Model Shops And Establishments (Regulation Of Employment And Conditions Of Service).


April 28, 2017

Model Shops And Establishments (Regulation Of Employment And Conditions Of Service) Bill, 2016


On June 29, 2016, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi finalized and approved the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 (“Model Bill”). The Model Bill is a welfare legislation aimed at bringing uniformity in regulation of employment and conditions of service throughout the country. As this subject falls within the State List, States have been granted autonomy to adopt and modify this Model Bill as per their requirement. The Model Bill will now be sent to States/UTs to enable them to modify their individual Acts, if they so desire either by adopting the said Model Bill as it is or after modifying its provisions as per their requirements. This Model Bill was finalized after detailed deliberations and discussions with public through internet and with employees/labour representatives, employers’associations/federations and State Governments through tripartite consultative process.

highlights of the model bill:
  • It will only cover establishments employing ten or more workers except manufacturing units.

  • Freedom to operate 365 days in a year.

  • Freedom for opening/closing time of establishment.

  • Exemption of highly skilled workers (e.g. 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 a maximum of 125 overtime hours in a quarter.

  • Women to be permitted to work 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.

  • Establishing a simplified one common online registration procedure.

  • The Model Bill empowers the Government to make rules regarding adequate measures to betaken by the employer for the safety and health of workers.

  • Clean and safe drinking water.

  • Provisions for common crèche, lavatory, 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.

  • The Model Bill entitles every employee to 8 days casual leave, one day of leave for every 20 days of work for every worker who has worked for 240 days in a subsequent year and 8 days of paid leave for festival holidays.


This Model Bill is being hailed as a welcome legislation for shops and commercial establishments as it will encourage trade and commerce, more specifically in the area of retail. The retail sector especially the shopkeepers stand to benefit most out of this Model Bill as it would result in elimination of licensing bureaucracy and bribery, thus resulting in decline of corruption. This Model Bill will also give a boost to employment opportunities to women as they will be permitted to work during night shifts with adequate safety and security provisions. The enhancement of working hours in shops and establishments (24X7) with adequate provision for protection of the workers will give rise to requirement for additional manpower which will result in additional employment.The Model Bill would 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 and facilitate the ease of doing business.



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