Model Shops and Establishments ActThe Union Cabinet has approved a Model Shops and Establishments (regulation of employment and conditions of services) Act which proposes to allow malls, cinema halls, restaurants and other retailing establishments to remain open on all days, 24X7.
The model law is aimed at generating addition employment as the shops and establishment will have freedom to operate for longer hours requiring more manpower.
“The Model Shop & Establishments act by the Central Government is a welcome step and we hope all the states will adopt it. With flexibility available to retailers to open their establishment 24×7, thousands of additional skill jobs will be added, but it will also make the retail markets across the country very vibrant giving customers flexibility and convenience to shop anytime,” President & CEO, Walmart India, Krish Iyer told Indiaretailing Bureau.
“24×7 policy for retail stores in other developed economies has given significant boost to their growth in the past. A vibrant retail environment is critical to the economic growth and it also contributes towards important initiatives such as ‘Make in India’ because it boosts domestic consumption,” he further stated.
The Cabinet approval, however, does not mean it has become a law as the onus will be on the state governments to adopt the Central Government’s proposed Model Act for retailing. The act will also not go to the Parliament as it is just a model legislation and is not binding on states.
Officials said the Model Act would also enable women to work during the night in such offices with mandatory cab services and other workplace facilities.
With the exception of factories, the draft law proposes to cover all premises or shops with work related to printing, banking, insurance, stocks and shares, brokerage or theatres, cinema and any other public amusement and which are currently not covered under the Factories Act 1948.
All such units which employ 10 or more workers are proposed to be subject to the Act.
Executive Director, Pacific India (Pacific Mall), Abhishek Bansal told Indiaretailing Bureau, “The passing of the Models Shops and Establishment Bill will have a positive effect on the market, as it will lead to increase in employment opportunities. This will also enable level playing for brands across online as well as offline retail platforms. At Pacific Mall currently shops that close by 9 pm can now remain open till about 11 pm, which will be good for customers who only get a chance to shop after they return home from work or people working late shifts.”
“Being a premium high-end shopping and leisure destination we have invested in state of the art security management service and surveillance systems and we will have to look into hiring and training more people according to their job profiles post this change,” he added.
The Model Act would bring uniformity in the legislative provisions, making it easier for all the states to adopt it and thereby ensuring uniform working conditions across the country.
At present, states have their own legislation which regulates shops and establishments like their closing and opening times, holidays and working shifts of women.
In March, Maharashtra had issued a notification allowing shops and malls to remain open 365 days a year till 10 p.m. States including Karnataka and Andhra Pradesh have also come up with similar amendments to their shops and establishment rules.
Chairman & Country Head, JLL India, Anuj Puri said, “The retail sector accounts for about 15 per cent of the country’s GDP and this is expected to increase further with round the clock operations. Already, the government had announced reforms to loosen restrictions on inbound investments in retail a few days ago. Single-brand retailers like Swedish furniture giant, IKEA, and smartphone manufacturer, Apple, stand to benefit. JLL had first announced late last year that 2016 could see single-brand retail stores opening up.”
He added, “These announcements – coupled with high private equity inflows into the retail real estate – look very promising. ‘Acche Din’ now seem close at hand for Indian retail and the retail real estate industry.”
Retailers have welcomed the government’s decision to allow shops, malls and cinema halls to run round-the-clock, saying it will lead to a new level of retailing in the country. The move will also add ‘thousands’ of additional skilled jobs, besides providing flexibility and convenience to customers.
“This will definitely help in improving efficiency and a new level of retail can open up. I will call it the end of permission raj,” Managing Director and Customer Care Associate, Shoppers Stop, Govind Shrikhande was quoted by PTI as saying.
Lacoste India Managing Director and CEO Rajesh Jain said it is a good step from the Centre.
“For us, we don’t keep all our stores open for 24 hours, but we look at strategic locations. Extended hours will definitely help. This move will be very good, particularly for food and beverage industry,” he was quoted by PTI as saying.
Managing Director, Kelly Services & Kelly OCG, Kamal Karanth said, “We see this as a landmark Bill that will boost employment across many sectors. It will create tremendous job opportunities across India and we expect a 8-10 per cent growth in jobs. These opportunities will also drive workforce movement across cities as skilled labour from tier 2 and tier 3 cities will find greater options of livelihood with the opening up of more jobs.”
He added, “Greater consumerism will also lead to better utilisation of resources. The biggest driver will be retail shopping malls, as it will give a level playing field between online and offline retailers as now customers will have better options available all the time. Hospitality will also see a larger impact. This will also lead to greater gender diversity as women will get better opportunities to work and make better decisions based on their work life situations. Greater flexibility at work will impact both men and women.”
He concluded, “However, companies should also ensure the safety of their women workforce working late. The responsibility is greater for the employers as they will have to provide safety at work and also while travelling to work, but options for employees will now be larger.”