India: Maharashtra Welcomes A New Shops And Establishments Legislation

Last Updated: 13 November 2017
Article by Trilegal .

The Maharashtra government has published the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 to replace the existing shops and establishment legislation. This new law, which is yet to come into force, introduces provisions on crèche facilities, casual leave and electronic records and registers.


The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (New Act) was published in the Maharashtra Official Gazette on 7 September 2017. The New Act has received the Governor's assent and will come into force on such date as notified by the State government. Once in force, the New Act will replace the 60-year old Maharashtra Shops and Establishments Act, 1948 (1948 Act).

The State government has reformed the existing law to align it with the Centre's initiatives on 'ease of doing business' and digitization. The New Act largely draws its provisions from the Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016 (Model Bill), which was approved by the Union Cabinet in 2016. Though not a binding requirement, State governments were expected to either adopt the Model Bill, or adapt their existing laws to it, after accounting for regional requirements. Maharashtra is the first State to modify its shops and establishments legislation based on the Model Bill.


Applicability of the New Act

1. Substantive provisions would not apply to small establishments

Substantive provisions around working hours, leave, holidays, opening and closing hours, etc., would not apply to small establishments i.e. establishments employing less than 10 workers. Such establishments would only need to send an intimation regarding the commencement of their business to the authority designated under the New Act, allowing for greater flexibility in their operations.

2. The New Act would be applicable to all establishments in Maharashtra

While the applicability of the 1948 Act is limited only to local areas specified in Schedule I of that Act, the New Act would apply to all establishments in Maharashtra.

3. Applicability of the New Act would be limited to 'worker'

The 1948 Act extends to every 'employee'. Under the New Act, the term 'employee' has been replaced with the term 'worker' and the definition has also changed significantly. 'Worker' under the New Act has been defined on the same lines as the term 'workman' under the Industrial Disputes Act, 1947 (ID Act). Persons in 'positions of confidential, managerial or supervisory character' would not be included within the definition of 'workers', and employers would be required to list out such individuals on their website or other conspicuous place in their establishment. Employers would also have to send a list of such persons to the specified authority. Further, while the 1948 Act applies even to individuals 'employed through an agency' (i.e. contract workers), the New Act would be limited to workers directly 'employed' by the establishment.

Increase in the number of days of leave and holidays

While the New Act would decrease the entitlement to annual leave, it will increase the accumulation limit to 45 days (from the current 42 days). The New Act has also introduced provisions on casual leave that are missing from the 1948 Act. The number of national and festival holidays would also be doubled from 4 to 8 days.

Increase in the overtime limit

Under the New Act, a worker would be able to work overtime for a maximum of 125 hours in a period of 3 months. This is a significant increase from the 1948 Act, under which employees can work overtime for a maximum of 3 hours per week, i.e., about 36 to 40 hours in a period of 3 months.

Obligation to provide crèche facilities

Under the New Act, crèche facilities with suitable rooms would have to be provided in every establishment with 50 or more workers. An option has been given to a group of establishments to provide common crèche facilities within a radius of 1 km, with the approval of the designated authority.

Certain exemptions that are given to IT/ITeS establishments under the 1948 Act will be extended to all establishments

All establishments would be able to remain open on all 7 days of the week so long as every worker is given a weekly holiday. Further, all establishments will be able to employ women in night-shifts if suitable measures for their protection and transportation are taken.

Compliance moved to electronic mode

In line with the Centre's initiatives on 'ease of doing business', the New Act provides for registration and maintenance of registers/records electronically. Inspections will also be done based on a randomized web-generated inspection schedule and will not be at the discretion of the labour authorities.

Significant increase in fines

While the maximum penalty under the 1948 Act is a fine of INR 15,000 (USD 230), fines under the New Act can go up to INR 5,00,000 (USD 7,700). The New Act also provides for imprisonment in certain cases. However, opportunity would be given to employers to compound a first-time offense.


Displaying a list of employees in managerial and supervisory role will be a challenge for most organisations

Based on judicial precedents under the ID Act, an assessment of whether an employee is engaged in a confidential, supervisory or managerial role can be quite complex and would depend on the specific roles and responsibilities of an employee. Further, change in job roles and the consequent reclassification of an employee would require such a list to be updated regularly. If the employer fails to display or regularly update the list, persons employed in managerial or supervisory roles could possibly be covered by the provisions of the New Act.

It is also not clear if the requirement is to list the names of persons employed in such capacities or to merely notify the designations/positions of confidential, managerial or supervisory character.

Provision on accrual of annual leave could pose HR challenges

The provisions of the New Act relating to privilege leave are drafted in a manner that a worker would be entitled to 30 days of leave in the first year of employment and 18 days of leave in the subsequent years. Complying with such a provision could pose challenges from a Human Resources (HR) perspective since employers would have to carefully track the joining date of each worker, and accordingly provide leave entitlements. Further, it may also be difficult for employers to communicate to employees that their leave entitlement would reduce in subsequent years. This could lead to a situation where employers extend 30 days of privilege leave to all workers in order to avoid such HR issues.

Provisions regarding weekly holiday could be misused

Under the 1948 Act, every employee is entitled to a weekly day off, with the employer being prohibited from having an employee work during such weekly holiday. Although the New Act also mandates that workers are provided a weekly holiday, employers could have them work on their weekly holiday if a compensatory day off is provided within 2 months. Consequently, a worker may be required to work continuously for 2 months without any off day.

Onerous provisions on crèche

The recent amendments to the Maternity Benefit Act (MB Act Amendment) ( Refer to our previous newsletter) introduced the requirement to provide crèche facilities. Pursuant to the MB Act Amendment, the government is required to prescribe the distance within which crèche facilities are to be provided. The New Act however makes it mandatory for crèche facilities to be inside the establishment, with the exception that if an approval has been obtained from the prescribed authority, a group of establishments can provide common crèche facilities within a radius of 1 km. This is therefore likely to be more onerous than the requirement under the MB Act.

No provision on termination of service

Unlike the 1948 Act, the New Act does not contain any provision around termination of service of an employee. This may be a deliberate omission, since the definition of 'worker' under the New Act is aligned with the definition of 'workman' under the ID Act, and the ID Act already contains elaborate provisions relating to retrenchment.

No provisions around applicability of other statutes

The 1948 Act extends the provisions of the Industrial Employment (Standing Orders) Act, 1946 (SO Act) and Employees' Compensation Act, 1923 to establishments and employees covered by the 1948 Act. Presently, commercial establishments with 50 or more employees are required to comply with the SO Act. However, the New Act does not contain similar provisions relating to the applicability of these statutes to the establishments covered by it, which may change the compliance landscape when the New Act comes into force.


Once the New Act comes into force, it will provide establishments with greater flexibility in managing their compliances using electronic methods. However, some provisions such as, crèche, displaying list of persons and computation of leave may pose compliance challenges for employers. There would also be a greater onus on employers to ensure that compliances are up to the mark under the risk of significantly larger penalties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions