Exemptions to IT & ITeS and Financial Services Sector Under the Shops and Establishments Enactment in Gujarat

On February 05, 2024, the Labour, Skill Development and Employment Department of Gujarat (“Department”) vide its notification gave exemptions to the establishments of ‘IT (Information Technology)’ and ‘ITeS (Information Technology Enabled Services)’ (“IT & ITeS”) and ‘Financial Services’ sectors from certain provisions of the Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019 (“S&E Act”) for a period of 2 (two) years from the date of issuance of the said notification (“Exemption Period”).

Vide notification, employers of IT & ITeS and Financial Services sectors are excluded from the purview to comply with Section 12 (Fixing of Hours of Work) and Section 14 (Spread Over of Hours of Work) of the S&E Act, respectively for the Exemption Period. According to Section 12 of the S&E Act, no worker shall be required or permitted to work in any shop or establishment in Gujarat for more than 9 (nine) hours per day and 48 (forty-eight) hours in a week. The ceiling limit provided for total number of working hours in any day and in a week in the S&E Act, shall not apply to employers of IT & ITeS and Financial Services sectors, providing them with an option to make their employees work over and above the total number of working hours stipulated under the statute.

The Department further exempted the establishments of IT & ITeS and Financial Services sectors from the restrictions pertaining to the spread over of working hours as provided under Section 14 of the S&E Act. The said provision stipulates that working hours of a worker employed in any shop or establishment in Gujarat shall not exceed 10.5 (ten and a half) hours in any day and in case of a worker performing any intermittent nature of work or urgent work, the working hours shall not spread over, above 12 (twelve) hours. Under the said notification, for workers employed in IT & ITeS and Financial Services establishments, the spread-over of working hours may exceed above 10.5 (ten and a half) hours and above 12 (twelve) hours in case such worker is undertaking any intermittent nature of work or urgent work.

However, the establishments of IT & ITeS and Financial Services shall be permitted to avail the abovementioned exemptions under the aforesaid notification, only if they comply with all the applicable remaining provisions of the S&E Act, including but not limited to, paying their employees for such overtime work which shall be twice of their ordinary rate of wages; limiting overtime hours of such employees to a total of 125 (one hundred twenty-five) hours in a quarter of 3 (three) months; and ensuring compliance with applicable safety and welfare measures, leaves and the weekly off requirements etc., as per the provisions of the S&E Act.