The KARNATAKA SHOPS AND COMMERCIAL ESTABLISHMENTS ACT, 1961

THE KARNATAKA SHOPS AND COMMERCIAL ESTABLISHMENTS 
ACT, 1961  
ARRANGEMENT OF SECTIONS  
Statement of Objects and Reasons 
Sections :  
CHAPTER I  
PRELIMINARY  
 1. Short title, extent, commencement and application.  
 2. Definitions.  
 3. Exemptions.  
CHAPTER II  
REGISTRATION OF ESTABLISHMENTS  
 4. Registration of Establishments.  
 5. Change to be communicated to Inspector.  
 6. Closing of establishment to be communicated to Inspector.  
 6A.Issue of appointment orders.  
CHAPTER III  
HOURS OF WORK  
 7. Daily and weekly hours.  
 8. Extra wages for overtime work.  
 9. Interval for rest.  
 10.Spread over.  
 11. Opening and closing hours.  
 12. Weekly holidays.  
 13. Selling outside establishment prohibited after closing hours.  
CHAPTER IV  
ANNUAL LEAVE WITH WAGES  
 14. Application of chapter.  
 15. Annual leave with wages.  
 16. Wages during leave period.  
 17. Payment of advance in certain cases.  
 18. Mode of recovery of unpaid wages.  
 19. Power to make rules.  
 20. Power to exempt establishments.  
 2
CHAPTER V  
WAGES AND COMPENSATION  
 21. Application of the Payment of Wages Act.  
 22. Application of the Workmen’s Compensation Act.  
 23. Omitted.  
CHAPTER VI  
EMPLOYMENT OF CHILDREN AND WOMEN  
 24. Prohibition of employment of children.  
 25. Prohibition of employment of women and young persons during night.  
CHAPTER VII  
ENFORCEMENT AND INSPECTION  
 26. Inspectors.  
 27. Powers and duties of Inspectors.  
 28. Inspectors to be public servants .  
 29. Employer to produce registers, records, etc., for inspection.  
CHAPTER VIII  
OFFENCES, PENALTIES AND PROCEDURE  
 30. Penalties.  
 31. Procedure.  
 32. Limitation of prosecutions.  
 33. Penalty for obstructing Inspectors, etc.  
33A.Compounding of offences. 
CHAPTER IX  
MISCELLANEOUS  
 34. Maintenance of registers and records and display of notices.  
 35. Saving of certain rights and privileges.  
 36. Indemnity.  
 37. Delegation of powers.  
 38. Power of Government to suspend provisions of the Act during fairs and 
festivals.  
 39. Notice of dismissal.  
 40. Power to make rules.  
 41. Notifications and Rules to be laid before the State Legislature.  
 42. Repeal and savings.  
 43. Repeal of Central Act XVIII of 1942.  
 44. Power to removal of difficulties.  
SCHEDULE  
 * * * *  
  
 3
 
STATEMENT OF OBJECTS AND REASONS 
I  
Act 8 of 1962.- At present the Madras Shops and Establishments Act, 
1947, is in force in Madras area. The Mysore Shops and Establishments 
Act, 1948, is in force in the Mysore area. The Hyderabad Shops and 
Establishments Act, 1957, is in force in Hyderabad area and the Bombay 
Shops and Establishments Act, 1948, is in force in the Bombay area. It is 
considered expedient to have a uniform law in the State of Mysore for the 
regulation of the terms and conditions of work and employment in shops and 
commercial establishments. The Government of India had circulated a Draft 
Bill for consideration of State Governments to initiate legislation on similar 
lines where necessary. Both these objects will be served by enacting 
legislation on the lines of this Bill.  
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A dated 
12th February 1959 as No.2653 at page. 32.)  
 
II  
 
Amending Act 36 of 1966.—According to sub-section (2) of section 39 
of the Act, all appeals by employees removed or dismissed from service lie 
to the prescribed authority or if no authority is prescribed, to the 
Commissioner of Labour. This means that only one appellate authority for 
the entire State has to deal with the appeals involving much difficulty and 
inconvenience to all persons concerned. It is considered necessary to 
amend the Act to provide for appeals to different authorities in different 
places depending on the area from which the appeal arises and the class or 
category to which an establishment belongs. It is also considered necessary 
to provide for the transfer of appeals under section 39 (2) pending before 
the Commissioner of Labour to the appropriate appellate authority.  
 Hence this Bill.  
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A, dated 
22nd November 1966 as No. 193 at page. 4.)  
 
III  
 
Amending Act 4 of 1969. —It is proposed to provide for supervision of 
the work of Labour Inspectors who are appointed as Inspectors under the 
Mysore Shops and Commercial Establishments Act, 1961, by the Assistant 
Labour Commissioners and the Labour Officers. This cannot be done unless 
 4
the Assistant Labour Commissioners and Labour Officers are also made 
Inspectors under the said Act. There is no provision for the appointment of 
the Additional Inspector under the Act, and it is proposed to provide for such 
appointments.  
 The Mysore Maternity Benefit Act 1959 has been repealed and the 
Maternity Benefit Act 1961 (Central Act 53 of 1961) has been brought into 
force. It is therefore necessary to amend Chapter V of the Act suitably.  
 Hence the Bill.  
 (Obtained from file LAW 81 LGN 67.)  
 
