly working hours of 48 hours subject to maximum 125 overtime hours in a quarter.

Source: FNB News