January 31, 2016
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CITU Denounces Govt Decision to Exempt Start-Up Companies from Labour Laws

THE Centre of Indian Trade Unions in a statement issued on January 27 has denounced the brazen anti-worker designs of the government of India to grant virtual exemption to the start-up companies, including five year old registered establishments with an annual turnover of not more than Rs 25 crore, from the obligations under nine basic labour laws. It has done this on the plea of “handholding and nurturing” the so-called start-up companies, announced by the prime minister only recently. In a letter no Z-13025/39/2015-LR-Cell dated January 12, 2016, the labour secretary, government of India directed all the heads of organisations like EPF, ESI etc to take immediate action accordingly, in respect of their area of enforcement. The start-up entities are defined as those incorporated or registered not prior to five years with annual turnover, not exceeding Rs 25 crore. These entities, as per the notification made by the labour secretary, government of India, would be allowed to self-certify compliance with the nine basic labour laws viz, Industrial Disputes Act 1947, Trade Unions Act 1926, Building and Other Construction Workers Act 1996, Industrial Employment (Standing Order) Act 1946, Inter-State Migrant Workmen Act 1979, Payment of Gratuity Act 1972, Contract Labour (Regulation & Abolition) Act 1970, the EPF Act 1952 and ESI Act 1948. This means there will be no inspection by the enforcement machinery in all these establishments at least for three years allowing the concerned employers to violate freely these basic labour laws. Already many big corporate houses, both domestic and foreign have been showing interests in channelising their business through these so-called start-up companies to take advantage of the three years tax holidays and exemption from inspection by tax-officials for the start-ups by the government of India. To add to these huge concessions, they have been allowed exemptions from obligations under all basic labour laws including the social security and welfare related ones, imposing conditions of virtual bonded labour on the workers employed or going to be employed in these start-up entities. Different central government agencies like EPFO and others already jumped in haste to instruct their regional offices not to inspect these so-called start-up entities including five-year old registered companies in respect of compliance of EPF Act etc. It has become clear that for the government of India, incentivising, hand-holding or promoting investments means suppression of workers’ rights, not to allow formation of trade unions, denying welfare benefit to construction workers, reckless contractorisation and denial of basic social security benefit like EPF, ESI etc. Such brazen anti-worker designs sought to be pushed through, in a dubious and deceptive manner, warrants all-out condemnation and opposition by the trade union movement irrespective of affiliations. The CITU calls upon the working people and the trade union movement to expose such anti-worker deceptive designs of the NDA government unitedly.