IV  
 
Amending Act 33 of 1982.—In his Budget speech for the year 1982–83 
the Finance Minister indicated that in the interest of revenue and for better 
enforcement of the provision of the Act annual renewal of the registration of 
shops and commercial establishments would be provided under the 
Karnataka Shops and Commercial Establishments Act, 1961. The provision 
for renewal also facilitates maintenance of up-to date statistics of such 
establishments and would also result in better conditions of service for the 
employees.  
 Hence the Bill.  
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A, dated 
26th July 1982 as No. 588 at page. 4.)  
 
V  
 
Amending Act 17 of 1986.—The Food Corporation of India is a key 
Organisation in the food grains distribution programme in the State.  
 The establishments of the said Corporation are exempted from the 
provisions of the enactments similar to that of the Karnataka Shops and 
Commercial Establishments Act, 1961 in many of the States/Union 
territories in India.  
 It is considered, therefore, necessary to exempt this Organisation from 
the provisions of the Karnataka Shops and Commercial Establishments Act, 
1961, as is done in the case of Postal, Telegraphic or Telephone Service 
etc., and organisations which supply power, light or water etc., to the public.  
 Hence the Bill.  
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A, dated 
21st February 1986 as No. 134 at page. 3.)  
 5
VI  
Amending Act 25 of 1997.—It is proposed to amend the Karnataka 
Shops and Commercial Establishments Act, 1961, to provide for:—  
 1962: KAR. ACT 8] Shops and Commercial Establishments 5  
(1) enhancing age limit of a child from 12 to 14 years, in definition of 
‘child’.  
 (2) renewal of registration certificate once in five years instead of every 
year;  
 (3) compulsory issue of appointment  orders by the employers to the 
employees in writing indicating the name, designation and terms of 
conditions etc., of appointment within thirty days from the date of 
appointment in his establishment, by insertion of new section 6A.  
 (4) enhancing the age limit from 12 to 14 and 15 to 18 in relation to 
hours of work of young persons.  
 (5) fixing of weekly holidays within 30 days from the date of 
commencement of new establishment.  
 (6) removal of minimum period of 240 days or more of work, to get 
entitled for leave with wages and certain other consequential amendments.  
 (7) enhancing the age limit from 12 to 14 and 15 to 18 for the purpose of 
prohibition of employment of young persons.  
 (8) separate enhanced punishment for employment of Children.  
 (9) removal of the maximum limit of six months pay as compensation 
payable by the employer to an employee who is removed or dismissed 
without reasonable cause of proof of misconduct.  
 (10) enhancement of punishments of certain offence.—  
 Hence the Bill.  
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A, dated 
21st February 1997 as No. 245 at page. 13.)  
VII  
Amending Act 11 of 2001.- The nature of work in information 
Technology establishments and Information Technology enabling services 
or Establishments; Bio-Technology and Research Centres of establishments 
of epidemic and other diseases, is such that it requires flexibility in terms of 
working hours as their work entails lot of metal work in terms of fault finding, 
imagination and reflection and design. So much so no time can be setout 
with regard to their working hours and even weekly holiday, except 
assigning task to be accomplished.  
 Therefore, it is considered necessary to amend the Karnataka Shops 
and Commercial Establishments Act, 1961 to give partial exemption 
 6
regarding opening and closing hours and weekly holiday so as to provide 
flexi time.  
 Hence the Bill.  
 (Vide L.A. Bill No. 2 of 2001 File No. SAMVYASHAE 20 SHASANA 
2000)  
 
VIII  
 
Amending Act 14 of 2002.- Section 25 of the Karnataka Shops and 
Commercial Establishments Act, 1961 prohibits employment of women and 
young persons during night. Establishments of Information Technology or 
Information Technology enabled service. develop software for foreign 
customers. The personnel in these establishments often work late in the 
night. The Personnel have to interact with their customers late in evenings 
or throughout the night depending upon the global part of the Country. 
These establishments employ good number of women workers. As section 
25 prohibits emplotment of women during night it has affected working of the 
establishments. Software development is  usually entrusted to a team which 
may also include women employees.  
 Therefore, in order to utilise the Services of women employees during 
night it is considered necessary to amend section 25 to empower the State 
Government to exempt any establis hment of Information Technology or 
Information Technology enabled services from the provisions of that section 
relating to employment of women during night subject to the condition that 
the establishments provides facilities of transportation and security to such 
women employees.  
 Hence the Bill.  
 (Vide L.A. Bill No. 16 of 2002 File No. SAMVYASHAE 28 SHASANA 
2001 DT: 30.8.2002)  
 
