In a significant regulatory shift towards invigorating commercial activity and offering enhanced operational flexibility to businesses, the Government of Rajasthan has unveiled a regulatory exemption from the hitherto weekly closure mandate under the Shops and Establishments Act. This legislative recalibration, further to similar precedents in other Indian States, permits all registered shops and commercial establishments to operate seven days a week. However, the exemption is accompanied by specific conditions that employers must adhere to failing which the exemption will be rescinded.

Historically, the Rajasthan Shops and Commercial Establishments Act of 1958 enjoined all commercial entities to observe a compulsory weekly closure. Employers were required to declare this weekly respite at the commencement of each calendar year, with a provision allowing only one alteration every six months. The recent exemption brings an end to this statutory obligation, provided establishments adhere to the following four conditions:

1. Appointment Letters: Employers are obligated to issue appointment letters to all employees, formalizing their terms of employment and ensuring transparency.
2. Weekly Paid Holiday: Employers must grant employees a full day off per week as a paid holiday on a rotational basis. This measure ensures that despite continuous business operations, employees receive their entitled rest periods.
3. Standard Working Hours: The standard working hours are capped at nine hours per day and 48 hours per week, in consonance with the original Act. Any additional work beyond these hours necessitates maintaining separate records.
4. Overtime Compensation: Employees working overtime are entitled to remuneration at one and a half times their regular wage rate.

Failure to comply with these conditions will result in the nullification of exemption, and employers will be subject to penalties under the Act.

Exemptions in Other States

The reform in Rajasthan is emblematic of a broader trend amongst Indian States to modernize labour regulations and enhance business flexibility. A cursory glance at the regulatory landscape in other States reveals a concerted effort to balance such commercial exigencies with employee rights:

Telangana: The Telangana Shops and Establishments Act, 1988, extends conditional exemptions to Information Technology Enabled Services (ITES) and Information Technology (IT) establishments from the provisions relating to daily and weekly hours of work, working hours of women and young persons at night, opening and closing hours, as well as yearly holidays. These exemptions are valid till 30th May, 2028.

Few of the conditions are as follows:

1. Employees must not be required to work more than 48 hours a week. Overtime wages need to be paid for work beyond 48 hours.
2. Employees shall be granted a weekly day off.
3. Employees working on notified holidays must be given a compensatory day off with wages.

Gujarat: Under the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019 (Gujarat Shops and Establishment Act), exemptions are extended to ITES and IT establishments. These exemptions, valid until 5^th February, 2026, pertain to daily and weekly work hours and the distribution of work hours.[1]

Additionally, as per the Gujarat Shops and Establishment Act, any shop or establishment in the State may operate on all days of the week, provided that every worker is given a weekly holiday of at least 24 consecutive hours of rest. If a worker is denied a weekly holiday, they must be given a compensatory leave within two months of the missed weekly holiday.[2]

Andhra Pradesh: In Andhra Pradesh, similar conditional exemptions have been granted to all Shops in the state from the provisions relating to daily and weekly hours of work, working hours of women at night, as well as weekly holidays, under the Andhra Pradesh Shops and Establishments Act, 1988. These exemptions are valid until 1^st November 2027[3]

Few of the conditions are:

1. Employees must be given a compensatory, compulsory weekly holiday on a preferential basis without any deduction of benefits, monetary or otherwise.
2. Employees must not be required to work more than 8 hours a day and 48 hours a week.
3. Records of employees working beyond normal working hours must be maintained.
4. Additional wages must be paid to employees working beyond normal working hours at a rate which is twice the ordinary rate of wages.

Conclusion

The initiatives allowing shops and establishments to operate continuously throughout the week represent a significant step towards balancing business flexibility with employee welfare. Further, the mandate for an appointment letter to avail of this benefit seems to be in line with the new labour codes, which also requires all businesses to issue appointment letters to its employees. In a country where a large section of employees work in an informal environment without a clear line of sight of their rights, this should be a welcome move for many of them.

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[1] Notification No. GHR/2024/19/LED/TGS/e-file/11/2023/2453/M.3 dated 5th Feb 2024 issued by Labour, Skill Development and Employment Department

[2] Section 16(3) and 16(4) of Gujarat Shops and establishment Act.

[3] ANDHRA PRADESH GAZETTE NOTIFICATION DATED 1ST NOVEMBER, 2022 GRANTING EXEMPTION TO ALL RETAIL ENTERPRISES TO REMAIN OPEN ON ALL DAYS

Written by: Zunaid Akhtar Sarkar

Co-authored by: Abhishek Roy

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