Short Note on Shop Commercial & Establishment Act – Delhi

Delhi Shop and Establishment Act

Applicability: All shops, establishments and commercial establishments in Delhi.

The provisions of the Employee’s Compensation Act shall as and when applicable apply to this act.

This act regulates areas like working hours, overtime, leave policy, rest interval, Opening and closing hours, closed days, national and religious holidays, Time and conditions of payment of wages, deductions from wages, maintain various Registers etc.

Registration: Each owner, within 90 days from starting the business shall submit application form in form ‘A’ to register the establishment.

Establishments exempted under the Act:-

a) A Factory registered Under The Factories Act

b) Places of Public Amusements or Entertainment such as theatres, cinemas, restaurants, eating houses, residential hotels, clubs.

c) Establishments of doctors and medical practitioners.

d) Establishments of legal practitioners

However, there are certain establishments which are partially exempted under the Act.

Compliances:

a) Registration under the Act in Form A within 90 days from starting of business.

b) Mandatory registers to be maintained such as Holiday list.

Leave Policy:

Employees who have completed 4 months of continuous employment shall be entitled to 5 days of Privilege Leave (PL). Employee has completed 1 month of continuous employment, he must be entitled to 1 day of Sickness or Casual Leave.

a) Privilege Leave (PL) – Not less than 15 days

b) Sickness or Casual Leave:- Not less than 12 days

The Privilege Leaves must be carried forward in the following year, but the leaves must not exceed more than 45 days.

If the person is a caretaker or a watchman then Privilege Leave (PL) will be for 30 days or more.

Employer must to furnish letters of appointment to employees after appointment.

Time and Conditions of payment of wages:

Before the expiry of the 7th day of the last day of the wage period in respect of which the wages are payable.

Over-Time:-

For any work in excess of 9 hours on any day or for more than 48 hours in any week, overtime wages are to be paid at the rate of double the wages.

Restriction on Double/Dual Employment:-

No person shall work two or more establishments or and a factory in excess of the period during which he may be lawfully employed under this Act.

Interval for Rest and Meals:-

No employee to work more than 5 hours in a continuity without a break for at least 30 minutes of rest or a meal. The total time worked per day, including rest and lunch breaks, shall not exceed 10 hours.

Employers are not allowed to hire children or individuals under the age of 14 including a child is a part of the family that owns the business.

No woman or young person under the age of 18 is permitted in any establishment between the hours of 9 PM to 7 AM during the summer and 8 PM and 8 AM during the winter. No young person shall be allowed to work for an establishment for more than 6 hours a day, whether or not from employer’s family. Must be provided a break of 30 minutes for every 3.5 hours for resting or taking meals.

Must have a sufficient arrangement for the employee access to drinking water.

Establishments must operate as per the timings prescribed by the Delhi government. However, the government can prescribe different opening and closing times for different classes of shops or commercial establishments.

Notice of Dismissal:-

No employer shall dispense who has been in continuous employment for not less than 3 months, without giving at least one months notice in writing or wages in lieu of such notice and employee given to his employer a notice, of at least one month, in writing.

Registers:-

a) Register of the Employment and Wages of the Employee as per Form G.

b) Opening and Closing hours of employment as per Form H.

c) Wages and record of Leave as per Form I.

d) Closed day, working day, working hours and intervals in Form K.

The records and registers must be preserved till the end of the following year.

Penalties:-

The proprietor, the employer or the manager as the case may be, shall on conviction be punished with fine which shall not be less than Rs.25/- and which may extend to Rs.250/-.

If any person contravenes the provisions of section 33, he shall be liable on conviction, to a fine of Rs.5 for every day on which the contravention occurs or continues.

Author – CA Gaurav Agrawal, Kishore Gupta & Co, Chartered Accountants in Practice from Central Delhi and can be contacted at gauravag.ca@gmail.com & Mobile Number 9711033545.