Karnataka Shops and Establishment Act

The Karnataka Shops and Establishment Act regulates the operations of shops and commercial establishments. The Karnataka Shops and Establishment Act was introduced to regulate the hours of work, annual leave with wages, wages and compensation, employment of women and children and other aspects of a shops or commercial establishment. In this article, we review the Karnataka Shops and Establishment Act in detail.

Shops and Establishment Act

The Shops and Establishment Act has been enacted by various State Governments to regulate the conditions of work of employees in shops, commercial undertakings, restaurants, etc., All commercial establishments must abide by The Weekly Holiday Act, 1942 enacted by the Central Government which governs the grant of holidays. However, there is no specific Central Government Act which comprehensively governs hours of work, payment of wages, health and safety in commercial establishments. To bridge this gap, state Governments have enacted a Shops and Establishment Act to help regulate the conduct of commercial establishments within their jurisdiction.

Karnataka Shops and Commercial Establishment Act

The Karnataka Shops and Commercial Establishment Act extends to the whole state of Karnataka. All shops and commercial establishments except those exempted are required to comply with the Karnataka Shops and Commercial Establishment Act.
The Karnataka Shop and Establishment Act defines a shop as:
“”shop” means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop fall within the scope of the Factories Act, 1948.”
The Karnataka Shops and Establishment Act defines a commercial establishment as:
“”commercial establishment” means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafe or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such establishments as the State Government may by notification declared to be a commercial establishment for the purposes of this Act;”
Establishment Exempted from Karnataka Shops and Establishment Act
The Karnataka Shops and Establishment Act does not apply for the following types of establishments:

1. Offices of or under the Central or State Governments or Local Authorities, except commercial undertakings;
2. Any railway service, water transport service, postal, telegraph or telephone service, any system of public conservancy or sanitation or any industry, business or undertaking which supplies power, light or water to the public;
3. Railway dining cars;
4. Establishments for the treatment or care of the sick, infirm, or the mentally unfit;
5. Establishments of the Food Corporate of India;
6. Offices of legal practitioners and medical practitioners in which not more than three persons are employed;
7. Offices of a banking company;
8. Any person employed in any business from point 1 – 7 above;
9. Persons occupying positions of management in any establishment;
10. Persons whose work is inherently intermittent such as drivers, care-takers, watch and ward staff, or canvassers;
11. Persons directly engaged in preparatory or complementary work, such as, clearing and forwarding clerks responsible for the despatch of goods.

Further, sections relating to opening and closing hours, and weekly holidays in the Karnataka Shops and Establishment Act does not apply to:

1. Shops dealing mainly in medicines or medical or surgical requisites or appliances;
2. Clubs, residential hotels, boarding houses, hostels attached to schools or colleges, and establishments maintained in boarding schools in connection with the boarding and lodging of pupils and resident-masters;
3. Stalls and refreshment rooms at railway stations, bus stands, ports or aerodromes;
4. Shops of barbers and hairdressers;
5. Shops dealing mainly in meat, fish, poultry, eggs, dairy produce, bread, confectionery, sweets, chocolates, ice, ice-cream, cooked food, fruits, flowers, vegetables or green fodder;
6. Shops dealing in articles required for funerals, burials or cremations;
7. Shops dealing in pan, pan with beedies or cigarettes, or liquid refreshments sold retail for consumption on the premises;
8. Shops dealing in newspapers or periodicals, editing sections of newspaper offices and offices of news agencies;
9. Cinemas, theaters and other places of public entertainment and stalls and refreshment rooms attached to such cinemas, theaters and places of public entertainment;
10. Establishments for the retail sale of petrol’
11. Shops in regimental institutes, garrison shops and troop canteens in cantonments;
12. Tanneries;
13. Retail trade carried on at an exhibition or show, if such retail trade is subsidiary or ancillary only to the main purpose of the exhibition or show;
14. Oil-mills and flour-mils not registered under the Factories Act, 1948;
15. Brick and lime kilns;
16. Commercial establishments engaged in the manufacture of bronze and brass utensils so far as it is confined to the process of melting in furnaces;
17. Information technology establishments;
18. Bio-technology and research centers or establishments of epidemic and other diseases;

Karnataka Shops and Establishment Act Registration

Karnataka Shops and Establishment Act registration is mandatory for all shops and commercial establishments in Karnataka, expect those exempted.
New shops or commercial establishments in Bangalore or Karnataka are required to apply for Karnataka Shops and Establishment Act Registration within 30 days of commencing operations. The Shops and Establishment Act Registration must be submitted in the prescribed format to the Labour Inspector of the area concerned. The following information must be provided as a part of the Shop and Establishment Act Registration application:

• The name of the employer and manager, if any
• The postal address of the establishment;
• The name, if any, of the establishment; and
• Such other particulars as may be prescribed.

On submission of the application, the Inspect would verify and provide the Shops and Establishment Act Registration. All Karnataka Shops and Establishment Act registrations are valid for a period of 5 years and can be renewed.

Highlights of Karnataka Shops and Establishment Act

The following are some of the major aspects of the Karnataka Shops and Establishment Act:

Employment of Child, Young Persons and Women

The Karnataka Shops and Establishment Act prohibits the employment of child at any establishment. A child is any person who has not completed fourteen years of age.
Also, young person and woman cannot be required or allowed to work whether as an employee or otherwise in any establishment during night. A young person is anyone who has completed the age of fourteen, but not eighteen.

Hours of Work

As per the Karnataka Shops and Establishment Act, employees can only work for nine hours on any day and forty-eight hours in any week. If the employee works more hours, then wages need to be provided for overtime. Further, the period of work of an employee in an establishment should be fixed so that, no period or work exceeds five hours without an interval.

Weekly Holiday

All establishments in Karnataka are required to remain close for one day of the week and every employee in an establishment must be given atleast one whole day in a week as a holiday for rest. However, if the establishment has sufficient additional staff, then it can remain open throughout the week.

Annual Leave with Wages

Employees working in an establishment in Karnataka should be allowed to avail a leave with wages at the rate of one day for every twenty days of work performed. In case, of young persons, the employee should be allowed to avail a leave with wages at the rate of one day for every fifteen day of work performed.
To start or manage a business in India, visit www.complianceindia.co.in.