Whether the Mall activities comes under Shops & Establishment Act or Factories Act? - CiteHR
Dinesh Divekar
Business Mentor, Consultant And Trainer
Nathrao
Insolvency N Gst Professional
Korgaonkar K A
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Nagapranathib
Regional Manager - Hr & Admin

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Please give the confirmation about whether the Mall activities comes under Shops & Establishment Act or Factories Act.
Please send the copy of the same for Andhra Pradesh if possible.

Dear Nagapranathib,
Is mall not a shop on a grand scale? Therefore, it has to come under shop and establishment act. You have written that "Please send the copy of the same for Andhra Pradesh if possible". What copy you want? You may refer Shops and Establishment Act of Andhra Pradesh on your own.
Since you have raised query on "activities of mall", let me give clarification. Premises where selling activities take place and nothing else, can only come under the shops and establishment act. However, few malls sell grocery items like soaps, noodles, hand-wash, wheat floor etc under their brand name. This is called as private label. Few branded companies have their own production facilities where items of private label are produced. Facility where production takes place will come under Factories Act.
Thanks,
Dinesh Divekar

Dear HR colleague,
If you see the business activities at any Mall, it commonly consists of shops selling variety of articles and goods , eateries and cinema/ entertainment halls.
Under State Shops and Establishment Act/Rules , the Commercial Establishment is defined to include Shops ,residential hotel, eating house, theatre or places of public amusement.
Therefore, the activities of Mall will fall under the above broad categories and they are coverable under the respective State Shops Act and will be governed by provisions under each of them as applicable.
As no manufacturing activities generally are carried on in the Mall , Factories Act won't be applicable.
Vinayak Nagarkar
HR- Consultant

Dear Friends,
Malls fall under the S&E Act as rightly stated by our learned friends Dinesh Divekar ji & Vinayak Nagarkar ji.
But sometimes it happens that certain manufacturing activities are carried out in the Mall with the help of more than persons as required for factory. In this case, the provisions of Factory Act are made application to such unit in the Mall, e.g. Hotel.

Dear Mr KA Korgaonkar,
Thanks for clarification. As far as my observation about hotel industry is concerned, all the hotels are registered under shops and establishment act considering it to be "service" industry. Now going by your above mentioned post, should it not be registered under Factories Act as production of food very much takes place there?
Thanks,
Dinesh Divekar

Dear Dinesh ji,
This discussion made me to study deeply on the subject.
I remember reading that hotel industry is included under the Factory Act, however, there is no notification or amendment in the Act so far.
There is a specific exemption under the Factories Act 1948, under Section 2(m) to exclude Hotel from the applicability of that Act. Therefore, provisions of Factory Act do not apply to Hotels & Restaurants.
However, under the ESI Act, Hotels and Restaurants are considered as factory. Hon’ble Supreme Court, in the Civil Apeal No.1144-45 and 1147 - 1149 of 1952 and W.P.(c) was 9728 – 29 of 1983, has held that a hotel is a factory, as per the definition of the term under Section 2(12) of the Employees State Insurance Act, 1948. This definition of the term “factory” is the same as under Section 2(k) of the Factories Act 1948.

Dear Korgaonkarji,
Sec 2(14) ESIC act is interesting and gives clarity about manufacturing process.
https://yourstory.com/2013/01/when-d...-in-karnataka/
I feel Malls will fall under shops and establishment act only.

Yes Nathrao ji, Mall will fall under S&E Act only. There is no manufacturing activity is carried out in Mall.
My post # 4 gave different dimension to the discussion but from it definitely I got some learning.
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Dear KeshavJi,
Sec2(m) of ESIC act defines factory by saying it is as per Factories Act which again excludes Hotels.
So matter ends there and I have learnt about the complexities of many laws dealing with similar topics.
Thanks for enlightening us.

No Nathrao ji, you are wrong to understand here. Under ESI Act, Hotel is factory as I said in my post # 6 above.
Hon’ble Supreme Court, in the Civil Apeal No.1144-45 and 1147 - 1149 of 1952 and W.P.(c) was 9728 – 29 of 1983, has held that a hotel is a factory, as per the definition of the term under Section 2(12) of the Employees State Insurance Act, 1948.
Further, I would like to draw one more thing. As per Maharastra Factory Rules as amended now, the threshold no.of persons employed is increased to 20/40 but still under ESI Act the threshold is 10/20.

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