THE KARNATAKA SHOPS AND COMMERCIAL

ESTABLISHMENTS ACT 1961

An Act to provide for regulation

of service conditions of persons
employed in shops and
commercial establishments in the
state of Karnataka
 definition

Commercial establishment means a

commercial or trading or banking or insurance
establishment,
 an establishment or administrative service in which person
employed are mainly engaged in office work or
Hotel, restaurant, boarding or eating house, a café or any
other refreshment house,
a theatre or any other place of public amusement or
entertainment and
includes such establishments as the State government may
by notification declare to be a commercial establishment for
the purposes of this Act
 Definition
•Employee means a person
•wholly or principally employed in or in connection with any
establishment
•whether working on permanent, periodical, contract or piece
rate wages or on commission basis,
•even though he receives no reward for his labour and
includes an apprentice,
•any clerical or other member of the staff of a factory or
industrial establishment who falls outside the scope of the
Factories Act 1948,
•but does not include a member of the employer’s family
 definition

•Establishment means a shop or a

commercial establishment
•Family in relation to an employer
means the husband or wife, son
daughter, father, mother, brother or
sister of such employee who lives
with and is dependent on him
 Definition

•Shop means any premises

•where any trade or business is carried on or
•where services are rendered to customers, and includes
• offices, storerooms, godowns, or warehouses, whether in the
same premises or otherwise used in connection with such trade
or business,
•but does not include a commercial establishment or a shop
attached to a factory where the persons employed in the shop
which falls within the scope of factory Act 1948
 Chapter II
Registration of establishments
•Within 30 days of the establishment commencing its operation the
employer shall make an application to the Inspector along with prescribed
fee.
•The inspector on being satisfied of the eligibility requirement and
correctness of the application will register the establishment and send the
certificate to the employer
•The certificate shall be prominently displayed in the shop.
• Any changes shall be informed by the employer to the inspector within 15
days.
•Based on such information the inspector shall make changes in his records
• In the event of closure it shall be informed to the inspector within 15 days
by employer and the certificate shall be surrendered. Inspector will cancel
the registration
 6A. issue of appointment order

Employer shall issue appointment orders to

the persons employed in shops and commercial
establishments
in writing indicating the name, designation,
wage scale of such person, and other terms and
conditions of his employment and
serve the same on such person
within thirty days from the date of
appointment in his establishment
 Chapter III
7. Hours of work

•Not more than nine hours a day and

•forty-eight hours in any week.
•Total hours including OT shall not exceed ten
hours a day except on account of work relating
to stock taking and preparation of accounts.
Total OT hours shall not exceed fifty in a
period of three continuous months
 Hours of work

• Any person working for more than 9 hours a day or forty

eight hours a week is entitled to OT at twice the normal wage
rates
•Rest interval: no person shall work for more tan five hours
before he as had an interval of rest at least one hour
• Spread over. Including the rest interval it shall not exceed 12
hours a day
•Opening and closing hours
•Establishment shall be opened and closed only during the
hours prescribed by the government
 12 weekly holidays

One day per week

Employee (including a daily wager) is entitled to full wages
for weekly holiday
Such day shall be approved by the inspector and
Displayed prominently in the notice board
Such day shall not be changed often earlier than three
months
Government may allow the establishment to remain open all
the days if it is satisfied that additional staffs are employed to
provide weekly holiday.
13. Selling outside establishments prohibited
after closing hours.

No person shall carry on in or adjacent

to a street or public place the sale of any
goods after the hour fixed under section
11 dealing in the same class of goods
 Chapter IV
Annual Leave with Wages
15. One day for every twenty days work performed by him in
case of an adult
One day for every fifteen days of work performed by him in
case of a young person
for the purpose of Annual leave calculation the days of layoff
by agreement or standing order, maternity leave up to 12
weeks in case of female employees, and the earned leave
availed during the year shall be deemed to be days on which
the employee has worked in an establishment but shall not earn
leave for such days.
If any employee is entitled to more favorable leave rules
they shall apply[s. 14]
 Annual Leave with Wages

An employee discharged/terminated during the year is

entitled to earned leave on pro rata basis
When an employee is discharged or dismissed on medical
grounds the annual leave balance is encashable.
When the services are terminated the entire balance of
Earned leave shall be encashable.
In case of resignation the leave applied but refused sanction
by the employer is encashable.
Unavailed leave can be carried forward to the next year up to
30 days in case of adults and up to 40 days in case of young
persons.
 Annual Leave with Wages

Leave applied but refused sanction can be carried forward

without any limit
Leave application shall be made atleast 10 days in advance
for availing
Earned leave may be availed upto three times in a year or as
may be agreed between the employer and employees
To ensure continuity of work the employer may frame a
leave scheme in agreement with the representatives of
employees.
Such scheme shall be in force for a period of one year
 Annual Leave with Wages
•Such scheme shall be properly displayed in the notice board
•Leave requested at least 10 days in advance cannot be refused,
unless for such refusal there is a provision under the scheme
framed by the employer.
•Every employee shall be entitled to leave with wages on
medical grounds upto 12 days a year.
•Earned leave on medical grounds shall be sanctioned even if it
is not applied 10 days in advance.
•In such cases the wages shall be paid within 15 days from the
day the leave begins
•Unavailed leave shall not be taken into consideration in
computing the period of any notice required to be given before
discharge, dismissal
 16 wages during leave period

•Earned leave shall be on full wages

•An employee who has been allowed leave for
not less than four days in case of adult and five
days in case of young person shall before his
leave begins be paid the wages
•Payment of wages Act and workmen’s
Compensation Act is applicable to shops and
commercial establishments covered under this
act
 Chapter VI
Employment of Children and Women

No child shall be required or allowed to work in any

establishment
No woman or a young person shall be required or
allowed to work whether as an employee or otherwise
in any establishment during nights.
Women may be employed during the night if the
employer provides transportation to and from the
residence and security to the women employees
 39.Notice for removal and right to Appeal

•Any employee who has continuously served at least

for six months cannot be removed or dismissed
without reasonable cause and unless and until one
month’s previous notice or pay in lieu of notice is
given to him.
•Notice or pay in lieu of notice is not required if the
employee is removed/dismissed for misconduct after
due process of enquiry
An employee removed/dismissed has the right to
appeal to the notified officer of the government.
 39.Right to compensation and revision

•Where the appellate authority comes to the conclusion that the

removal / dismissal is not without reasonable cause or without
misconduct being proved and the employer refuses to reinstate
him in the service
•He is entitled to compensation from the employer not
exceeding one months pay for every year of service.
•Any person aggrieved by an order of the appellate authority
may apply to District Judge for revision of the case.
No employee who has been awarded compensation under
this section shall be entitled to bring a civil suit in respect of
the same claim