IX  
Amending Act 28 of 2005.- To avoid undue hardship to the owners of 
the shops and commercial establishments, in registering their 
establishments and also in renewal of their registration certificates it is 
proposed to amend section 4 of the Shops and Commercial Establishments 
Act, 1961 and to provide for deemed registration or renewal of registration 
certificate, in case the area Labour Inspector does not register or renew or 
fails to communicate the grounds on which registratiion/renewal was not 
done within thirty days from the date of receipt of such applications.  
 7
Provision is also made to impose penalty for false claim of the 
benefit of deemed registration with an imprisonment of not less than six 
months and with a fine which may extend to five thousand rupees.  
Hence, the Bill.  
(LA Bill No.15 of 2005)  
X 
Amending Act 12 of 2007.-  The provisions of the Karnataka Shops 
and Commercial Establishments Act, 1961, provides only for penalty by way 
of fine or imprisonment and there is no provision for compounding of 
offences departmentally.  Hence, it is concerned necessary to provide for 
composition of offences under the Karnataka Shops and Commercial 
Establishments Act, 1961 in order to reduce litigation and facilitate speedy 
recovery of dues. 
 Hence the Bill. 
 [L.A.Bill No.15 of 2007] 
[Entry 24 of List III of the Seventh Schedule to the Constitution of India.] 
 
