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Schedule A Demo

Tamil Nadu Shops and Establishments Act, 1947

Background

The Tamil Nadu Shops and Establishments Act, 1947 was enacted to regulate the working conditions of employees in shops, commercial establishments, restaurants, theatres, and other notified establishments in Tamil Nadu. The Act ensures welfare, safety, health, and rights of employees working in such establishments. Over the years, the Act has been amended several times, including through the Tamil Nadu Shops and Establishments (Amendment) Act, 2018 and Amendment Act, 2023, to address modern workplace practices such as digital applications, online registration, IT/ITeS-specific compliance, and improved transparency in labor administration.

The rules under the Act, namely the Tamil Nadu Shops and Establishments Rules, 1948, provide detailed procedures on registration, maintenance of records, display requirements, payment of wages, working hours, leave, first-aid, safety, and employer obligations.

Applicability

  • The Act applies to all shops and establishments operating within Tamil Nadu, including:
    • Shops, commercial establishments, factories, residential hotels, restaurants, eating houses, theatres, and places of public amusement/entertainment employing 10 or more workers.

Compliance requirements under the Act in accordance with the Rules

  • Shops and Establishment Registration Certificate (Section 3)
    Every employer of an establishment employing ten or more workers shall, within six months from commencement of business, apply for registration and obtain a registration certificate

Amendments realted to registration under Tamil Nadu Shops & Est.
a) Insertion of Rule 2A, viz. Application for registration of establishment : Every application for registration of an establishment shall be made in Form-Y to the Inspector of the area in which the establishment is located with a fee of Rs. 100/-
b) Insertion of Rule 2B, viz. Issue of registration certificate for establishment:  The Inspector shall issue registration certificate online in Form-Z within twenty four hours from the time of making of the application under rule 2A and that Register of establishments shall be maintained by the Inspector in Form-ZA
c) Insertion of Rule 2C, viz.  Intimation of existing establishments:  The employer of every establishment in existence on the date of commencement of the Tamil Nadu Shops and Establishments (Amendment) Act, 2018 shall furnish online, through the designated web portal of the Labour Department, details of the establishment in Form ZB to the Inspector of the area in which the establishment is located.

d) Insertion of Rule 2D, viz. Amendment of Registration Certificate: Application to be made online and a fresh registration certificate shall be issued online in Form-Z within twenty four hours from the time of making of the application

  • Intimation of change in particulars of Registration Certificate (Section 3(6))
    The employer must intimate the Inspector within 30 days of any change in particulars furnished in the registration application. Such intimation must be accompanied by prescribed fee. The Inspector shall amend or issue a fresh certificate accordingly.
  • Intimation of closure of establishment (Section 3(7))
    The employer shall, within 30 days of closure of the establishment, intimate the Inspector. Upon receipt, the Inspector will cancel the registration certificate.
  • Daily and weekly hours of work and interval for rest (Section 14)
    No employee shall be required or allowed to work more than 10.5 hours a day or 57 hours a week. Overtime may be permitted, provided total work does not exceed 10 hours per day and 54 hours per week. No employee shall work more than four continuous hours without at least one hour rest.
  • Compliance with Weekly Holidays (Section 16)
    Every employee shall be allowed one whole day holiday per week. For certain establishments, Government may require an additional half-day holiday. Wages cannot be deducted for weekly holidays, and employees cannot be called to work on such days.
  • No employment of children and young persons (Section 17)

No child shall be required or allowed to work in any establishment.

  • Cleanliness of Establishment (Section 20, Rule 5)
    Establishments must be kept clean and free from nuisance. Periodic lime-washing/colour washing of walls, ceilings, passages, and staircases at least once every 12 months; woodwork painted or varnished every 7 years; premises disinfected and deodorized as prescribed.
  • Precautions for safety of employees in case of fire (Section 23, Rule 7)
    Employers must adopt adequate fire safety measures as deemed necessary by the Inspector.
  • Annual Holidays entitlement (Section 25(1), (3))

Employees completing 12 months’ continuous service are entitled to 12 paid holidays in the following 12 months, which can be accumulated up to 45 days. If denied or discharged before availing, employer must pay equivalent wages.

  • Wages for overtime work (Section 31, Rule 10)

Overtime work shall be paid at twice the ordinary rate of wages. Ordinary hourly rate is calculated by dividing total wages for hours actually worked during wage period by number of actual hours worked (excluding overtime hours).

