– Punjab Cuts Red Tape for Lakhs of Small Businesses in Historic Labour Act Overhaul
– Penalties Rationalized, Harassment Curbed, Labour Rights Protected
– Registration within 24 Hours; No More Court Runs for Minor Violations
Chandigarh ———– The Punjab Cabinet, led by Chief Minister Bhagwant Singh Mann, has approved a major amendment to the Punjab Shops and Commercial Establishments Act, 1958, aimed at reducing compliance burdens on 95% small businesses and enhancing the ease of doing business in the state.
The decision was taken at a meeting of the Council of Ministers held today at the Chief Minister’s official residence.
A spokesperson from the Chief Minister’s Office disclosed that, under this progressive amendment, all establishments employing up to 20 workers will be exempted from all provisions of the Act. This move is expected to directly benefit lakhs of shopkeepers across Punjab. However, such establishments will still be required to submit relevant information to the Labour Department within six months of the Act coming into force or the commencement of their business.
To enhance employee earnings, the permissible overtime in a quarter has been increased from 50 hours to 144 hours. Additionally, the daily spread-over period of work has been extended from 10 hours to 12 hours, inclusive of rest intervals. Nevertheless, employees must be paid overtime at double the regular rate for work exceeding 9 hours per day or 48 hours per week.
The registration process has also been streamlined and the Establishments with 20 or more employees will now receive deemed approval for registration within 24 hours of application submission. Under the amendment, establishments employing up to 20 workers are only required to provide basic information and are not obligated to register. Moreover, penalties under Sections 21 and 26 have been rationalized—raising the minimum fine from Rs. 25 to Rs. 1,000 and the maximum from Rs. 100 to Rs. 30,000.
To prevent harassment and allow businesses time to achieve compliance, a three-month grace period will be provided between the first and second offences, as well as subsequent ones. A new Section 26A has also been introduced to allow for the compounding of offences, thereby decriminalizing the Act and eliminating the need for shopkeepers to attend court. Meanwhile, all the securities and rights provided by various labour laws will be adhered to for safeguarding the interests of the labourers.