 
* * * * *
 8
1[KARNATAKA ACT]1 No. 8 OF 1962 
(First published in the 1[Karnataka Gazette]1 on the First day of March, 
1962.)  
THE 1[KARNATAKA]1 SHOPS AND COMMERCIAL ESTABLISHMENTS 
ACT, 1961.  
(Received the assent of the President on the Fifteenth day of February, 
1962.)  
(As amended by Acts 36 of 1966, 4 of 1969, 33 of 1982, 17 of 1986 , 25 of 
1997,  11 of 2001, 14 of 2002, 28 of 2005 and 12 of 2007)  
An Act to provide for the regulation of conditions of work and employment 
in shops and commercial establishments.  
WHEREAS it is expedient to provide for the regulation of conditions of 
work and employment in shops and commercial establishments and other 
incidental matters;  
BE it enacted by the 1[Karnataka State]1 Legislature in the Twelfth Year 
of the Republic of India as follows:—  
1. Adopted by the Karnataka adaptations of laws order 1973 w.e.f. 1.11.1973  
CHAPTER I  
PRELIMINARY  
1. Short title, extent, commencement and application.— (1) This Act 
may be called the 1[Karnataka]1 Shops and Commercial Establishments Act, 
1961.  
1. Adopted by the Karnataka adaptations of laws order 1973 w.e.f. 1.11.1973  
(2) It extends to the whole of the 1[State of Karnataka]1.  
1. Adopted by the Karnataka adaptations of laws order 1973 w.e.f. 1.11.1973  
(3) It shall come into force on such 1[date]1 as the State Government may 
by notification appoint.  
1. Act came into force w.e.f. 1.10.1964 by notification. Text of notification is at the end of the Act.  
 (4) (a ) It shall apply, in the first instance, to the areas specified in the 
Schedule to this Act, and to such other areas in which any of the Acts 
repealed by section 42 applied.  
(b) It shall apply to any other area with effect from such date as the State 
Government may by notification specify which date shall not be earlier than 
 9
the expiry of three months from the date of publication of such notification in 
the official Gazette.  
2. Definitions.—In this Act, unless the context otherwise requires,—  
(a) “adult” means a person who has completed his eighteenth year;  
(b) “apprentice” means a person aged not less than 1[fourteen years] 1, 
who is employed whether on payment of wages or not for the purpose of 
being trained in any trade, craft or employment in any establishment;  
1. Substituted by Act 25 of 1997 w.e.f. 12.2.1998 by notif ication. Text of notification is at 
the end of the Act.  
1[(ba) ‘banking company’ means,—  
1. Sub clause (i) to (vi) inserted by act 33 of 1982 w.e.f. 4.12.1982 by not ification. Text of 
notification is at the end of the Act.  
(i) the Reserve Bank of India;  
(ii) the Banking Company as defined under the Banking Regulations, Act, 
1949;  
(iii) the State Bank of India constituted under the State Bank of India Act, 
1955;  
(iv) a Subsidiary Bank as defined in the State Bank of India (Subsidiary 
Banks) Act, 1959;  
(v) a corresponding new bank constituted under the Banking Companies 
(Acquisition and Transfer of Undertakings) Act, 1970;  
(vi) a corresponding new bank constituted under the Banking Companies 
(Acquisition and Transfer of Undertakings) Act, 1980.]1  
(c) “child” means a person who has not completed his 1[fourteenth year]1;  
1. Substituted by Act 25 of 1997 w.e.f. 12.2.1998. 
(d) “closed” means not open for the service of any customer or for any 
business connected with the establishment;  
(e) “commercial establishment” means a commercial or trading or 
banking or insurance establishment, an establishment or administrative 
service in which persons employed are mainly engaged in office work, a 
hotel, restaurant, boarding or eating house, a cafe or any other refreshment 
house, a theatre or any other place of public amusement or entertainment 
and includes such establishments as the State Government may by 
notification declare to be a commercial establishment for the purposes of 
this Act;  
 10
(f) “day” means a period of twenty-four hours beginning at midnight:  
Provided that in the case of an employee whose hours of work extend 
beyond midnight, “day” means a period of twenty-four hours beginning from 
the time when such employment commences irrespective of midnight;  
(g) “employee” means a person wholly or principally employed in or in 
connection with, any establishment whether working on permanent, 
periodical, contract or piece-rate wages, or on commission basis, even 
though he receives no reward for his labour and includes an apprentice, any 
clerical or other member of the staff of a factory or industrial establishment 
who falls outside the scope of the Factories Act, 1948, but does not include 
a member of the employer’s family; and “employed” shall be construed 
accordingly;  
(h) “employer” means a person having charge of or owning or having 
ultimate control over the affairs of an establishment and includes members 
of the family of an employer, a manager , agent or other person acting in the 
general management or control of an establishment;  
(i) “establishment” means a shop or a commercial establishment;  
(j) “family” in relation to an employer means the husband or wife, son, 
daughter, father, mother, brother or sister of such employer who lives with 
and is dependent on him;  
(k) “Inspector” means an Inspector appointed under section 26 and 
includes the Chief Inspector and an Assistant Inspector;  
(l) “leave” means leave provided for in Chapter IV of this Act;  
Shops and Commercial Establishments [1962: KAR. ACT 8 10  
    (m) “night” means a period of at least twelve consecutive hours which 
shall include the interval between 8 P.M. and 6 A.M.;  
 (n) “notification” means a notification published in the official Gazette;  
(o) “opened” means opened for the service of any customer or for any 
business, connected with the establishment;  
(p) “period of work” means the time during which an employee is at the 
disposal of the employer;  
(q) “prescribed” means prescribed by rules made under this Act;  
1[(r) x x x]1  
1. Omitted by Act 36 of 1966 w.e.f. 25.4.1969 by notification. Text of not ification is at the 
end of the Act.  
 11
(s) “register of establishments” means a register maintained for the 
registration of establishments under this Act;  
(t) “registration certificate” means a certificate showing the registration of 
an establishment;  
(u) “shop” means any premises where any trade or business is carried on 
or where services are rendered to customers, and includes offices, 
storerooms, godowns, or warehouses, whether in the same premises or 
otherwise, used in connection with such trade or business, but does not 
