Maternity Benefits In India: A Look At The Well-Intended But Misguided Law

Provisions on Maternity Benefits in the Act and the Code

"An act to regulate the employment of women in certain establishments for a certain period before and after childbirth and to provide for maternity benefit and certain other benefits".

Applicability

As per S.2 of the Maternity Benefit Act, 1961, the Act applies to

1. every factory, mine or plantation including factories, mines and plantations belonging to the government
2. establishments where persons are employed for the exhibition of equestrian, acrobatic and other performances and
3. every shop and establishment employing ten or employees on any day of preceding twelve months
4. such other shops or establishments notified by the appropriate government.

Note – State government can declare that the Act may apply to any other establishment or class of establishments (industrial/commercial/otherwise). This declaration shall be notified via the official gazette, after taking approval of the central government by giving a two months' notice. And the Act clarifies that nothing therein (except sections 5A and 5B) shall apply to establishments where provisions of the Employees State Insurance Act, 1984 apply.

As per Schedule 1 of the Code, the maternity benefits laid therein only apply to points (a), (c) and (d) mentioned above and not to establishments where persons are employed for exhibition of equestrian, acrobatic and other performances. The Code also does not make any provision for the state government to declare maternity benefits to apply to any such establishment that it deems fit.

Important Definitions

Maternity Benefit Act, 1961	Code on Social Security, 2020
S.3(b) "Child" includes a 'still-born' child	S.2(12)
S.3(ba)"commissioning mother" means a biological mother who uses her egg to create an embryo implanted in any other woman	S.2(13)
S. 3(ha)"medical termination of pregnancy" means the termination of pregnancy permissible under provisions of Medical Termination of Pregnancy Act, 1971	S.2(45)
S.3(j) "Miscarriage" means expulsion of contents of a pregnant uterus at any period before or during the twenty-sixth week of pregnancy but does not include any miscarriage punishable under the Indian Penal Code	S.2(48)
S. 3(o) "woman" means a woman employed directly or through an agency, for wages in any establishment	S.2(91) Substitutes the word "agency" with "Contractor" Also includes an insured woman as a woman for whom contribution is or was payable under Chapter IV pertaining to maternity benefits and who is entitled to all such benefits and includes a commissioning mother and a woman who legally adopts a child of up to three months of age.

Who can avail maternity benefits?

As per Section 5(2) of the Maternity Benefit Act, 1961 and S.60(2) of the Code on Social Security 2020, every woman who has worked in an establishment for at least 80 days (including the days for which she was laid-off or public holidays) in the twelve months immediately preceding the date of her expected delivery.

So, while the Maternity Benefits Act, 1961 (inclusive of 2017 amendment) excludes unorganized workers from its purview (leaving out 95% of India's female workforce) the Code includes them and states under Chapter IX that the Central Government shall frame and notify laws and welfare schemes pertaining to unorganized workers on matters relating to life and disability cover, health and maternity benefits, old age protection, education and other benefits as the government may deem fit. But to avail such benefits under the Code, Workers in the unorganized sector must register on an online portal if they have completed sixteen years of age. And they shall also submit a self-declaration electronically or otherwise containing such information as prescribed by the central government and shall attach aadhaar documents with it so that they can be assigned a distinguishable number. The Code also makes provisions for providing maternity benefits to gig and platform workers under S.114 upon their registration in the same manner on the portal available above. Other benefits that can be availed by gig and platform workers have been discussed here.

But since the provisions of the Code on Social Security, 2020 have not yet come into force, the current maternity laws in India exclude 95% of the female workforce as they do not apply to the unorganized sector.

Provisions for maternity leave availability

Provision	Leave	Act, 1961	Code, 2020
No employer to knowingly employ a woman.	For 6 weeks, immediately after a delivery/miscarriage/medical termination of pregnancy	S.4(1)& S.10	S.59(1) & S.65(1)
No woman to work in an establishment.	For 6 weeks, immediately after a delivery/miscarriage/medical termination of pregnancy	S.4(2)	S.59(2)
And no employer to give work of arduous nature or strenuous activity involving long hours of standing (even if a woman asks so)	for one month following the six weeks mentioned above and any period during the six weeks for which the woman does not avail leave of absence	S.4(3); S.4(4)	S.59(3); S.59(4)
The maximum period for which any woman shall be entitled to maternity benefit	Twenty-six weeks (maximum 8 weeks before delivery and 18 weeks after)	S.5(3)	S.60(3)
The maximum period for which women having two or more children for availing maternity leave benefit	Twelve weeks (maximum six weeks before and then six weeks after)	S.5(3)	S.60(3)
If a woman dies during this period	Maternity benefit only payable for the days leading up to her death, till the day she died.	Proviso to S.5(3)	Proviso to S.60(3)
If the woman dies post-delivery *In both cases where women die without availing benefit, such benefit shall be paid to the person nominated by the woman under S.6 (Notice of claim for maternity benefit and payment thereof)	But child survives – employer liable to pay maternity benefit that entire period But if the child also dies, then the employer is liable only till the day of both their deaths.	Proviso to S.5(3)	Proviso to S.60(3)
A woman who legally adopts a child below the age of three years	Entitled to maternity leave for twelve weeks, starting from the date the child is handed over to the adopting/commissioning mother	S.5(4)	S.60(4)
In case a woman has undergone a tubectomy operation, she will be entitled to	Maternity benefit for two weeks immediately following the day of her tubectomy operation	S.9A	S.65(2)
In case a woman suffers from an illness arising from pregnancy, delivery, premature birth of a child, miscarriage, medical termination of pregnancy or tubectomy, she shall be entitled to	In addition to leave under S.6 and S.9, to leave with wages at the rate of maternity benefit for a maximum period of one month.	S.10	S.65(3)

