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ANY ONE DIRECTOR CAN BE NOMINATED TO BE ACCOUNTABLE FOR THE OFFENCE UNDER THE MAHARASHTRA SHOPS AND ESTABLISHMENT ACT, 1948 |
Employers of company or a establishment, apart from doing core activity of the establishment, are also required to look upon other activities connected to core activity, such as finance, marketing, administration for development and growth their establishment, but at the same time it is also essential that compliances under applicable laws are taken care of. Hence, establishments end up having a separate team headed by executive director or a partner that exclusively deal with compliances of establishment under various Laws including Labour Laws.
Every establishment is compulsorily required to be compliant under such applicable Laws and any fault in doing so can give rise to instances of non-compliances that may cause employers to face consequences as may be prescribed under such laws
When such establishment has more than one Employer, then it is generally observed that such employers, though concerned with all activities of the establishment, mutually distribute the responsibilities of different fields of operation amongst themselves, for instance: one employer might be taking care of finance of such establishment, the other might be taking care of production activity of that establishment, one might be assigned with the work of marketing and similarly one employer may be taking care of legal compliances under various applicable laws.
But when the instances of non-compliances are detected or when such non-compliances leads to prosecution, then Legal Notices are served on all Employers or directors of the establishment, who have to face legal consequences for such non-compliance, irrespective of their responsibility
The Maharashtra Shops and Establishments Act, 1948 provides a solution to deal with such issues which is attempted to be elucidated in this exposition as follows:
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DETERMINATION OF EMPLOYER UNDER SECTION 58 FOR THE PURPOSE OF MAHARASHTRA SHOPS AND ESTABLISHMENTS ACT, 1948 |
When an establishment is owned by many employers, then these employers can nominate one employer, from among them by a mutual consent, who shall act as an employer on behalf of them for the purpose of this Act and shall be liable for the offences for which an employer is liable under the Maharashtra Shops Establishments Act, 1948
Section 58 of the Maharashtra Shops And Establishments Act, 1948, deals with the rules relating to the determination of the employer for the purpose of this Act as follows:
1. According to sub-section (1) of Section 58 of the said Act, if the establishment is owned by FIRM or an ASSOCIATION OF INDIVIDUALS, then any ONE, of the INDIVIDUAL PARTNERS or the MEMBER thereof can be prosecuted for such offence for which an employer is liable under this Act
2. Similarly according to sub-section (2) of Section 58 of the said Act, if the establishment is a COMPANY or a PRIVATE COMPANY and is owned by many DIRECTORS or SHAREHOLDERS, then any ONE of such director or shareholder shall be held liable for such offence for which an employer is liable under the Act
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'NOMINATION' A CONDITION PRECEDENT |
Before, any ONE person is held accountable for the offences for which an employer is liable under the Act, the Maharashtra Shops And Establishments Act, 1948 provides a condition precedent to such charge.
Maharashtra Shops and Establishments Act, 1948 in its 'Proviso' Clause of sub-section (1) & (2) of Section 58, provides that the INSPECTOR shall be notified by such firm or association or Company, that ONE of its individual partners or a members or directors or shareholders, has been NOMINATED as an employer who is a resident of this State and shall be deemed to be an employer for the purpose of this Act until any notice of cancellation of such nomination or until he ceases to be a partner or member or director or shareholder of the Firm or Association or Company respectively
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CONCLUSION |
There are two possible scenarios:
1. The establishment is not yet registered under the Maharashtra Shops and Establishments Act, 1948, but is yet to obtain the Registration Certificate under the said Act
2. The establishment is already registered and has obtained a Registration Certificate under the said
In the first instance, the employers must make such aforesaid Nomination before registration and notify the same to the Inspector, so that the Registration Certificate contains the name of only that employer who has been nominated on behalf of all the employers.
Further, in the second scenario, the employers must not only communicate such Nomination to the Inspector, but should also submit a Notice of change under Section 8 of the Act read with Rule 8, in order to the reflect name of only that nominated employer as an employer in the Registration Certificate
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EXCERPT OF THE MAHARASHTRA SHOPS AND ESTABLISHMENTS ACT, 1948 & THE MAHARASHTRA SHOPS AND ESTABLISHMENTS RULES, 1961 |
THE MAHARASHTRA SHOPS AND ESTABLISHMENTS ACT, 1948 – SECTION 58: (l) Where the owner of an establishment is a firm or other association of individuals, any one of the individual partners or members thereof may be prosecuted and punished under this Act for any offence for which an employer in an establishment is punishable:
Provided that the firm or association may give notice to the Inspector that it has nominated one of its members who is resident in the [State] to be the employer for the purposes of this Act and such individual shall so long as he is so resident be deemed to be the employer for the purposes of this Act, until further notice cancelling the nomination is received by the Inspector or until he ceases to be a partner or member of the firm or association.
(2) Where the owner of an establishment is a company, any one of the directors thereof, or in the case of a private company, any one of the share holders thereof, may be prosecuted and punished under this Act for any offence for which the employer in the establishment is punishable:
Provided that the company may give notice to the Inspector that it has nominated a director, or, in the case of a private company, a shareholder who is resident in the State to be the employer in the establishment for the purposes of this Act, and such director or shareholder shall so long as he is so resident be deemed to be the employer in the establishment for the purposes of this Act, until further notice cancelling his nomination is received by the Inspector or until he ceases to be a director or shareholder.
THE MAHARASHTRA SHOPS AND ESTABLISHMENTS RULES, 1961 – SECTION 8: It shall be the duty of an employer to notify to the Inspector, in prescribed form, any change in any of the particulars contained in the statement submitted under section 7 within such period, after the change has taken place, as the State Government may prescribe in respect of any establishment or class of establishments. The Inspector shall, on receiving such notice and the prescribed fees and on being satisfied about its correctness, make the change in the register of establishments in accordance with such notice and shall amend the registration certificate or issue a fresh registration certificate, if necessary.
THE MAHARASHTRA SHOPS AND ESTABLISHMENTS ACT, 1948 – RULE 8: The employer shall notify to the Inspector of the local area concerned, in Form E along with such fees as are specified in Schedule II any change as respects the total number of employees within fifteen days after the expiry of the quarter to which the change relates; and any change, other than in respect of the total number of employees, in respect of the information contained in the statement furnished by him under rule 5 within thirty days after the change has taken place:
Provided that in local areas where the Act is in enforced by the State Government the employer shall credit the fees in the Government Treasury and forward a copy of the challan along with the notice of change in Form “E†or in the alternative, forward along with such notice, a crossed postal orders of the requisite amount
Explanation.- For the purpose of this rule quarter means a quarter ending on 31st March, 30th June, 30th September and 31st December of any year