include a commercial establishment or a shop attached to a factory where 
the persons employed in the shop fall within the scope of the Factories Act, 
1948;  
(v) “spread over” means the period between the commencement and the 
termination of the work of an employee on any day;  
(w) “wages” shall have the meaning assigned to it in the Payment of 
Wages Act, 1936 (Central Act IV of 1936);  
(x) “week” means a period of seven days beginning at midnight of 
Saturday or such other night as may be approved in writing for a particular 
area by the prescribed authority;  
(y) “year” means the year commencing on the first day of January;  
(z) “young person” means a person who is not a child and who has not 
completed his eighteenth year.  
3. Exemptions.—(1) Nothing in this Act shall apply to,-  
(a) offices of or under the Central or State Governments or local 
authorities, except commercial undertakings;  
(b) any railway service, water transport service, postal, telegraph or 
telephone service, any system of public  conservancy or sanitation or any 
industry, business or undertaking which supplies power, light or water to the 
public;  
(c) railway dining cars;  
(d) establishments for the treatment or care of the sick, infirm, or the 
mentally unfit;  
1[(dd) establishments of the Food Corporation of India;]1  
1. Inserted by Act 17 of 1986 w.e.f. 8.5.1986. 
 12
(e) offices of legal practitioners and medical practitioners in which not 
more than three persons are employed;  
(f) offices of 1[a banking company]1;  
1. Substituted by Act 33 of 1982 w.e.f. 4.12.1982. 
(g) any person employed about the business of any establishment 
mentioned in clauses (a) to (f) aforesaid;  
(h) persons occupying positions of management in any establishment;  
(i) persons whose work is inherently intermittent such as drivers, care-
takers, watch and ward staff, or canvassers; and  
(j) persons directly engaged in preparatory or complementary work, such 
as, clearing and forwarding clerks responsible for the despatch of goods.  
(2) Nothing contained in section 11 or sub-section (1) of section 12 shall 
apply to,-  
(a) shops dealing mainly in medicines or medical or surgical requisites or 
appliances;  
(b) clubs, residential hotels, boarding houses, hostels attached to schools 
or colleges, and establishments maintained in boarding schools in 
connection with the boarding and lodging of pupils and resident-masters;  
Explanation.—“residential hotel” means any premises in which business 
is carried on bona fide for the supply of dwelling accommodation and meals 
on payment of a sum of money to a trav eller or any member of the public or 
class of the public.  
(c) stalls and refreshment rooms at railway stations, bus stands, ports or  
aerodromes;  
     (d) shops of barbers and hairdressers;  
(e) shops dealing mainly in meat, fish, poultry, eggs, dairy produce 
(except ghee), bread, confectionery, sweets, chocolates, ice, ice cream, 
cooked food, fruits, flowers, vegetables or green fodder;  
(f) shops dealing in articles required for funerals, burials or cremations;  
(g) shops dealing in pan (betel leaf), pan with beedies or cigarettes, or 
liquid refreshments sold retail for consumption on the premises;  
(h) shops dealing in newspapers or periodicals, editing sections of 
newspaper offices and offices of news agencies;  
 13
(i) cinemas, theatres and other places of public entertainment and stalls 
and refreshment rooms attached to such cinemas, theatres and places of 
public entertainment;  
(j) establishments for the retail sale of petrol;  
(k) shops in regimental institutes, garrison shops and troop canteens in 
cantonments;  
(l) tanneries;  
(m) retail trade carried on at an exhibition or show, if such retail trade is 
subsidiary or ancillary only to the main purpose of the exhibition or show;  
(n) oil-mills and flour-mills not registered under the Factories Act, 1948;  
(o) brick and lime kilns;  
(p) commercial establishments engaged in the manufacture of bronze 
and brass utensils so far as it is confined to the process of melting in 
furnaces.  
1[(q) Information Technology Establishments;  
(r) Information Technology enabling services or establishments;  
(s) Bio-Technology and Research Centres or establishments of epidemic 
and other diseases.]1  
1. Inserted by Act 11 of 2001 w.e.f. 1.6.2001 by notification. Text of notification is at the 
end of the Act.  
(3) Notwithstanding anything contained in sub-section (1) or sub-section 
(2), the State Government may by notification declare that any 
establishment or person specified therein shall not be exempt from the 
operation of such provisions of this Act as may be specified in the 
notification and that the provisions of this Act specified in such notification 
shall apply to such establishment or person.  
(4) The State Government may by notification exempt establishments 
where the nature of work is,-  
(i) intermittent, or  
(ii) seasonal, or  
(iii) for a short duration, not exceeding two months, and it is difficult 
to enforce the provisions of this Act,  
-from all or any of the provisions of this Act subject to such conditions as 
may be specified in the notification.  
 14
CHAPTER II  
REGISTRATION OF ESTABLISHMENTS  
4. Registration of Establishments.—(1) Within the period specified in 
sub-section (3), the employer of every establishment shall send to the 
Inspector of the area concerned, a statement in the prescribed form together 
with such fees as may be prescribed, containing,—  
(a) the name of the employer and the manager, if any;  
(b) the postal address of the establishment;  
(c) the name, if any, of the establishment; and  
(d) such other particulars as may be prescribed.  
(2) On receipt of the statement and the fees, the Inspector shall, on being 
satisfied about the correctness of the statement, register the establishment 
in the register of establishments in such manner as may be prescribed, and 
shall issue, in a prescribed form, a registration certificate to the employer. 
The registration certificate shall be prominently displayed at the 
establishment.  
(3) Within thirty days from the date mentioned in column (2) below in 
respect of an establishment mentioned in column (1), the statement together 
with fees shall be sent to the Inspector under sub-section (1).  
Establishments. Date from which the period of thirty 
days to commence. 
(1) (2) 
(i)  Establishment 
existing on the 
date on which 
this Act comes 
into force.  
(i)  The date on 
which this Act  
comes Into 
force.  
(ii)  New 
establishments.  
(ii)  The date on 
which the 
establishment 
commences its 
work.  
 
