Shops & Commercial Establishments Vs Occupational Safety, Health & Working Conditions Code 2020.

K.Vittala Rao.
Legal & Management Consultant.
Bangalore

The views in this article are author’s point of view. This article is not intended to substitute legal advice.
An Area of Concern to be addressed by the Central as well as State Governments and also by all professionals.

Now, we are very familiar with the provisions of Occupational Safety, Health & Working Conditions Code 2020.
The draft rules based on the Central Draft Rules, also have been published by most of the State Governments.
It is appropriate now to deeply analyze various implications arising out of the Code.
The Code has repealed the existing legislations under the scope of the Code, mainly Centrally enacted with State Rules for implementations.
The Code has not touched upon any State Legislations like, Shops & Commercial Establishments Act, Labour Welfare Fund Act, National Festival Holidays Act etc.
Arising out of this, we need examine the enforceability of Shops & Commercial Establishments Act with Rules and the controversies while deeply examining the Code.
Are there are any overlapping or the extent of repugnancy?
Hence, I have made an attempt to analyze and present to all Legal Practitioners, HR Fraternity and no exceptions to State / Central Authorities.

Shops & Commercial Establishments Act

​Applicable to all Shops & Commercial Establishments with no limit prescribed.
Covers all employees except persons holding positions of management.

OSH & WC Code 2020

​Applicable to all Establishments as defined under Sec 2 (v).  The coverage limit is 10 or more workers are employed.
Let us note “workers”, means as defined under IR Code 2020.

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​Does it mean that Shops & Commercial Establishments Act, is applicable to those employing less than 10 workers only?
In case the Establishments employing more than 10 workers, then the OSH & WC Code is applicable as well as State Shops Act ??
In such an event, the Establishments is covered under both the State Shops Act as well as Code??

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Registration is mandatory under State Shops Act

​The draft Code Rules, mainly addressing Factories, Plantations, Motor Transport undertaking, Bidi & cigar establishments, Audio visual undertaking, Building & Other Constructions, Establishments Employing Contract Workers, that employing more than 50 contract workers.
No mention of Registration of Commercial Establishments.

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​Under the Code, there is no provision for Registration of Commercial Establishments, unlike under State Shops Act.
Here, it is overlapping. When Code comes into effect, should the Establishments comply with State Shops Act ?
Here, Code being a Central Act, does it override the State Shops Act ??

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​Some State Acts prescribes letter of appointment.
For instance, Karnataka Shop Act mandates FORM Q.

​Letter of appointment/Experience certificate. -
FORM X: /FORM XI

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Extra Wages for overtime.
Here, the word “Employee” has been mentioned. Here “Employee” means all persons employed except persons holding positions of Management.

​Extra Wages for overtime. -
Here, the word “WORKER” has been mentioned in the Rules.
It means that Supervisory & Managerial personnel are excluded from payment of overtime.

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​In the State Shops Act, the eligibility is 240 days worked during the previous year, the annual leave shall be given one day for every 20 days worked.
In all most all the State Shops Act, CL and SL are stipulated.
In most of the State Shops Act, the accumulations vary from 30 days to 60 days.

​Annual Leave at the rate of one day for every 20 days worked shall be given.
The eligibility is reduced to 180 days as against 240 days.
No stipulations of CL or SL.
Accumulation of leave is limited to 30 days.

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In all the State Shops Act, submission of Annual Returns and in some States half yearly returns.

​Submission of Combined Annual Returns online is mandated. This combined return covers all the Four Codes

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All the above are overlapping and creates controversies.

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In the Code, particularly, the chapter on “Contract Labour” and chapter on Penalties & Offences are applicable to any Shops and Commercial Establishments employing 10 or more workers.

Some provisions under State Shops Act are beneficial to employees and some provisions under the Code are not beneficial to workers and vice versa.

Hence, once the Code comes into effect, these controversies and varied opinions are bound to be in place.

At least now, before the Code comes into effect, effective interactive discussions must be held by all stake holders. It is high time; all the State Governments must consider the futuristic repercussions to find a way out.

Here, it is a matter of interest and debatable that if we consider Article 254 of the Constitution of India, then, it may be argued that the States Shops Act   may be repugnant and void.
 
Article 254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States.

1. If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
2. Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:

 
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
 
“Extent of laws made by Parliament and by the Legislatures of States-

1. Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State
2.  No law made by Parliament shall be deemed to be invalid on the ground that it would have “extra territorial operation”

Hence, with regard to the territory concerned, Article 245 says that subject to the provisions of the constitution the parliament is eligible to make laws for the entire or any part of the territory of India, clause 2 states that if a law has been made by the parliament, it shall not be deemed invalid on the basis that it may have extraterritorial operations and takes effect outside the territory of India.
 
According to Article 245(1), the Indian parliament can make laws for any part of India’s territory or the entire country, and the state legislature can make laws for any part of the state or the entire state. “A law made by parliament shall not be invalid for the reason that it has extraterritorial operations,” according to Article 245(2).

In view of the above points put forth, can we opine that ultimately, State Shops Acts renders itself void?

K.Vittala Rao.
Legal & Management Consultant.
Bangalore
14th July, 2020

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