MAHARASHTRA SHOPS AND ESTABLISHMENTS (REGULATION

OF EMPLOYMENT ANDCONDITIONS OF SERVICE) ACT, 2017.

The Act indulges the provisions regarding the establishments and shops in the extend of the
stat, their registration and its procedure and the working hours and the rightly owned leaves,
non-working days and restrictions on the work-hour count and wages relating to overtime.

The application and enforcement:

The said Act is enforceable to the extend of the whole state of Maharashtra.
All the provisions of this Act are to be applied on the establishments employing ten or more
employers, similarly the establishment employing less than ten workers to apply specifically
Section 7.
The enforcement of the said Act is s dated through the Official Gazette, 7th September 2017.

The authorities:

The two main authoritative bodies that regulate and furnish control over this Act are:

The stat government – to make or change any additional provisions through the official
gazette

The chief facilitator- has the powers and functions to look up with the legality and well-
functioning of the establishments.

Applicability:

The employer as according to section 2(3) is a person who owns or as ultimate control over
the affairs of an establishment. The definition is an inclusive list with which widens the scope
of the term employer for the scope of the Act. It includes:

i. in the case of a firm or association of individuals, a partner or members of the firm or

association;
ii. in the case of a company, a director of the company;
iii. in the case of an establishment owned or controlled by the Central Government or a
State Government or any local authority, the person or persons appointed to manage
 the affairs of such establishment by the Central Government or the State Government
or the local authority, as the case may be;

the term establishment has been defined in the section 2(4) of the Act as,

i. Any business, trade, manufacture or

ii. any journalistic, or printing work,
iii. business of banking, insurance , stocks and shares, brokerage or produce exchange,
iv. profession or any work in connection with, or incidental or ancillary to,
v. medical practitioner (including hospital, dispensary, clinic, polyclinic, maternity home
and such others), architect, engineer, accountant, tax consultant or any other technical or
professional consultant;
vi. also includes a society registered under the Societies Registration Act, 1860,
vii. a charitable or other trust, whether registered or not, which carries on, whether for
purposes of gain or not,
viii. any business, trade or profession or work in connection with or incidental or ancillary
thereto; and includes shop, residential hotel, restaurant, eating house,
ix. theatre or other place of public amusement or entertainment;
x. to whom the provisions of the Factories Act, 1948 does not apply
xi. and includes such other establishment as the State Government may, by notification in the
Official Gazette, declare to be an establishment

the term worker under Section 2 (26) applies to any person who is employed to do any
manula, unskilled, skilled, technical, operational, or clerical work for hire or reward,
irrespective of the terms of employments be expressed or implied.

The limits of its applicability is to:

i. Establishments of the Central and State Government;

ii. Establishments of Local Authorities;
iii. Establishment of Mumbai Port Trust;
iv. Establishment of Railway Administration;
v. Offices of Reserve Bank of India;
 vi. Offices of the Trade Commissioner and of Consular officers and other Diplomatic
representatives of Foreign Government;
vii. Offices of Air Service Companies;
viii. Establishments used for treatment or care of infirm, destitute or mentally unfit;
ix. Establishments pertaining to any kind of educational activities (excepting those where
coaching or tuition classes are conducted by individual persons or any institutions other than
those,—

(a) affiliated to any university established by law, or (b) recognised by the Divisional Boards under the
Maharashtra Secondary and Higher Secondary Education Boards Act, 1965, or

(c) recognised by the Directorate of Education or the Directorate of Technical Education as a private
secondary or technical high school, Industrial Training Institute (I.T.I.), Polytechnic, Engineering
Colleges or other technical institutions conducting courses recognised by Government) ;

x. High Court Law Libraries and other Courts Law Libraries;

xi. A worker occupying position of confidential, managerial or supervisory character in an

establishment, a list of which shall be displayed on the website of establishments and in absence of
the website at a conspicuous place in the establishment and a copy thereof shall be sent to the
Facilitator;

xii. A worker whose work is inherently intermittent;

xiii. A member of the family of an employer.