As per S.5(5) of the Maternity Benefit Act, 1961 and S.60(5) of Code on Social Security, 2020, if the nature of the work is such that can be completed from home, then the employer may allow women employees to avail this benefit after her maternity leave is completed, as per mutual conditions agreed on by both the employer and women employee in question.

Note – Under S.6 of the Maternity Benefits Act, 1961 and S.62 of the Code, a woman entitled to Maternity Benefits under the Act and the Code may give notice to the employer detailing the duration, leaves etc. within 6 weeks from the date of her expected delivery or immediately after the delivery although the lack of such notice shall not disentitle any woman from claiming maternity benefits.

Payments during maternity leave

As per S.5(1) of the Maternity Benefit Act, 1961 and S. 60(1) of Code on Social Security, 2020, every woman is entitled to and her employer is liable for payment of maternity benefit at the rate of the average daily wage for the period of her actual absence. Furthermore, as per S.5A of Maternity Benefit Act, 1961 and S.61 of Code on Social Security, 2020, if Employees State Insurance Act, 1948 applies to an establishment, the women employees shall still be entitled to maternity benefits until they become qualified to claim maternity benefit under S.50 of that Act. Average daily wage means the average of the woman's wages payable for the days on which she has worked three calendar months immediately preceding the date from which absents herself on account of maternity leave. And the average daily wage is subject to the minimum rate of wage fixed or revised under the Minimum Wages Act, 1948 (As per the provisions of the Maternity Benefit Act, 1961) or the Code on Wages, 2020.

Additional benefits under the Act

• As per S.11 of Maternity Benefit Act, 1961 and S.66 of Code on Social Security, 2020, every woman who returns to duty after delivering a child, in addition to the interval of rest allowed to her, shall be allowed two nursing breaks (duration to be stated by Central government) for nursing the child until the child attains the age of fifteen years.
• As per S.11A of Maternity Benefit Act, 1961 and S. 67 of Code on Social Security, 2020, every establishment having fifty or more employees shall have a crèche facility and women employees shall be allowed four visits a day to the crèche facility (including the interval of rest allowed to her)

Note – Both the Act and the Code as per S.11(2) and S.67(2) respectively, cast a duty on every employer to inform the women employees at the time of their joining about the benefits available to them under regarding Maternity Benefits, in addition to putting in the local language, an abstract of provisions relating to maternity benefits, in a conspicuous place in every part of the establishment where women are employed, as per S.19 of the Act and S.71 o the Code.

• The employer cannot dismiss any woman from work on account of her absence during her maternity leave, as per S.12 of the Act and S.68 of the Code (Except when the dismissal is for gross misconduct as prescribed by the Central government, then the employer may deprive her of maternity benefit, bonus or both.) If a woman has been dismissed during her maternity leave or deprived of maternity benefit, she may, within sixty days from the date of an order to that effect, appeal to a competent authority and the order of the competent authority shall be final as per S.12(2b) of the Act and S.68(2) of the Code.
• A woman's normal and usual daily wages cannot be deducted on account of strenuous work assigned to her as per S.4(3) of the Act and S.59 of the Code or on account of nursing breaks under S.11 of the Act and S.69 of the Code.

Although if a woman continues to work in an establishment for remuneration after an employer has allowed her to absent herself in lieu of maternity leave under S.6 of the Act and S.62 of the Code, she shall forfeit her claim to the maternity benefit for such period as per S.18 of the Act and S.70 of the Code.

Penalties and powers

Under Maternity Benefit Act, 1961: If an employer contravenes any provisions of the Maternity Benefit Act,1961 the employer shall be punishable with imprisonment of three months extendable to one year and a fine of INR 2000 to INR 5000. Cognizance of offences under the Act to be taken by Metropolitan Magistrate or a Magistrate of first-class as per S.23 of the Act. The Act under S.24, also provides for an indemnity clause for anything done in good faith in the Act.

Under the Code on Social Security, 2020: As per S.133 in Chapter XII, if any employer fails to provide maternity benefit to any woman who is entitled to it under the Code, he shall be punishable with imprisonment for a term extending to six months and/or fine extendable to INR 50000. For a subsequent offence, punishment will be imprisonment of a minimum of two years extendable to three years and a fine extendable to INR 300000, as per S.134 of the Code.

