Medical establishments to be covered under 2017 Act: Bombay High Court

Under the act establishments of medical practitioners including clinics, hospitals and dispensaries, with 10 or more employees are to be registered with the state government and those with lesser staff to be intimated to the local facilitator.

The Nagpur bench of the Bombay High Court on Friday upheld the constitutional validity of the provisions of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 under which establishments of medical practitioners including clinics, hospitals and dispensaries, with 10 or more employees are to be registered with the state government and those with lesser staff to be intimated to the local facilitator.

A division bench of Justice R K Deshpande and Justice Vinay Joshi was hearing a petition filed by Pradeep Arora (61), a general and paediatric surgeon, who runs Arora Hospital in Nagpur. Arora had challenged the definition of “establishment” under Section 2(4) of the Act. He argued that the inclusion of the profession and the establishment of any medical practitioner in the definition of “establishment” under the Act are liable to be struck down as the constitutional right to practice the profession or occupation of a doctor and the state government had not held any pre-legislative consultation before enforcing the Act.

The provisions of the Act require establishments, including medical facilities, with 10 or more employees to comply with the employment conditions mandated under the Act and those with lesser employees to be registered with the facilitator bringing the employer under statutory obligation to comply with it.

“..the Legislature seems to have adopted a practical approach based upon the data available with it indicating that the concept of medical tourism has also increased the commercial aspect of medical establishments. There are large multi­speciality hospitals, chains of hospitals spreading across inter­district, inter­state resulting in huge employment and engagement of huge work­force in the sector. It, therefore, became necessary to safeguard the interest of the employees and regulate their employment, conditions of service and provide them social security from being exploited under the garb of urgent work,” the bench observed in its 37-page order.

An establishment registered under the 2017 Act, requires the employer to fill online forms, declarations, documents stating the number of employees and their work hours, among others; prohibits discrimination between men and women employees; daily and weekly hours of work and interval for rest and protection of women from sexual harassment among others.

Advocate General A A Kumbhakoni told the court that to come under the definition of “establishment” under the Act, there should be a systematic activity, organised by cooperation between employer and employee and for the production and/or distribution of goods and services calculated to satisfy human wants and wishes.

“In our view, it is the harmonious activity carried out in cooperation amongst all the partners in the establishment to render material services to the community with the help of capital, which is covered by the definition of “establishment” under Section 2(4) of the new (2017) Act. Whether the establishment is running in profit or loss is of no consequence” the court observed. It said that Kumbhakoni was right in urging that it is a matter of legislative policy and wisdom as to the types of establishments to be included in the definition,” the bench observed.

Dismissing Arora’s petition, the court noted, “The objects and reasons of the new Act… not only take into consideration the regulation of conditions of employment, but also provide social security benefits to the employees covered by it. It deals with the statutory liabilities of employer of medical establishment. The new Act is modelled on the legislation suggested by the central government to bring about uniformity and equity in the provisions of law enforcement, to improve public accountability, transparency and to facilitate the ease of doing business and create new jobs”.