The Usdaw trade union has been campaigning for a change in the law to prevent large retail businesses from opening on January 1 to give shop workers a day off over the busy festive period.
But Finance Minister Tom Arthur announced that the Government will not introduce legislation, blaming the “prevailing economic conditions” and arguing that it would not guarantee time off.
Mr Arthur said: “While I am sympathetic to the campaign to legislate, the limits of the Christmas and New Year’s Day Trading Act are clear and – having carefully considered responses to the consultation, the prevailing economic conditions and the options available to us under this legislation – it is with regret that I confirm we will not making an order.
“This legislation would only restrict trading in stores over a certain size and it will not give all retail workers a day off.
“The legislation would not even cover all workers in large retail.
“Simply closing stores will not prohibit restocking, deliveries or online shopping, so employees may still be required to work.
“Crucially, it also does not guarantee that those who do get the day off will be paid for it.”
Scottish Labour’s economy spokesman, Daniel Johnson, said union members and shop workers will feel “let down and betrayed” by the decision.
However, Scottish Conservative MSP Liz Smith welcomed the decision and suggested that legislating to close large shops would be a “retrograde step”.