Smaller-unit workers may lose benefits under amended Act

A new amendment proposed by the Delhi government to the Delhi Shops and Establishments Act, 1954, is likely to reshape workplace protections for lakhs of workers employed across smaller establishments.

The Delhi government’s proposed Delhi Shops and Establishments (Amendment) Bill, 2026 seeks to exclude shops and establishments with fewer than 20 employees from the purview of the Act, according to a copy of the Bill accessed by The Hindu.

Currently, the Act applies to all shops and establishments in the city, offering safeguards to employees such as mandatory leave, weekly holidays, fixed working hours, and a month’s notice before dismissal. By introducing a threshold of “20 or more employees”, the amendment would remove lakhs of workers from these protections, labour unions and experts said.

The Bill is scheduled to be tabled by Law Minister Kapil Mishra during the ongoing Assembly session on Thursday. It was circulated to MLAs on Tuesday and listed for introduction on Wednesday, but the House adjourned before it could be taken up.

‘Extremely one-sided’

Professor Surajit Mazumdar of the Centre for Economic Studies and Planning, Jawaharlal Nehru University, warned that the change would hit a vast number of workers employed in smaller establishments. “These amendments are extraordinarily one-sided in character, favouring the already stronger party, the employer. They allow employers to increase the working hours of employees, enabling them to reduce wage costs,” he said.

The government, however, has said that the reforms aim to promote employment generation, spur economic activity, and encourage gender inclusion while maintaining worker protections. The Bill also proposes changes to working hours. The current daily cap of nine hours is set to increase to 10, as per the Bill.