1[(3A) In case the Inspector is not satisfied about the correctness of the 
statement together with fees under sub-section (3) shall within thirty days 
from the date of receipt of the same communicate to the employer his 
 15
decision for refusing to register the establishment with the reasons therefor, 
failing which the establishment shall be deemed to have been registered.]1  
1. Sub-section (3A) inserted by Act 28 of 2005 by notification. The Act is yet to be brought 
into force.  
1[(4) A registration certificate issued under sub-section (2), shall be valid 
for 2[five years] 2 and shall be renewed 2[before the expiry of the period of 
registration certificate] 2 on payment of such fees and in such manner as 
may be prescribed.  
1. Sub-sections 4 and 5 inserted by Act 33 of 1982 w.e.f. 4.12.1982.  
2. Substituted by Act 25 of 1997 w.e.f. 12.2.1998.  
1[(5) The registration certificate issued or renewed before the 
commencement of the Karnataka Shops and Commercial Establishments 
(Amendment) Act, 1997 shall, on such commencement, continue to be valid 
till the expiry of the period of registration certificate already granted and the 
employer of every such establishment shall renew his registration certificate 
before the expiry of such period in accordance with sub-section (4).]
1]1  
         1. Substituted by Act 25 of 1997 w.e.f. 12.2.1998. 
1[(6) In case the Inspector is not satisfied about the correctness of the 
statement or the renewal application or  the payment fee prescribed or any 
other condition of renewal shall within thirty days from the date of receipt of 
statement together with fees from the employer seeking renewal of 
registration certificate communicate to the employer his decision for refusing 
to renew the registration with the reasons therefor, failing which the 
registration certificate shall be deemed to have been renewed.  
(7) In case the certificate of registration or renewal of registration is not 
received by any employer within the per iod specified in sub-section (3A) or 
(6), the employer shall display a self-certification statement sent by 
Registered Post with Acknowledgement Due to the Registering Authority for 
registration or renewal, as the case may be, along with the 
acknowledgement to that effect stating that he has got the deemed benefit. 
In case the certificate of registration or renewal of registration as the case 
may be, is received by the employer subsequently, such self certification 
shall be replaced with a regular certificate as soon as the same is received.  
(8) If any employer has falsely claimed the benefit of deemed registration 
and has displayed such self certificate under sub-section (7), he shall on 
conviction be punished with an imprisonment of not less than six months 
and with a fine which may extend to five thousand rupees]1  
1. Sub-sections (6) (7)& (8) inserted by Act 28 of 2005 by notification. The Act is yet to be 
brought into force.  
 16
5. Change to be communicated to Inspector. —It shall be the duty of 
an employer to notify to the Inspector, in the prescribed form, any change in 
respect of any information contained in his statement under section 4, within 
fifteen days after the change has taken place. The Inspector shall, on 
receiving such notice and on being satisfied about its correctness, make the 
change in the register of establishments and shall amend the registration 
certificate or issue a fresh registration certificate, if necessary.  
6. Closing of establishment to be communicated to Inspector. —The 
employer shall, within fifteen days of his closing the establishment, notify to 
the Inspector in writing the date of such closure and return the registration 
certificate. The Inspector shall, on receiving the information and being 
satisfied about its correctness, remove such establishment from the register 
of establishments and cancel the registration certificate:  
Provided that if the Inspector does not receive the information, but is 
otherwise satisfied that the establishment has been closed, he may remove 
such establishment from such register.  
1[6A. Issue of appointment orders. —Every employer, employing any 
person in or in connection with his establishment, shall issue an 
appointment order in writing indicating the name, designation, wage scale of 
such person and terms and conditions of his employment and serve the 
same on such person within thirty days from the date of appointment in his 
establishment:  
1. Inserted by Act 25 of 1997 w.e.f. 12.2.1998. 
Provided that in case of employees appointed in any establishment prior 
to the commencement of the Karnataka Shops and Commercial 
Establishments (Amendment) Act, 1997, the employer of such 
establishment shall, if he has not yet issued any appointment order in writing 
to such employee, communicate in wr iting to the employee incorporating 
therein his name, designation and wage scale and the terms and conditions 
of employment and serve the same on hi m within thirty days from the date 
of such commencement.]
1  
CHAPTER III  
HOURS OF WORK  
7. Daily and weekly hours. —(1) No employee in any establishment 
shall be required or allowed to work for more than nine hours on any day 
and forty-eight hours in any week:  
 17
Provided that the total number of hours of work including overtime shall 
not exceed ten hours in any day ex cept on days of stock-taking and 
preparation of accounts:  
Provided further that the total number of overtime hours worked by an 
employee does not exceed fifty in a period of three continuous months.  
 (2) No young person 1[x x x] 1 shall be allowed to work in any 
establishment for more than five hours in a day.  
1. Omitted by Act 25 of 1997 w.e.f. 12.2.1998. 
8. Extra wages for overtime work. —(1) Where an employee works in 
any establishment for more than nine hours in any day or for more than 
forty-eight hours in any week he shall in respect of such overtime work be 
entitled to wages at twice the rate of normal wages.  
(2) For the purposes of this section “normal wages” means the basic 
wages plus such allowances, including the cash equivalent of the advantage 
accruing through the concessional sale to workers of food grains and other 
articles, as the worker is for the time being entitled to, but does not include a 
bonus.  
(3) The cash equivalent of the advantage accruing through the 
concessional sale to a worker of food grains and other articles shall be 
computed as often as may be prescribed on the basis of the maximum 
quantity of food grains and other articles admissible to a standard family.  
Explanation 1 .—“standard family” means a family consisting of an 