  • Time of payment of wages (Section 32)

Wages shall be paid before expiry of the fifth day after the wage period. If employment is terminated, wages shall be paid within two working days of termination. All payments must be made on a working day.

  • Deductions from wages (Section 34)

Wages must be paid without unauthorized deductions. Permissible deductions include: absence from duty (Sec. 36), damage or loss (Sec. 37), services rendered (Sec. 38), recovery of advances (Sec. 39 & Rule 13), and breach of contract (Rule 12).

  • Imposition of fines on employees (Section 35(1),(3),(5),(6),(7), Rule 11(1)(a),(e))
    No fine can be imposed except for approved acts/omissions notified with prior government/authority approval. Employees must be given opportunity to show cause. Fines must be imposed within 60 days of act/omission and deemed imposed on date of occurrence.
  • Display of Notice of Acts/Omissions (Section 35(2), Rule 11(1)(d))

Employers must display at the main entrance a list (in English and majority language) of approved acts/omissions for which fines may be imposed.

  • Form P: Register of Fines, Deductions & Advances (Section 35(8), Rule 11(4))
    Employers must maintain Register in Form P for fines, deductions, damages/loss, and advances. Employees must sign/thumb-impress in Form P on the next working day following the last day of the month.
  • Form R: Register of Wages (Section 47, Rule 11(5))

Every employer must maintain a Register of Wages in Form R.

  • Form T: Wage Slips (Section 47, Rule 11(6))

Employers must issue monthly wage slips in Form T one day before or on date of wage disbursement (or with daily wages). Wage slip must be signed by employer/authorized person and by employee, and copies maintained for inspection.

  • Notice of dismissal (Section 41)

No employer may terminate an employee with 6+ months continuous service without one month’s notice or wages in lieu, except in cases of proven misconduct established through proper enquiry.

  • Name board of establishments (Rule 15)

Name board must be in Tamil, with English version in second place, followed by others. Tamil must be predominant and in reformed script.

  • Form Q: Register of Employment (Section 47, Rule 16(1))

Employers must maintain Register of Employment in Form Q.

  • Form S: Notice of persons employed, work periods, etc. (Section 47, Rule 16(4))
    Employers must exhibit conspicuously in Form S the names of employees, work periods, rest intervals, and weekly holiday. A copy must be sent to the Assistant Inspector before work commences. Employees cannot be engaged contrary to this notice.
  • Maintenance of Visit Book (Section 47, Rule 16(11)

Employers must maintain a visit book for inspectors’ remarks and produce it when required.

  • Form O: Certificate of maintenance of records (IT/ITeS) (Rule 16-C)
    Employers of IT/ITeS must submit Form O in duplicate to the Assistant Inspector of Labour every half-year. Certificate for half-year ending June 30 is due July 31, and for half-year ending December 31 is due January 31.
  • Form K: Annual Return (Section 47-A)

Every employer must furnish an annual return in prescribed form and manner to the designated authority.

  • First-aid facilities (Section 22-E, Rule 6A)

Every establishment must provide at least one first-aid box for every 150 employees. The box must be marked with a red cross on a white background, contain basic first aid items, and be replenished promptly when needed.

  • Display of Shops & Establishment Registration Certificate (Section 3(5))
    The registration certificate must be prominently displayed in the establishment by the employer.

Penalties & Punishment

  • Failure to comply with certain provisions of the Act and Rules, may attract imprisonment upto one year and fine from Rs.2,000/- to Rs. 5,000/- or both.
  • Contravention of the certain sections shall be punishable for first offence, with fine which may extend to Rs. 5000/-and for a second or subsequent offence, with fine which may extend to ten thousand rupees.

Conclusion

The Tamil Nadu Shops and Establishments Act, 1947 is a cornerstone legislation safeguarding the welfare and rights of employees outside the factory sector in Tamil Nadu. It ensures fair working conditions, reasonable working hours, leave entitlements, wage protection, workplace safety, and proper record maintenance.

For employers, compliance with this Act is not only a legal obligation but also critical to maintaining a transparent and employee-friendly work environment. For employees, the Act provides enforceable rights relating to job security, wages, holidays, and workplace health and safety.

The amendments in 2018 and 2023 reflect the government’s effort to modernize labor governance, bring in digital transparency, and adapt to the evolving nature of establishments, especially in the IT/ITeS sector.

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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