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Regarding 6 Laws: PMO directs LabourMin to ensure self-certification system for start-ups

The MoLE in its advisory in January 2016 suggested states not to inspect start-ups during first 3 years of their existence under six specific labour laws.

Written by Deepak Patel | New Delhi |
August 15, 2017 12:01:30 am
PMO, LabourMin, labour ministry, self-certification system, start ups, start ups self-certification system, six labour laws, indian express news, business news The MoLE, in its advisory dated January 12, 2016, suggested the states to not inspect the start-ups, during first three years of their existence, under these six labour laws. (Representational image)

The Prime Minister’s Office (PMO) has directed the Ministry of Labour and Employment (MoLE) to ensure that all states have established a system under which start-ups are allowed self-certification with regard to six labour laws, for a period of five years.

The six labour laws under which self certification is advised are: The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; The Contract Labour (Regulation and Abolition) Act, 1970; The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; The Employees’ State Insurance Act, 1948; The Payment of Gratuity Act, 1972.

The MoLE, in its advisory dated January 12, 2016, suggested the states to not inspect the start-ups, during first three years of their existence, under these six labour laws. Instead, the states were advised to ask the start-ups to submit an online self-declaration annually for three years. Later on, the MoLE said that this period should be extended from three years to five years. Currently, approximately 12 states, including Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan and Uttarakhand have implemented this advisory.

On May 17, 2017, Ramesh Abhishek, secretary, Department of Industrial Policy and Promotion (DIPP), wrote a letter to P K Sinha, Cabinet Secretary, wherein he stated:

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“The MoLE has been directed by the principal secretary to PM to ensure that all states ensure compliance (of this advisory) at the earliest.” The DIPP secretary wrote this letter to give details about the implementation of Startup India programme, which was launched by the Prime Minister on January 16, 2016.

The MoLE has told the states that while the start-ups should be allowed to submit self-certified returns under the aforementioned laws, such startups should be “taken up for inspection only when very credible and verifiable complaint of violation is filed in writing and the approval has been obtained from at least one level senior to the inspecting officer”. The MoLE ‘Shram Suvidha’ portal has been integrated with Startup India portal for self-certification under the aforementioned laws.

Some states have opposed self-certification for start-ups under certain labour laws. For example, On May 3, 2017, P Amudha, secretary, labour and employment department, Tamil Nadu government, told the MoLE: “Under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, the safety of workers has to be ensured within the construction period which may be less than five years. Therefore, self-certification for five years will not serve the purpose of the Act, which is enacted to provide safety and protection to construction workers. So, the existing provision under the Act may be allowed to be continued.”

The seventh meeting of the committee, which monitors the Startup India programme, took place on June 20, 2017. The minutes of the meeting stated that the MoLE would update the committee on follow-up with the states regarding the implementation of the advisory and integration with Shram Suvidha portal. However, the MoLE told the committee that no self-declaration has so far been received from start-ups on Shram Suvidha portal. Therefore, according to the minutes, the MoLE would have a meeting with the Department of Industrial Policy and Promotion on possible ways to create awareness among start-ups to avail self-certification facility on the Shram Suvidha portal.

According to the agenda of this seventh meeting, the MoLE has been requested by the committee to “share innovative ideas to further simplify compliances for startups”. However, according to an senior government official, who participated in this meeting, no such “innovative idea” was pitched by the MoLE during the meeting. The minutes of this meeting also do not talk about any such “innovative ideas”.

As per the agenda of this meeting, the MoLE is also going to publish state wise list of startups, which have self-certified themselves under the six labour laws, on their website.

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