In order to promote the Start-Up ecosystem in the country and incentivizing the entrepreneurs in setting up new start-up ventures and thus catalyze the creation of employment opportunities through them, the Ministry of Labour & Employment had issued an advisory to the States/UTs/Central Labour Enforcement Agencies on 25th April, 2016, for a compliance regime based on self-certification and regulating the inspections under various Labour Laws.
- The Ministry has advised that if the start-ups furnish self-declaration for compliance of 9 labour laws for the 1st year from the date of starting the start-up, no inspection under these labour laws, wherever applicable, will take place.
- The nine labour laws, included in this advisory are:
- the Industrial Disputes Act, 1947;
- the Trade Unions Act, 1926;
- the Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996;
- the Industrial Employment (Standing Orders) Act, 1946;
- the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;
- the Payment of Gratuity Act, 1972;
- the Contract Labour (Regulation and Abolition) Act, 1970;
- the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; and
- the Employees’ State Insurance Act, 1948.
- From the 2nd year onwards, up to 3 year from the setting up of the units, such start-ups are required to furnish self-certified returns.
- Such start-ups would be inspected only when credible and verifiable complaint of violation is filed in writing and approval has been obtained from the higher authorities.
- The advisory to State Governments is not to exempt the Start-ups from the ambit of compliance of these Labour Laws, but to provide an administrative mechanism to regulate inspection of the Start-Ups, so that Start-ups are encouraged to be self-disciplined and adhere to the rule of law.
- These measures intend to avoid harassment of the entrepreneurs by restricting the discretion and arbitrariness.
- Punitive action shall, however, be taken whenever there is a violation of these labour laws.