On analysing the definitions of establishment, commercial establishment and shop we see that the act virtually cover all types of business establishment and thus making it necessary for all business establishments in India to register under the Act. This is an important labour state level compliance requirement. The only case where one doesn’t need to register under the Act is when either the establishment is a factory when it will be covered under the Factories Act, 1948 or when it is exempted under the Section 3(1) of the act.
As per this section following establishmentsare covered by the Act: • A commercial or trading or banking or insurance establishment, or • An establishment or administrative service in which persons employed or mainly engaged in office work, or • A hotel, restaurant, boarding or eating house, a cafe or any other refreshment house or • A theater, cinema or any other place of public amusement or entertainment.
This act lays down the following rules: • Working hours per day and week. • Guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work. • Rules for employment of children, young persons and women. • Rules for annual leave, maternity leave, sickness and casual leave, etc. • Rules for employment and termination of service. • Maintenance of registers and records and display of notices. • Obligations of employers as well as employees.
Every business has to maintain the following recordsunder Shops and Establishments act: • Approval from Department of Labor. • Various registers giving details of employment,fines, deductions and advances, salary, holidays, etc.The names of the register may vary from state tostate, and hence, it is a prudent practice to requestthe exact nature of documents that your state mightneed from your municipal corporation.Files related to annual holidays, number ofemployees need to be submitted at the Office of theMunicipal Corporation annually.
Every shop/establishment is compulsorilyrequired to register itself under this Act within30 days of commencement of work.Registration Certificate:• The business owner should send to theInspector (Chief Inspector of Shops or otherInspectors under the Act) of the area concerned,an application form and fees detailing: o Name of the establishment, the employerand the manager, if any; o Postal address of the establishment; o Such other particulars as may be prescribed.
• The Inspector, on verifying the statement, shall register the establishment in the register of establishments and issue a registration certificate. This certificate has to be prominently displayed at the establishment and needs to be renewed before it expires. • If there is any change in the initial statement, the same has to be communicated within 15 days to the Inspector and he will make changes in the register of establishments and issue a fresh registration certificate.Closure of Business: And in case of closure, the same has to be communicated to the authorities within 15 days from the closing of the establishment. PS. The rules under this act vary as per the states.