employee, his or her spouse and two children below the age of fourteen 
years requiring in all three adult consumption units.  
Explanation 2.—“adult consumption unit” means the consumption unit of 
a male above the age of fourteen years; and the consumption unit of a 
female above the age of fourteen years and that of a child below the age of 
fourteen years shall be calculated at the rates of .8 and .6 respectively of 
one adult consumption unit.  
(4) The State Government may make rules prescribing,-  
(a) the manner in which the cash equivalent of the advantage accruing 
through the concessional sale to a worker of food grains and other 
articles shall be computed;  
(b) the registers that shall be maintained in an establishment for the 
purpose of securing compliance with the provisions of this section.  
 18
9. Interval for rest. —The periods of work of an employee in an 
establishment each day shall be so fixed that no period shall exceed five  
Shops and Commercial Establishments [1962: KAR. ACT 8 18  
hours and that no such person shall work for more than five hours before 
he has had an interval of rest of at least one hour.  
10. Spreadover.—The periods of work of an employee in an 
establishment shall be so fixed that, inclusive of his interval for rest, they 
shall not spreadover more than twelve hours in any day.  
11. Opening and closing hours. —(1) No establishment shall on any 
day, be opened earlier than and closed later than such hours as may be 
fixed by a notification issued by the State Government:  
Provided that any customer who was being served or was waiting to be 
served in any establishment at the hour fixed for its closing may be served 
during the quarter of an hour immediately following such hour.  
(2) Before issuing a notification under sub-section (1), the State 
Government shall hold an enquiry in the prescribed manner.  
(3) The State Government may, for the purpose of this section, fix 
different hours for different establishments or different classes of 
establishments or for different areas or for different times of the year.  
12. Weekly Holidays.—(1) Every establishment shall remain closed for 
one day of the week. The employer shall fix such date at the beginning of 
the year, 1[or within thirty days from the date of commencement of 
establishments, as the case may be]1 notify it to the Inspector and specify it 
in a notice prominently displayed in a conspicuous place in the 
establishment. The employer shall not alter such date more often than once 
in three months, shall notify the alteration to the Inspector, and shall make 
the necessary change in the notice in the establishment.  
1. Inserted by Act 25 of 1997 w.e.f. 12.2.1998. 
(2) Notwithstanding anything contained in sub-section (1), the State 
Government may allow an establishment to remain open throughout the 
week if it is satisfied that the establishment employs additional staff for 
meeting the requirements of sub-section (3) of this section.  
(3) Every employee in an establishment shall be given at least one whole 
day in a week as a holiday for rest:  
Provided that in establishments in which rest for one-and-a-half days in a 
week is allowed, such period of rest shall be continued.  
 19
 (4) It shall not be lawful for an employer to call an employee at, or for an 
employee to go to, his establishment or any other place for any work in 
connection with the business of his establishment on a weekly holiday given 
to the employee under sub-section (3) or on a day on which such 
establishment remains closed.  
(5) No deduction shall be made from the wages of an employee in any 
establishment on account of the holiday given to him under sub-section (3). 
If any employee is employed on daily  wages, he shall nonetheless be paid 
his wages for the weekly holiday.  
13. Selling outside establishments prohibited after closing hours. —
Save as provided by or under any other enactment for the time being in 
force, no person shall carry on, in or adjacent to a street or public place, the 
sale of any goods after the hour fixed under section 11 for the closing of 
establishments dealing in the same class of goods in the locality in which 
such street or public place is situated:  
Provided that nothing in this section shall apply to the sale of newspapers 
and such other articles as may be exempted by notification by the State 
Government.  
CHAPTER IV  
ANNUAL LEAVE WITH WAGES  
14. Application of Chapter. —The provisions of this Chapter shall not 
operate to the prejudice of any rights to which an employee may be entitled 
under any other law or under the terms of any award, agreement or contract 
of service:  
Provided that where such award, agreement or contract of service 
provides for a longer leave with wages  or weekly holidays than are provided 
in this Chapter, the employee shall be entitled to only such longer leave or 
weekly holidays, as the case may be.  
15. Annual leave with wages. —1[(1) Every employee in an 
establishment shall be entitled to leave with wages and shall be allowed to 
avail such leave for the number of days calculated at the rate of,-  
(i)   one day for every twenty days work performed by him, in case of 
an adult;  
(ii)  one day for every fifteen days of work performed by him, in case 
of a young person;  
Explanation: For the purpose of this sub-section,—  
 20
(a) any day of lay-off, by agreement or contract as permissible under the 
standing order or for any other reasons beyond the employer’s 
control;  
(b) in the case of female employee, maternity leave for any number of 
days not exceeding twelve weeks; and  
(c) the leave earned in the year prior to that in which the leave is 
enjoyed:  
-shall be deemed to be days on which the employee has worked in an 
establishment for the purposes of computation of leave under this section, 
but the employee shall not earn leave for that period.]1  
1. Substituted by Act 25 of 1997 w.e.f. 12.2.1998. 
1[(2) x x x]1  
1. Omitted by Act 25 of 1997 w.e.f. 12.2.1998. 
(3) Every employee shall also be entitled during the first twelve months of 
continuous service and during every subsequent twelve months of such 
service in any establishment to leav e with wages for a period not exceeding 
twelve days, on the ground of any sickness incurred or accident sustained 
by him or for any other reasonable cause.  
(4) If an employee is discharged or di smissed from service during the 
course of the year he shall be entitled to leave with wages at the rates laid 
down in sub-section (1) even if he has not worked for the entire period 
specified in sub-section (1) 1[x x x]1 entitling him to earn leave.  