Analysis of the provisions

While the 2017 amendment to the Maternity Benefits Act, 1961 made some necessary, significant changes to the Act like

• extending the definition of "establishment" to include establishments under applicable legislations, factories, governmental establishments, mines, plantations and shops;
• extending leave from 12 weeks to 26 weeks as per WHO recommendations;
• recognizing the right of maternity benefit of adoptive mothers and giving them a 12 weeks maternity leave for an adopted child under the age of three years;
• extending maternity leave to women who have undergone tubectomy for 2 weeks;
• extending the maternity leave provisions for women who have suffered miscarriage providing them up to 6 weeks of such leave;
• extending the option of working from home post the maternity leave;
• crèche visits;
• nursing breaks;
• and casting a duty on the employer to inform women regarding the various maternity benefits they are entitled to,

it forgot to include certain sections of women in provisions, like women from the unorganized sector, ranging from agricultural labourers, ASHA workers, caregivers, domestic workers and street vendors. Furthermore, the Act is not applicable to women working in establishments having less than 10 employees. Even though the Law Commission in 2015 recommended that the provisions of the Maternity Benefits Act, 1961 should be made applicable to all women workers including those who work in unstructured work conditions, the 2017 amendment failed to provide any clarity on that.

Although the Code makes provisions for applicability of maternity benefits in the unorganized sector, lack of any duration, schematic provisions, timelines etc. make it seem an extremely dubious prospect. And additionally, the Code leaves out numerous categories of workers ranging from agricultural labourers, scheme workers and contributory workers. Additionally, even the definition of "unorganized sector" is ambivalent since it's based around an enterprise, but the definition of an enterprise is missing from the Code. Add to it the requirement of making the unorganized workers register on a platform (India may be on the path of becoming a digital economy, it is still far from it), it's an exclusionary recipe seemingly intended to make availing such benefits more difficult, rather than simplifying them and improving their accessibility.

Furthermore, why have the Act and the Code denied maternity benefits to mothers adopting children above the age of three months is yet to come to light. A PIL regarding the same has been pending in the apex court. The Allahabad HC has also recently held that there is no ground to deny maternity benefits to women students and this denial is violative of the fundamental rights of women, paving the way for women students and not just working mothers to be included in the Code.

Lack of clarity regarding the duration and frequency of nursing breaks and the duration of the period for which crèche facility benefit is allowed has made the provisions even more abstruse.

Although India has the world's third-highest maternity leave duration, falling only behind Norway and Canada, its female labour force participation is nowhere close. As it has been pointed out time and again, the most problematic part of the ostensibly upgraded maternity benefits scheme is the enhanced financial burden for this extended maternity leave (from 12 weeks to 26 weeks) falling solely on the employer. This is likely to discourage employers from hiring women employees, making the very objective of the Act, to increase women's participation in the labour force, redundant. In most countries, the burden of providing maternity benefits is shared by the government, employer and insurance agencies. Although large companies might be able to afford this extended financial cost, MSMEs, startups and smaller companies will eventually resort to hiring lesser women employees in lieu of increased costs, as pointed out by this survey conducted in May 2018 on 350 MSMEs and startups. Although the Code in S.109 says that the schemes notified by the Central Government shall either be fully funded by Central Government or partly by central and state governments and includes the beneficiaries of the scheme and corporate social responsibility funds to contribute to central government schemes, there is no mechanism mentioned in the Code regarding the same, leaving it open-ended.

Even the provisions regarding the crèche facility although indispensable will substantially expand operating costs which the smaller companies, MSMEs and family-run businesses and startups will be less than willing to pay. These well-intended provisions have perverse consequences which have worked and will keep working to the deterrent of women if not rectified at the earliest.

Recommendations

Instead of imposing the entire financial burden of enhanced maternity benefits on the employers, the government could take suit after countries like Singapore, Australia, Canada, France and Brazil where the costs are either divided between employer, the government and public funds or entirely from public funds and social security schemes. There has to be some mechanism that needs to be developed to reduce the burden on the employer which works as an incentive for them to hire more female employees. Economic tax incentives should be given to employers in lieu of giving maternity benefits, at least initially, to not make employers squarely responsible for social changes. Even an employee payroll tax could be looked into so that employers do not have to shoulder the burden of paying wages during maternity leave as well getting the work done on their behalf from other employees. The government could also look into research indicative of the fact that having other family-friendly policies like paternity leave leads to increased female labour force participation. In the 21^st century, it's essential to make paid leave gender neutral which will definitely have an impact on reducing gender disparity in the labour force. Splitting the existing 26-week maternity leave for about 13 weeks each for both father and mother will go a long way in ensuring that both parents can contribute to child-rearing and females won't lose out to male counterparts because of their long absence for household and maternity duties. There are already pre-existing barriers to women's entry into the workforce and thus, the need of the hour is to have the foresight to improve the current laws or at least invite and take recommendations from involved stakeholders so that the intended benefits of these Acts can reach every stratum of society, leaving none behind.