27TH January 2016

The Centre of Indian Trade Unions denounces the brazenly anti-workers design of the Govt of India to grant virtual exemption from the obligations under nine basic labour laws to start up companies including five year old registered establishments with a annual turnover of not more than Rs 25 crore 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 12th January 2016, the Labour Secretary, Govt of India directed all the heads of organizations 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, GoI, would be allowed to self-certify compliance with the 9 basic labour laws viz., Industrial Disputes Act 1947, Trade Unions Act 1926, Building &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 channelizing 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 Govt 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 Govt 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 Govt of India, incentivizing, 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-workers design sought to pushed through in a dubious and deceptive manner warrants all out condemnation and opposition by the trade union movement irrespective of affiliations. CITU calls upon the working people and the trade union movement to expose such anti-worker deceptive design of the NDA Govt unitedly.

(Tapan Sen )
General Secretary

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