The Government of Gujarat to incentivize Work Culture

NEW SHOPS AND ESTABLISHMENT ACT FOR GUJARAT- INCENTIVISING WORK CULTURE

The Government of Gujarat (“Government”) has come out with Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019 hereinafter referred to as “2019 Act” which is effective from May 1, 2019. With this development, the Gujarat Shops, and Establishment Act, 1948 hereinafter referred to as “1948 Act” stands repealed. The 2019 Act extends to the whole of the state of Gujarat. Key Highlights of 2019 Act:

• Applicability: The 2019 Act is applicable to establishments employing 10 or more workers. Accordingly, the establishments employing less than 10 workers will be out of the purview of the 2019 Act although such establishments will be required to file intimation with the concerned authority regarding the commencement of business in the form and manner prescribed therein. However, the 1948 Act was applicable to all establishments unless exempted irrespective of the number of workers engaged by it.

• Employer: Under the 1948 Act, an employer means a person owning or having ultimate control over the affairs of an establishment. Under the 2019 Act, the definition has been broadened and the amended definition now expressly includes (i) partner or members in case of firm or association of individuals, (ii) director in case of the company, and (iii) designated persons in case of the Government-owned or controlled entities.

• Registration: Under the 2019 Act there is no requirement of periodical renewal of the certificate of registration. A registration certificate issued shall remain in force from the date of issue unless any change in ownership or nature of business takes place. Under the 1948 Act, periodical renewal of the certificate of registration was required to be done from time to time.

• Leaves & Holidays:

• Welfare Provision: The 2019 Act seeks to provide an impetus surrounding welfare provisions for the employee which include wholesome drinking water, and adequate provision for restrooms and first aid box. Further, the 2019 Act has introduced certain additional welfare measures to be taken by the employer including facility for creche (in case of 30 or more women employee) within a prescribed distance and canteen (in case of 100 or more employees). The 1948 Act had a very narrow approach concerning the welfare of the employees as there were only generic provisions for the employee’s welfare.
• Women Discrimination: Under the 1948 Act, there was no provision relating to discrimination against women employees. The 2019 Act outlines the underlying principle of the woman empowerment and strictly prohibits discrimination against women in matters of recruitment, training, transfers, and promotions. Further, the woman worker is allowed to work between 9 p.m. to 6 a.m. However, they may be allowed to do so subject to their prior consent and where the inspector concerned is satisfied that there exists adequate provision for the protection of her dignity, honor, and safety and all the basic amenities including the transportation facility.
• Penalties: Under the 1948 Act in the event of contravention of the provision of the act, the employer was punishable with a fine of INR 750 and in the event of continuous contravention INR 10 for every day of such violation. However, under the 2019 Act, if the contravention of the provisions of the act results in an accident causing serious bodily injury or death, the employer shall be punishable with imprisonment which may extend to 6 months or with fine which shall not be less than INR 25,000 which may extend up to INR 50,000.

MBC Comment This is a very significant move made by the Government and it will be a great sign of relief for employers employing less than 10 workers as such establishments will no longer require registration under the 2019 Act and will reduce their compliance burden. Further, with this change in the definition of the ‘employer’, more number of people in an establishment will now be deemed as employers for the purpose of onerous responsibility of compliance with the 2019 Act. This poses greater responsibilities on such persons to take adequate steps to comply with the legal requirements under law in order to avoid unwarranted consequences and litigation. It is expected that woman workforce will be strongly benefitted with this development and if it is effectively implemented it will help employers to retain and encourage its woman workforce to contribute to the growth of the organization. It may be noted that the penalties have also been increased to ensure the compliance of the enactment and limiting any sort of deviation by the employers.   Last Updated: 3rd July 2019 This article is contributed by:  Vineet Verma Senior Associate, Legal

Tag: Employer-Employee Law, Government of Gujarat, Work Culture