The Second National Commission on Labour, which delivered its report in June 2002, initially proposed the amalgamation of 29 central labour laws. This recommendation emerged from the evolving employment dynamics, rapid industrial growth, expansion of the service sector, increasing economic formalization, and the necessity to enhance business facilitation. The Commission advocated for a unified and modern legal regime by consolidating and rationalizing labour laws. As a result, on November 21, 2025, the Ministry of Labour and Employment introduced four comprehensive labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code). This marked a significant reform in India’s labour law landscape.
Although the Labour Codes have unified 29 central laws to streamline business operations, the promise of simplifying compliance is hindered by various state-level compliance requirements, particularly through the shops and establishments legislations. This article examines the historical significance of these legislations and their relevance in the current legal framework.
Shops and Establishments Legislation: Historical Context
Predominantly present in most Indian states, shops and establishments legislation typically outlines registration prerequisites, weekly holidays, working hours, overtime, safety for night-shift workers, and guidelines for employing women, among other operational aspects. Additionally, they impose compliance obligations such as maintaining statutory registers, establishment registrations, and filing annual returns.
The recently enforced OSH Code addresses many of these subjects, aiming to standardize and ease the compliance process for employers. However, this could lead to overlapping compliances between the Labour Codes and the traditional shops and establishments legislations, potentially increasing the compliance burden on employers instead of alleviating it.
State-Level Adaptations and Notifications
In a move towards simplification, the Maharashtra government announced on April 30, 2026, that separate registrations under the Maharashtra Shops and Establishments Act, 2017, would not be required if registration under the OSH Code was obtained [Circular No. OSH-2026/C.R. 40/Labour-10 dated 30 April 2026]. However, compliance with other provisions of the Maharashtra Shops and Establishments Act remained necessary, including notifying the facilitator within 60 days of operation commencement for establishments with fewer than 10 employees. Similar adaptations have been observed in Haryana [Notification No. 02/26/2026-2Lab dated May 4, 2026] and Pondicherry [Notification No. G.o.Ms. No. 3 dated March 15, 2026].
Furthermore, Bihar passed an ordinance on June 1, 2026, repealing the Bihar Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2025 [Ordinance No. 01, 2026 dated June 1, 2026], aiming to reduce compliance duplication and stimulate investment and industrial activity.
Interplay Between Central and State Legislation
While labour is a concurrent subject allowing both the Centre and States to legislate, Article 254 of the Indian Constitution asserts that central legislation prevails in cases of conflict. The applicability of shops and establishments legislation varies across states. For instance, Maharashtra’s legislation excludes managerial and supervisory employees, unlike Gujarat. Repealing such legislation and relying on the OSH Code could reduce ambiguities across state borders regarding labour law applicability.
Conclusion
In conclusion, although states are best positioned to decide their labour law priorities, the notification of the OSH Code may render shops and establishments legislations redundant, primarily duplicating compliance efforts for employers. Thus, states might benefit from integrating provisions not covered by the OSH Code, such as casual and sick leave, into state-level rules under the OSH Code. This would preserve state autonomy while reducing compliance burdens, ultimately promoting ease of doing business.
About the authors: Parag Bhide is a Partner, Mohammad Aqib Gulzari is a Senior Associate, and Shaam Thelapilly is an Associate at AQUILAW.
Disclaimer: The opinions expressed in this article are those of the authors and do not necessarily reflect the views of Bar & Bench.
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