1. Omitted by Act 25 of 1997 w.e.f. 12.2.1998. 
(5) If an employee entitled to any leave under sub-section (3) is 
discharged or dismissed from service when he is sick or suffering from the 
result of an accident, the employer shall pay him the amount payable under 
this Act in respect of the period of the leave to which he was entitled at the 
time of his discharge or dismissal, in addition to the amount, if any, payable 
to him under sub-section (4).  
 (6) In calculating leave under this section, fraction of leave of half a day 
or more shall be treated as one full day’s leave, an fraction of less than half 
a day shall be omitted.  
(7) If an employee does not in any one calendar year take the whole of 
the leave allowed to him under sub-section (1) or sub-section (2), as the 
case may be, any leave not taken by him shall be added to the leave to be 
allowed to him in the succeeding calendar year:  
 21
Provided that the total number of the days of leave that may be carried 
forward to a succeeding year shall not exceed thirty days in the case of an 
adult and forty days in the case of a young person:  
Provided further that an employee who has applied for leave with wages 
but has not been given such leave in accordance with any scheme laid 
down in sub-sections (10) and (11) shall be entitled to carry forward the 
unavailed leave without any limit.  
(8) An employee may at any time apply in writing to the manager of the 
establishment, not less than ten days before the date on which he wishes 
his leave to begin, to take all the leave or any portion thereof allowable to 
him during the calendar year:  
Provided that the number of times in which leave may be taken during 
any year shall not exceed three or such number as may be agreed upon 
between the employer and the employee.  
(9) If any employee wants to avail hims elf of the leave with wages due to 
him under sub-section (3), he shall be granted such leave even if the 
application for leave is not made within the time specified in sub-section (8), 
and in such a case wages as admissible under section 17 shall be paid not 
later than fifteen days from the date on which the leave begins.  
(10) For the purpose of ensuring continuity of work in an establishment, 
the employer in agreement with the r epresentatives of employees therein, 
chosen in the prescribed manner, may formulate a scheme in writing 
whereby the grant of leave allowable under this section may be regulated.  
(11) A scheme formulated under sub-section (10) shall be posted in 
convenient places in the premises of the establishment and shall be in force 
for a period for twelve months from the date on which it comes into force 
and may thereafter be renewed, with or without modification, for a further  
Shops and Commercial Establishments [1962: KAR. ACT 8 22  
period of twelve months at a time by the employer in agreement with the 
representatives of the employees as specified in sub-section (10).  
(12) An application for leave which does not contravene the provisions of 
sub-section (8) shall not be refused, unless the refusal is in accordance with 
the scheme for the time being in operation under sub-sections (10) and (11).  
(13) If the employment of an empl oyee who is entitled to leave under 
sub-section (1) 1[x x x] 1 is terminated by the employer before he has taken 
the entire leave to which he is entitled or if having applied for and having not 
been granted such leave, the employee quits his employment before he has 
 22
taken the leave, the employer shall pay him the amount payable under 
section 16 in respect of the leave not taken, and such payment shall be 
made, where the employment of the employee is terminated by the 
employer, before the expiry of the second working day after such 
termination, and where an employee quits  his employment, on or before the 
next pay day.  
1. Omitted by Act 25 of 1997 w.e.f. 12.2.1998. 
(14) The unavailed leave of an employee shall not be taken into 
consideration in computing the period of any notice required to be given 
before discharge or dismissal.  
16. Wages during leave period.—(1) For the leave allowed to him under 
section 15, an employee shall be paid at the rate equal to the daily average 
of his total full-time earnings for the days on which he worked during the 
month immediately preceding his leave,  exclusive of any overtime wages 
and bonus but inclusive of dearness allowance and the cash equivalent of 
the advantage accruing through the concessional sale to the employee of 
foodgrains and other articles.  
(2) The cash equivalent of the advantage accruing through the 
concessional sale to the employee of foodgrains and other articles shall be 
computed as often as may be prescribed on the basis of the maximum 
quantity of foodgrains and other articles admissible to a standard family.  
Explanation.—The explanations to sub-section (3) of section 8 shall be 
applicable for purposes of determining standard family under this sub-
section.  
17. Payment in advance in certain cases. —An employee who has 
been allowed leave for not less than four days in the case of an adult, and 
for not less than five days in the case of a young person, shall before his 
leave begins, be paid the wages due for the period of leave allowed.  
18. Mode of recovery of unpaid wages. —Any sum required to be paid 
by an employer under this Chapter but not paid by him shall be recoverable 
as delayed wages under the provisions of the Payment of Wages Act, 1936 
(Central Act IV of 1936).  
19. Power to make rules. —The State Government may, to carry out the 
purposes of this Chapter, make rules directing employers to keep registers 
containing such particulars as may be prescribed and requiring the registers 
to be made available for examination by Inspectors.  
20. Power to exempt establishment. —Where the State Government is 
satisfied that the leave rules applicable to employees in an establishment 
 23
provide benefits which in its opinion are not less favourable than those for 
which this Chapter makes provision, it may, by notification, exempt the 
establishment from all or any of the pr ovisions of this Chapter, subject to 
such conditions as may be specified in the notification.  
CHAPTER V  
1[WAGES AND COMPENSATION]1  
1. Substituted by Act 4 of 1969 w.e.f. 16.5.1969 by  notification. Text of notification is at 
the end of the Act.  
21. Application of the Payment of Wages Act. —(1) Notwithstanding 
anything contained in the Payment of Wages Act, 1936 (Central Act IV of 
1936) (referred to in this section as “the sa

Excerpt shown. Open the full act in Lexace.

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