The Union Cabinet has cleared a model law that allows all shops and establishments, not covered under the Factories Act, such as malls, cinema halls or an information technology firm to be open 24X7 and to work 365 days in a year. Called ‘The Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016’, it is a bold step towards employment generation. The law will not apply for government offices and the Reserve Bank of India.
The bill will bring about uniformity in the legislative provisions making it easier for all the states to adopt it and thereby ensuring uniform working conditions across the country. It will facilitate the ease of doing business and generate employment opportunity. Now the states have to adopt the bill fully or with certain modifications to suit their own needs.
This bill will not be enacted by Parliament but by the states. The first impression of this act is the government’s commitment towards ease of doing business.
Cover only establishments employing ten or more workers except manufacturing units.
Bill provides for freedom to operate 365 days in a year and opening/closing time of establishment.
Women to be permitted during night shift, if the provision of shelter, rest room ladies toilet, adequate protection of their dignity and transportation etc. exists.
No discrimination against women in the matter of recruitment, training, transfer or promotions.
Online one common Registration through a simplified procedure.
Powers of Government to make rules regarding adequate measures to be taken by the employer for the safety and health of workers.
Clean and safe drinking water.
Lavatory, crèche, first aid and canteen by group of establishments, in case, it is not possible due to constraint in space or otherwise by individual establishment.
Five paid festival holidays in addition to national holidays etc.
Exemption of highly skilled workers (for example workers employed in IT, Biotechnology and R&D division) from daily working hours of 9 hours and weekly working hours of 48 hours subject to maximum 125 over-time hours in a quarter.
From business point of view, there were unnecessary restrictions like particular shop or market must open at a particular time and must close at a particular time or must remain closed on a particular day. So, it was a restriction which was certainly not in favour of the business.
From the point of view of real estate, if it is allowed to work 24*7, it can be used three times over in a day. Which means, the cost of running the business or turnover can increase three times, the same property can be utilised for three businesses or same business 24*7.
From a consumer point of view, when working family members return home at night, the markets are closed by then. So, this is the customer which the shopkeeper is losing and the customer is not getting the shop. Hence, it is essentially postponed to the weekend. Either there is lot of crowd in market or there is no market open on a weekend. Therefore, such a provision for 24*7 markets is very essential.
From environmental point of view, it is a breather. The roads are choked during peak hours of day (8-11 am and 6-9pm). If there are flexible working hours, the traffic on the roads will be equally distributed along the day. This will enable smooth flow of traffic reducing air pollution and noise pollution.
From the bank point of view, for a businessmen the bank is available during day time. But for office goers, the banks may be operating within their working hours only. In such situation, a bank available after the working hours will be a win-win for both parties.
The Confederation of All India Traders have cautioned that it may result in law and order kind of problem and expose trading community to various kinds of threats. This is a valid and credible opinion as when the business is run in the night or 24*7, there are lot more security issues which is responsibility of the establishment or shop and state. This issue has to be addressed and that is why central government has only made a model law and left the detailing to state.
There could be areas in such a diverse country where 24 hours working is not possible. The span of law and order machinery may not be available for continuous long working hours. The state could make it applicable to certain areas where law and order problem can be handled or not to certain areas or make it partially applicable and thus it will be dependent on the situation on the ground.
Employment opportunities and security of women
More employment opportunities for women will be generated. The model law says that women cannot be discriminated against and they have to be allowed to work during night shifts. It clearly states that no discrimination against women shall be done in the matter of recruitment, training, transfer or promotion, and they have to be permitted during night shifts. The only conditions are that there have to be provision of shelter, restroom, ladies toilet, adequate protection of their dignity and transportation etc. It also provides for crèches which makes establishment more attractive to women. So, these are the requirements that the establishment has to offer to women.
Yet, the security of the women is a critical issue which needs to be addressed. Safety and security of women will increase their confidence in seeking employment for any time of the day.
Why such Bill?
Ease of doing business: Facilitate easy business establishment procedure and operations
Employability: Due to enhanced working hours, more job opportunities would be created.
Uniformity: One of the reason of such bill is that every state has varied norms, rules and regulations for shops and various business establishments. The government wanted to have some kind of uniformity so that businesses can grow much faster.
E-governance: There were various arbitrary rules allowing inspectors to check any shop or establishment at any point of time. The registration and renewal process of business was very cumbersome. Now everything is made online which will offer much easier approach options to the business establishment.
The problem is the implementation of such laws. It is the states which have to bring in similar laws based on model law with certain changes or similar as passed by Union Cabinet. Ever since globalisation in early 1990s, the ease of doing business is a greater concern and this is aimed at offering better environment to business community. But if the states don’t follow the suite or go ahead with this kind of law and are not on the same side with the model law, remarkable changes possible in business environment will suffer.
The state government has the authority over the subject as it is a part of State List. Even if there is disagreement between center and state government, the center is in no position to force the state government to implement it. Thus, it is the state government which is in best position to assess the suitability of the law and implement the values of cooperative federalism.
All the assets, the road, electricity, real estate and other public services will be equitably distributed. The allegation remains that this is done to facilitate the bigger businesses. The act says that it is applicable to establishment with 10 or more workers and thus, it is to primarily help out bigger businesses and chains which run malls and stores. However, it will be applicable to smaller businesses also (MSMEs also). Before bringing the bill, government had deliberations and discussions with public through internet and with employees/labour representatives, employers’ associations/federations and State Governments through tripartite consultative process. Hence, there were detailed and wide range of consultations carried out by the government to finalise the bill.
The Model Bill is a suggestive piece of legislation and has been finalized keeping in view the spirit of co-operative federalism. This gives liberty to States for fine tuning the Model bill to suit their requirements. This is expected to generate competitive and challenging spirit amongst the States and create an environment which is conducive for large scale employment generation at every level, especially in smaller and medium towns.