The procedure of registration:

The establishments that are established after the enforcement of this Act, shall within 60 days
apply for the application online with ten or more workers through the prescrided form to the
Facilitator of the local area concerned, together with such fees and such self-declaration and
self-certified documents as may be prescribed, containing—

(a) the name of the employer and the manager, if any;

(b) the postal address of the establishment;

(c) the name, if any, of the establishment;

(d) the actual nature of the business of the establishment ; and

(e) such other particulars as may be prescribed :

Provided that, nothing contained hereinabove shall apply to the establishments already having
valid registration or renewal under the Maharashtra Shops and Establishments Act until
expiry of their registration or renewal.

After the said application, along with the documents and the fees online, the facilitator shall ,
register the establishment along with the labour identification number to the employerwithin
the prescribed limit. He shall verify the documents and produce the certificate whenever it is
demanded. Such a certificate shall be valid until the limit prescribed by the employer, but not
exceeding ten years. An application for renweal shall be submitted prior to thrity days of such
expiry.

If the application for the renewal of a registration certificate is submitted after the expiry of
the period specified in sub-section (3) but within thirty days after the date of expiry of the
registration certificate or of the renewed registration certificate, as the case may be, such
application shall be accompanied by an additional fee as late fee equal to half of the fee
payable for the renewal of a registration certificate.

Within a period of sixty days from the date of the commencement of this Act or the date on
which establishment commences its business, the employer of every establishment employing
less than ten workers shall give an intimation of having commenced the business to the
Facilitator in whose jurisdiction the establishment is located by submitting online application,
in a prescribed form, together with such self-declaration and self-certified documents, as may
be prescribed containing details such as name of the employer and manager, name of
establishment, nature of business, number of workers and such other details as may be
prescribed. The Facilitator shall issue to the employer of such establishment a receipt of
intimation in such form and manner as may be prescribed.

If it is found that the registration said obtained by misrepresentation, or suppression of

material facts, or by submitting false case or forged documents, or fraud then such
registration shall be revoked after giving an opportunity of being heard, to the employer of
the establishment, cancel the registration and remove such establishment from the register of
establishments in the manner prescribed.
The employer shall notify to the Facilitator within thirty days from the date of closing of the
business that the establishment has been closed for business in such form and manner, as may
be prescribed. The Facilitator on receiving the information and on being satisfied about its
correctness shall remove such establishment from the register of establishments and cancel
the registration certificate

the State Government may, fix, by notification in the Official Gazette, in the public interest,
such hours for opening and closing of different classes of establishments and for different
premises, shopping complex or mall or for different area or areas and for different period.

The Act provides for various ceilings for the maximum hours of work one shall do:

1. An adult shall not work for more than 9 hours a day and 48 hours a week.
2. An adult shall not be asked to work continuously for a day of more than 5 hours
unless he has taken an hour of rest.
3. A women is not to be required to work after 9:30 pm till 7:00 am until, such a women
has consented for the same in accordance with her safety, dignity and honour.
4. The state government may regulate the employment of women workers after 9-30
p.m. and before 7-00 a.m. in such shops, establishments, hotels, restaurants,
residential hotels, permit rooms, bars, spa-massage parlours, lodges or any business or
any trade or occupation in such area or areas as it may deem fit.
5. The spread over of a worker in the establishment to not exceed ten and half hours in a
day. ( the worker shall not work for more than 9 hours a day, not work more than 5
hour continuously and to have at least an hour break )
6. An adult worker who works for more than 9 hours a day and 48 hours a week, shall be
given wages twice his wage rate.
7. The total hours of the overtime shall not exceed 125 hours in the period of 3 months.

Holidays and leaves:

 1. An establishment may be kept open for business on all days in a week subject to the
condition that every worker shall be allowed weekly holiday of at least twenty-four
consecutive hours of rest.
2. If a worker is denied weekly holiday, the compensatory leave in lieu thereof shall be
given within two months of such weekly holiday.
3. The period and hours of work in a week for all classes of workers in such shift shall
be informed well in advance to all workers in writing and shall be sent to the
Facilitator electronically or otherwise.
4. No deductions to be made from the wages on account of any day on which it has been
a weekly holiday.
5. Where a worker is required to work on a day of his rest, he shall be entitled to wages
at the rate of twice his ordinary rate of wages.

