Start up Companies to be exempt from Labour Laws for 5 years

Condemn the onslaught on the rights of labour in the name of "encouraging start-ups"

The Central government has given virtual exemption to "start-up" companies from implementing nine labour laws. This has been done on the justification that government must "handhold and nurture" these companies, as announced by the Prime Minister recently.

In a letter dated January 12, 2016, the labour secretary, government of India has directed all the heads of organisations like EPF, ESI etc to take immediate action accordingly, in respect of their area of enforcement.

The definition of start-up companies includes five year old registered establishments whose annual turnover is less than Rs 25 crores.

 These entities 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 that the central government is telling all these companies they are free to violate these labour laws, without fear of any action from the authorities.

This move to exempt so called start- up companies from labour laws is a back-door method of attacking the rights of labour, being pursued by the government in the interests of the biggest monopolies, Indian and foreign.

It is well known that these monopolies are aggressively demanding that the existing labour laws be amended to allow them to intensify the exploitation of workers. This demand is being made in the name of increasing the "ease of doing business". In the face of united opposition from the trade unions, cutting across party and union lines, to these openly anti working class demands, the government has carried out the attacks on the rights of labour under various guises, such as allowing companies to hire any number of workers as apprentices and trainees with virtually no rights. Now, workers in the so called start up companies will have no rights.  

Already many big corporate houses, both domestic and foreign have been showing interests in channelising their business through 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. Now, in addition to these huge concessions, they have been allowed exemptions from obligations under all basic labour laws including the social security and welfare related ones.

Different central government agencies like EPFO have already begun instructing 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 is clear that the Central Government is bent on attacking workers rights including not allowing formation of trade unions, denying welfare benefit to construction workers, contractualisation of employment, and denial of basic social security benefit like EPF, ESI to workers.

The Communist Ghadar Party of India condemns the latest attack on workers rights being carried out in the name of "encouraging start-ups". The CGPI calls upon all trade unions and workers organistions to unitedly expose and oppose this and all other anti working class measures of the government.


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