Ecommerce firms will be covered under Shops Act in Rajasthan

Central as well as several state governments of India are weaving tighter rules & regulations web to get control over ecommerce businesses and bring a sense of order. The tax tango between Amazon and Karnataka government is known to all. It’s now Rajasthan administration that’s in the news.

The proposed idea

There is lot of ambiguity about ecommerce’s identity, which is why the sector has so far managed to escape common acts & laws that governs other industries. Rajasthan government has proposed to bring all ecommerce firms under labour law so as to protect the rights of its employees.

As per this Business Standard report, the proposal states ‘any premises where any trade or business or ecommerce is carried on, which is not covered under a shop or a commercial establishment will come under the proposed RSCE (Rajasthan Shops and Commercial Establishments) Act.’

What’s the purpose?

Ecommerce companies have so far managed to present themselves as mere facilitators or medium between online sellers and buyers with no physical establishment. And archaic laws have enabled them to do so and make their own rules.

But that’s far from being true as all big etailers be it Amazon, Snapdeal or Flipkart have distribution centres and multiples offices that recruits skilled & unskilled labour. In fact, online industry is on a hiring spree.

As rightly stated by Rituparna Chakraborty, President, Indian Staffing Federation, “The category of e-commerce was not identified while the labour laws were written, as a result companies could align themselves to a definition that suited their requirement.” The recent strike by Flipkart’s delivery staff over lack of basic amenities has brought the issue further on surface.

This is why the proposed amendment suggested by Rajasthan government to bring ecommerce under labour laws one way or the other is a great move. Bringing more clarity over this, Manish Sabharwal, Chairman of Teamlease, leading recruitment consultant firm said to BS, “Bringing ecommerce under labour laws is important for the safety and basic working conditions of the workers. Any ecommerce company will either have to be covered under the Factories Act (a central legislation) or the Shops and Commercial Establishment Act of the state. It clarifies the regulatory framework for the companies and makes it more flexible, local and finite.”

Over the past few months, several steps have been taken to streamline the growing ecommerce industry of India. Whether it is bringing ecommerce under the scanner of various regulatory bodies, submitting vendor sales data to state governments, FDI in ecommerce, curbing anti-competitive online practices, or filing tax returns, the commerce ministry is ensuring that no one is above the law.