Leave and payment of wages:

1. Every worker shall be allowed a weekly holiday with wages.

2. Worker is entitled to 8 days of casual leave with wages in a calendar year, which if not availed
then is said to be carry forwarded to the next calendar year of that respective worker.
3. Every worker who has worked for a period of two hundred and forty days or more in an
establishment during a calendar year shall be allowed during the subsequent calendar year,
leave with wages for a number of days calculated at the rate of one day for every twenty
days of work performed by him during the previous calendar year.
4. Where a worker has been employed for not less than three moths in a year, shall be
entitled to a leave with respect every 60 days of work, consecutive or otherwise for
not more than 5 days.
5. Every worker shall be permitted to accumulate earned leave upto a maximum of
forty-five days
6. Where the employer refuses to sanction the leave under sub-section (3) which is
due when applied fifteen days in advance, then the worker shall have a right to
encash leave in excess of forty-five days.
7. The worker is entitled to eight paid festival holidays in a calendar year.
8. Where any worker has worked 240 days in a calendar year,
(i) Days under lay-off, by agreement or by contract or under standing
orders,
 (ii) The women worker under her maternity leave
(iii) Leave earned in the year prior to that in which the leave is
availed,
(iv)The worker is absent due to the disablement temporary in nature
caused due to accident in course of employment.

shall be deemed to be days on which the worker has worked in any establishment
for the purpose of computation of the period of two hundred and forty days or more, but shall
not earn leave for these days.

Penalty :

any person contravenes the provisions of the said Act or the rules made, shall be punishable
with fine which may extend up to one lakh rupees in the case of a continuing contravention,
with an additional fine which may extend to two thousand rupees for every day during which
such contravention continue.

The penalty for contravention of the New Act and the rules have been enhanced to INR
100,000 and in case of continuing contravention an additional fine which may extend to INR
2000 for every day during which the contravention continues. Further, for repeat offenders,
the fine may extend to INR 2,00,000. The Existing Act provides for a minimum fine of INR
1,000 and a maximum fine of INR 5,000.

SANDWICH LEAVE POLICY:

In labour law parlance, sandwich leave refers to a day or two considered as off between two
leaves voluntarily taken by an employee. E.g., leave applied by an employee for Friday and
subsequent Monday, but the company counts both Saturday and Sunday as leave while
debiting the employee's leave balance.

Bharat Earth Movers vs Commissioner Of Income Tax, Karnataka on 9 August, 2000

The appellant company has two sets of employees. One set of employees is covered by
Employees State Insurance Scheme and is generally known as staff. The other set of
employees not so covered is known generally as officers. The company has floated beneficial
schemes for its employees for encashment of leave. The officers are entitled to earned leave
calculated at the rate of 2.5 days per month, i.e., 30 days per year. The staff (other than
officers) is entitled to vacation leave calculated at the rate of 1.5 days per month, i.e., 18 days
in a year. The earned leave can be accumulated upto 240 days maximum while the vacation
leave can be accumulated upto 126 days maximum. The earned leave/vacation leave can be
encashed subject to the ceiling on accumulation. The officers may at their option avail the
accumulated leave or in lieu of availing the leave apply for encashment whereupon they
would be paid salary for the period of leave earned but not availed. So does the scheme
extend facility of encashment to the staff in respect of vacation leave. Any leave earned
beyond the said ceiling limit of 240/126 days cannot be accumulated and goes a waste. It can
neither be availed nor encashed. The appellant company has created a fund by making a
provision for meeting its libility arising on account of the accumulated earned/vacation leave.
In the assessment year 1978-1979 an amount of Rs.62,25,483/- was set apart in a separate
account as provision for encashment of accrued leave. It was claimed as a deduction. In the
opinion of the Tribunal the assessee was entitled to such deduction. The High Court has
formed a different opinion and held that the provision for accrued leave salary was a
contingent liability and therefore was not a permissible deduction. The reasoning applied by
the High Court is that the liability will arise only if an employee may not go on leave and
instead apply for encashment. If the employee avails the leave as per his entitlement, then he
would be paid salary for the period of leave and liability for encashment would not arise. The
other event on the occurrence of which the employee may stake his claim is termination or
retirement which again is an uncertainty. Accordingly the High Court has answered the
question in the negative, that is, in favour of the Revenue and against the assessee. The
assessee has come up in appeal.