The Second National Commission on Labour (“Commission”), which submitted its report in June 2002 had first recommended the consolidation of 29 central labour laws. The changing nature of employment relationships, rapid industrialization, growth of the service sector, increasing formalisation of the economy, and the need to improve the ease of doing business necessitated overhaul of the existing labour laws framework. Accordingly, the Commission recommended consolidation and rationalization of labour laws to create a more coherent, transparent, and contemporary legal regime.

Accordingly, on November 21, 2025, the Ministry of Labour and Employment implemented 4 comprehensive labour codes (“Labour Codes”), i.e., the Code on Wages, 2019, Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”), sparking a complete overhaul of India’s existing labour law framework.

While the Labour Codes have consolidated 29 central labour laws to provide a unified legal framework to improve the ease of doing business in India, by reducing the number of statutory registers and replacing numerous registration requirements under various social security legislations and establishment specific legislations with a single registration, the Government’s claims of simplifying compliance and improving ease of doing business are still impeded by the numerous compliance requirements currently in effect at state level in India, primarily the state-level shops and establishments legislations.

Through this article, we analyse the role hitherto played by shops and establishment legislations in India and the viability of doing away with these acts altogether.

Shops and establishment legislation is presently in place in a majority of Indian states, with varying eligibility criteria, typically stipulating the registration requirements, weekly holidays and leaves, working hours, overtime, safety mechanisms for night-shift workers, employment of women, and numerous other aspects essential to the running of commercial establishments in India and further prescribe additional compliance requirements such as maintenance of statutory registers and other books / muster rolls, establishment registrations, filing of annual returns and display obligations.

However, the recently notified OSH Code has provisioned on each of the aforementioned issues, in an attempt to uniformise and simplify the compliance process for employers. This could lead to an overlap of compliances between the labour codes and shops and establishment legislations, which may further the compliance burden on employers instead of easing it, as originally intended.

The State government in Maharashtra, notified on April 30, 2026, that separate registration was no longer required in the state under the Maharashtra Shops and Establishments Act, 2017, provided that registration was obtained under the OSH Code [Circular No. OSH-2026/C.R. 40/Labour-10 dated 30 April 2026]. It was, however, also clarified that other provisions of the Maharashtra Shops and Establishments Act, 2017 will still need to be complied with, including intimating the facilitator within 60 days from commencing operations for establishments employing less than 10 persons. Similar notifications have also been made 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].

Another example being Bihar, where, on June 1, 2026, an ordinance was passed for the repeal of the Bihar Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2025 [Ordinance No. 01, 2026 dated June 1, 2026], aimed at reducing duplication of compliances and in a bid to attract investment and industrial activity into the state.

We expect numerous other states to follow suit by either repealing of their respective shops and establishments legislations or exempting establishments from complying with provisions which have been duplicated in the OSH Code.

Although labour is a concurrent subject on which both the Centre and the States actively legislate, Article 254 of the Indian Constitution clarifies that in case of conflict between central and state legislation on concurrent subjects, the central legislation will prevail.

Presently, the applicability of shops and establishment legislation across the workforce in different states varies, with States like Maharashtra explicitly excluding managerial, confidential and supervisory employees from the provisions of the Maharashtra Shops and Establishments Act, 2017; other States such as Gujarat do not make such an explicit distinction. Repealing of shops and establishment legislation and relying on the OSH Code and State rules notified thereunder will certainly help remove ambiguity across state borders regarding the applicability of labour laws to different categories of employees.

In conclusion, although we note that each State is in the best position to determine its own sensibilities, needs and priorities for labour laws, in light of the OSH Code being notified, shops and establishments legislations may have become antiquated and now largely duplicate the efforts and compliances for employers in India.

Accordingly, it would be beneficial for states to incorporate provisions not included in the OSH Code such as casual leave, sick leave and other provisions that are more beneficial to employees into the state-level rules under the OSH Code instead of having separate shops and establishment laws. This would enable states to preserve their autonomy and specific requirements, while reducing the compliance burden and duplication of employer efforts and will truly assist in easing the compliance burden.

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 author. The opinions presented do not necessarily reflect the views of Bar & Bench.

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