Umakanthan53
Labour Law & Hr Consultant

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Dear Team, I would like to know that whether Research & Development Unit shall register or not under Shops and establishment act, as we are doing only designing activities in this unit and remaining activities will be done at our factory premises. Pls help me out in this regard
From India, Hyderabad
In my opinion an R&D Unit cannot be either a shop or establishment as no sales or service to any customer nor any other commercial activity is carried on there. Therefore, the S&E Act will not be applicable to an R&D Unit.
From India, Salem
Dear Sir Then which act will be applicable for employees working in this R&D Centre for the payment of Salaries, leaves, Welfare, maternity etc. we have about 700 R&D associates working
From India, Hyderabad
Dear Rajugitam,
Thank you for your counter question. In fact the details of it made me doubtful about the validity and correctness of my previous reply and motivated me to make a thorough search in this regard to the best of my effort and ability.
After going through the Model Shops and Establishment ( Regulation of Employment and Conditions of Service ) Bill,2016, I am of the firm opinion that any R&D Unit of an organization which is situated independent of or away from the factory of such organization would be an "establishment" as per the definition of the term u/s 2(d) of the Model Bill. The definition of the term "worker" u/s 2(j) of the Bill coupled with its exemption clause from working hours provided u/s 8(5)(e) as follows would lend support to my opinion -
"Section 8(5)- The provisions of sub sections (1) and (2) shall, in relation to the following class of workers employed in such shops or establishment, apply only to such extent, and subject to such conditions, as may be prescribed, namely :- (e) Highly skilled workers ( such as workers working in the establishments of Information Technology, Bio-Technology and Research and Development Divisions )."
I am not sure whether your State has adopted the Model Bill and framed its own Rules.

From India, Salem
Dear Sir
Thank u very much for your information, and small issue to be added to the question, in this R&D Unit we are designing the products, to produce the product(proto type) in R&D some manufacturing process we are doing here like we are using workshop to do some fabrication activities, using power etc., Once we complete the prototype will send for real time testing and if it is proven then we will do the bulk production at factory. still will it comes under shops and establishment. kindly suggest.

From India, Hyderabad
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