Source | LiveMint
New Delhi: The cabinet on Wednesday approved the ‘Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill’ that will allow malls, shops, restaurants, banks and cinemas to operate 24 hours a day, effectively boosting employment generation in the country.
All shops and establishments employing 10 or more workers but not covered under the Factories Act will come under the purview of the new law. However, it won’t be mandatory across the country, and it will be up to the states to adopt the law, with suitable modifications.
The labour ministry, which is the nodal ministry for the law, will write to states advising them to adopt it as it will generate jobs for their citizens, a labour ministry official said. It will be up to individual states to implement it.
There are three key outcomes of this move—more job creation, better utilization of resources and quick return on capital expenditure, said labour secretary Shankar Aggarwal.
Abneesh Roy, analyst with Edelweiss Securities Ltd, said the new law, if implemented across the country, will boost consumer spending but in every case, retailers would need to look at cost-benefit analysis.
“Potentially, number of hours will double, but in our view, in most cases, based on cost-benefit analysis, stores may extend additional hours by 3-4 hours in most cases. Bigger benefit will be in Delhi and state capitals due to higher concentration of government employees and longer working hours,” said Roy.
Aggarwal said his ministry has received feedback from many states that they want to adopt the bill as it will benefit them more than the central government. “Preparing such a bill was tedious and states were waiting to get a model bill like this from us. We are now giving it to them,” he said.
Once adopted by a state, it will allow women to work night shifts and there will be “no discrimination against women in the matter of recruitment, training, transfer or promotion”.
Facilities such as cab services, night crèches and ladies’ toilets should be compulsorily provided by employers in case women are working night shifts.
Women are not allowed to work night shifts under the Factories Act and an amendment to this is pending before Parliament.
The cabinet approval comes in the wake of a slew of measures that the government has taken to boost employment creation in the country. Last week, the Union government relaxed rules for foreign direct investment in sectors ranging from pharmaceuticals to aviation. It also approved a package for the labour-intensive textiles sector.
K.C. Gupta, labour commissioner of Madhya Pradesh, said his state has already given some relaxations to malls and banks and will certainly review the centre’s model bill. “If they have good inputs, the state government may adopt them, but for that, our legislative assembly has to approve it,” Gupta added.
Flexibility to open retail establishments 24×7 will add thousands of jobs and make retail markets more vibrant, said industry executives on a day stocks of retail companies soared.
“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 & it also contributes towards important initiatives such as ‘Make in India’ because it boosts domestic consumption,” said Krish Iyer, president and chief executive officer of Walmart India.