The Shop and Establishment Act is applicable on all the commercial establishments; viz, business centers, offices, warehouses, stores, hotels, eateries, amusement parks, theatres, etc., nationwide. The Tamil Nadu Shop and Establishment Act is a state legislation governing the proper functioning and conduct of businesses, within the state of Tamil Nadu. It is one of the
most important regulations required to be complied with for any business. The Labor Department of the State is the department from which shop and establishment act registration is obtained.
APPLICABILITY:
The Shop and Establishment Act has been enacted by various State Governments to regulate the conditions of work of employees in shops, commercial undertakings, restaurants, etc. Thus the Act is designated to protect the rights of employees by defining uniform benefits to the employees; irrespective of the industry and type of establishment he / she is employed with. It has been designed to regulate the payment of wages, terms of service, holidays, leaves, work conditions, hours of work, overtime work, maternity leave and benefits, rules for employment of children. All commercial establishments must abide by The Weekly Holiday Act, 1942 enacted by the
Central Government which governs the grant of holidays. However, there is no specific Central Government Act which comprehensively governs hours of work, payment of wages, health and safety in commercial establishments. To bridge this gap, state Governments have enacted a Shop and Establishment Act. This is to help regulate the conduct of commercial establishments within their jurisdiction.
However, the Act does not cover the following persons or types of establishments and thus they will not come under the purview of the Tamil Nadu Shop and Establishment Act:
i. Persons employed in any establishment in a position of management.
ii. Persons whose work involves travelling and persons employed as canvassers and caretakers.
iii. Establishments under the Central and (State) Government, Local Authorities, the Reserve Bank of India, and Cantonment Authorities Establishments in mines and oil fields.
iv. The establishments in bazaars in places where fairs or festivals are held temporarily for a period not exceeding fifteen days at a time.
v. Establishments which, not being factories within the meaning of the Factories Act, 1948 are in respect of matters dealt within this Act, governed by a separate law for the time being in force in the (State).
Further, the regulations relating to opening and closing hours of shops, and grant of holidays will not apply to hospitals, institutions for the treatment or care of the sick, chemists or druggists’ shops as specified by time to time by the State Government.
MAJOR ASPECTS OF THE ACT:
As per the Tamil Nadu Shop and Establishment Act, no child can work in any establishment. Under this Act, a ‘child´ means a person who has not completed fourteen years. Further, no young person can work in any establishment before 6 a.m. and after 7 p.m. Further, a young person can only work for seven hours in any day and forty- two hours in any week. ‘Young person’ means a person who is not a child and has not completed seventeen years. Moreover, no person employed in any shop or commercial establishment shall be required to work for more than eight hours in any day and forty-eight hours in any week without overtime wages. Further, every person employed in any shop or commercial establishment should be allowed in each week a day holiday. It is to be further noted that health and safety is an essential and important aspect of the Act. The Act provides that the premises of the establishment or shop must be kept clean. It should be free from effluvia arising from any drain, privy or other nuisance. It should be cleaned at regular intervals. It also requires that such premises must be fully ventilated in order to prevent any suffocation and that every establishment must be sufficiently lighted during all working hours. All safety measures must be taken and specifically precautions must be taken against
fire. Any person employed in any shop or establishment shall be entitled, after twelve months of continuous service with the establishment, to holidays with wages for a period of 12 days in the subsequent period of twelve months. Employers are responsible for the payment of wages to persons employed. All employers are required to fix a period in respect of which wages shall be payable. The wage periods shall exceed one month.
REMEDIES AVAILABLE UNDER THE ACT:
The remedy under this Act lies three-fold, firstly there lies an appeal from any order of the
Inspector, secondly there exists compensation granted to the aggrieved person and thirdly,
imprisonment of the employer who has failed to comply with the regulations laid under this
Act. It is mandatory for all the establishment under the Act to obtain registration and follow
all the rules and regulations prescribed under the same. In case of any failure in obtaining
registration and following the rules and regulations of the Act, the establishment would be
liable to pay the penalty. The penalty amount would vary from state to state. The penalties
under the S&E act varied for states and are usually Monetary or Operational and in few cases
Imprisonment as well. While the monetary values are high, but the risk of closure notice always
hang under various noncompliance.
Under Chapter V of this Act, health and safety standards have been laid down and any person
under this chapter who is aggrieved of any order of the Inspector, an appeal lies to that extent
to any such authority who is competent and within such time as may be prescribed; and that
the decision of the appellate authority shall be final.
Chapter IX of the Act, specifically provides for the penalties to be applicable upon
contravention of any provision of the Act and that such penalty may also result in imprisonment
for a term which may extend to six months. Upon a contravention of by any employer covered
under this Act, they shall be punishable for a first offence, with fine which may extend to 25
rupees, and for a second or subsequent offence, with fine which may extend to Rs.250. With
regards to a contravention under Section 8 of this Act, the employer would be punishable with
fine which may extent to Rs.10 for a first-time offence and for any subsequent offence with
fine which may extend to Rs.100.
It is pertinent to note that any person employed and the employer prefers any proceeding
against such decision in a High Court or the Supreme Court, the employer shall be liable to pay
such person employed, during the period of pendency of such proceedings in the High Court
or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance
admissible to him as given under Section 41A of the Act. If an employer fails to comply with
the provisions of this Section, shall be punishable with imprisonment for a term which may
extend to six months, or with fine, or with both and where such failure is a continuing one, with
a further fine which may extend to two hundred rupees for every day during which such failure
continues after the conviction for the first and the court trying the offence.
The Act also prescribes penalty for obstructing an inspector and such person who wilfully
obstructs an Inspector in the exercise of any power conferred on him under this act or any
person lawfully assisting an Inspector in the exercise of such power, or who fails to comply
with any lawful direction made by an Inspector, shall be punishable with fine which may extend
to Rs.250 as laid under Section 46 of the Act. Section 46MA further provides for the
compounding of offences, punishable under section 45 or any rule made under section 49 and
the procedure to be followed for the compounding of such offences.
CONCLUSION:
The Act serves as an expedient to provide for the regulation of conditions of work in shops,
commercial establishments and for certain other purposes. It provides several benefits to person
who is registered by acting as a proof of legal entity, which in turn provides the ground for
opening a business bank account, it helps to smoothen the Inspection process whenever the
Inspector visits the premises and help to get benefit under various schemes of Central & State
Governments. Moreover, many State Governments have implemented a Voluntary Compliance
/ Self – Certification scheme to save employers from difficulties due to a plethora of labour
laws, registers, and returns. The employers are also to comply with the legal duties and obligations as specified under this Act and are subject to penalty either as fine or compensation upon such noncompliance.