The Central Ministry for Labour and Employment issued an Advisory in early 2016 on the subject of giving specific concessions to newly established companies, called “start-ups”, with respect to laws dealing with the labour rights. Since then, 10 States have agreed to take steps as per the Advisory. Government of Maharashtra is one of the states taking active steps to exempt start-ups from inspections relating to key labour laws, for a period of three years.
The laws which start-ups are being permitted to violate include the Contract Labour (Regulation and Abolition) Act, 1970; the Building and Other Construction Worker' (Regulation of Employment and Conditions of Service) Act, 1996; the Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; the Payment of Gratuity Act, 1972; the Employees Provident Fund & Miscelleneous Provisions Act, 1952; and the Employees State Insurance Act,1948.
In the first year, the start-ups will be exempted from inspections relating to these labour laws. In the second and third years, such start-ups are required to furnish self-certified returns. They would be inspected only when “credible and verifiable complaint of violations is filed in writing”.
A government resolution announcing the changed norms is expected to be issued shortly. Maharashtra government is doing this as part of its attempts to improve the “ease of doing business”. The specific justification being given for depriving workers of legal protection of their rights is that it would save start-ups from “initial headache”!
The new norms will apply to start-ups with an annual turnover of less than Rs 25 crore that have registered less than five years ago. As per official estimates, more than 98,000 start-ups will be able to avail of this “concession” in Maharashtra. Assuming 10 workmen employed per enterprise on average, 9,80,000 workers will have their rights trampled in the mud.
Prior to this, Government of Maharashtra had already watered down the scope of several labour laws as part of its Make in Maharashtra campaign. Last year, it allowed self-certification for 16 labour laws, including the Minimum Wages Act, the Child Labour Act and Maternity Benefits Act. It also changed the definition of factory to reduce the number of units subject to the Factories Act.
The recent concession to Start-ups is a further attack on the rights of lakhs of workers and deserves to be condemned and opposed. The struggle of the working class in Maharashtra against the continuing attacks on their rights deserves the support of all parties and organisations of the working class and all democratic forces.